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2014 (10) TMI 993 - AT - Income TaxDeduction u/s 36(1) (vii) - provision for bad and doubtful debts created by the assessee in relation to the advances of the rural branches - held that:- The provisions of clause (vii) deal with ‘bad debts’, whereas, provisions of clause (viia) deals with ‘provision for bad and doubtful debts’. The distinction which the assessee has tried to create by dividing the provisions of clause (viia) into two parts is merely self-drawn. Both the parts of clause (viia) are joined with conjunction “and”. Therefore, both the limbs of clause (viia) have to be read together and not as alternate. The Hon’ble Supreme Court of India in the case of Catholic Syrian Bank Ltd. vs. CIT ( [2012 (2) TMI 262 - SUPREME COURT OF INDIA] has categorically held that the provisions of section 36(1)(vii) deals with general deduction available to a bank and even non-banking business. The provisions of section 36(1)(vii) operate in their own field and are not restricted by the limitation of section 36(1)(viia) of the Act. Depreciation on valuation of investment portfolio by treating the investments held by the bank as stock-in-trade - Held that:- AO in the order giving effect to the order of the CIT(A) has factually found that the bad debts claimed as deduction u/s.36(1)(vii) of the Act has actually been written off in the books of accounts of the Assessee. There is, therefore, no basis for the revenue to raise the aforesaid additional grounds before the Tribunal. The additional ground sought to be raised is therefore not admitted for adjudication. In this regard, we are also of the view that decision rendered by the Tribunal in assessee’s own case for the A.Y. 2010-11 on an identical additional ground, will also be applicable in the present case. The additional ground sought to be raised are therefore dismissed as not admitted for adjudication. Addition u/s 14A - Held that:- Perusal of the financial statements of the Assessee for the relevant financial year shows that Investments of the assessee in tax free securities as on 31.3.2007 was ₹ 592.48 Crores and the same as on 31.3.2008 was ₹ 850.23 crores. Own interest free funds available with the Assessee 31.3.2007 was ₹ 10,542.77 Crores and the same as on 31.3.2008 was ₹ 14,734.64 Crores. Therefore, available of interest free funds for making the investments which yielded tax free income cannot be disputed by the revenue. It is clear from the statement of available own funds and balance sheet that the assessee had enough funds out of which investments yielding tax free income were made. Therefore, no disallowance of interest expenses can be made applying Rule 8D(2)(i) or (ii) of the Rules. In the present assessment year, assessee has not made any disallowance on his own u/s. 14A of the Act. Under the circumstances, it would be just and proper to sustain disallowance of 5% of the tax free income. We hold and direct accordingly. Not giving credit being additional income tax paid u/s 115(O) on the dividend received from a 100% subsidiary of the appellant - Held that:- It is the claim of assessee that it had received a sum of ₹ 84,97,160 from its 100% subsidiary and that the subsidiary has paid tax u/s. 115-O on such dividend distributed. The assessee has therefore prayed that assessee should be given credit for the aforesaid sum, which was, by mistake, paid by the assessee. The ground being a legal ground which can be decided on the basis of facts available on record, we deem it appropriate to consider the claim of the Assessee notwithstanding the fact that the said ground was withdrawn before CIT(A). In tax matters there cannot be any estoppel. Tax determination and collection has to be in accordance with law and not based on any concession of legal rights by an Assessee. We are of the view that it would be just and proper to direct the AO to examine the claim of assessee and if found correct, to allow the same. Refund arising u/s 115WE(3) being the excess payment of fringe benefit tax - Held that:- It would be just and appropriate to direct the AO to consider the claim of assessee for credit of a sum of ₹ 1,20,08,840 being the refund arising u/s. 115WE(3) of the Act, which his claimed by the assessee as excess payment of fringe benefit tax. If the claim of the assessee is found to be correct, then assessee should be given appropriate credit in accordance with law. We hold and direct accordingly.
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