Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (8) TMI 235 - AT - Income TaxDeduction u/s 36(1)(viii) - banking company - CIT, invoking his jurisdiction u/s 263, denied deduction on ground that assessee did not satisfy this initial condition of being a financial corporation - validity of revisionary proceedings - Held that:- In case of Union Bank of India vs ACIT (2012 (6) TMI 500 - ITAT MUMBAI ) it has been held that “government company” are financial corporation within the meaning of proviso to section 36(1)(viii) and thus entitled the bank to deduction u/s 36(1)(viii) even in the years up to 2006-2007. Hence, when one of the possible views has been taken by the Assessing Officer, the CIT cannot exercise his jurisdiction u/s 263 on that aspect of the matter. However, revisionary order is upheld in respect of erroneous deduction provided by AO in case for provision for bad and doubtful debts. Matter is restored back to file of AO for the purpose of computation of deduction u/s 36(1)(viii) - Appeal partly allowed. since more than 51% shares of the assessee-bank were held by the Central Government, it was a “government company” as defined u/s 617 of the Companies Act and as such it became financial corporation within the meaning of proviso to section 36(1)(viii). On the contrary, the ratio in the case before the Cochin Bench of the Tribunal is not attracted because there the assessee was a foreign bank, namely, Federal Bank Limited, which obviously is not a Government company as per the Companies Act, 1956.
|