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2015 (10) TMI 1611 - AT - Income TaxAddition on account of provision for standard asset - whether Standard Assets is diminution in value of stock-in-trade, were CBDT instruction states that provision created by Banks on different accounts cannot constitute deductible expenditure for the purpose of Income-tax, hence provision for standard asset is not allowable for deduction under I.T. Act? - CIT(A) deleted the addition - Held that:- The issue before us is squarely covered in favour of the assessee and against the Revenue by the decision of the Hon’bleSupreme Court in the case of Nainital (1964 (9) TMI 11 - SUPREME Court ), which has been followed by the Ld. CIT(A). Therefore, no interference is called for. The provision for standard asset is the diminution in the value of stock-in-trade and the same is allowable u/s. 28(1) of the Act. - Decided against revenue. Addition on account of loss incurred by bank due to fraud - CIT(A) deleted the addition - Held that:- The undisputed fact is that there was an embezzlement/fraud by the employees of the bank to the tune of ₹ 35 crores. It is also an undisputed fact that RBI asked the assessee to write off the loss in phased manner. It is also an undisputed fact that losses written off in F.Y. 2007-08 & 2008-09 have been accepted by the Assessing Officer. This is the last year of the write off wherein the dispute has arisen breaching the rule of consistency. Undoubtedly, the loss on account of fraud should be written off in the year of detection of fraud. Considering the peculiarity of the present case, in the light of the guidelines of the RBI, we agree with the findings of the Ld. CIT(A) and decline to interfere.- Decided against revenue.
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