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2019 (3) TMI 1744 - AT - Income TaxClaim u/s. 36(1)(vii) on account of write off of debts by non rural branches of assessee Bank disallowed - HELD THAT:- Since, the issue in present appeal is identical to the one already considered by the Co-ordinate Bench in assessee‟s own case [2014 (10) TMI 210 - ITAT PUNE] and there has been no change in the facts, we deem it appropriate to restore the issue to Assessing Officer for re-adjudication with similar directions. The ground No. 1 of the appeal is allowed for statistical purpose in the same terms. Deduction u/s. 36(1)(viia) to the extent of provision made in the books of account for bad and doubtful debts u/s. 36(1)(viia) of the Act to be allowed. Disallowance of the claim of loss as per securities trading account held under HTM category - HELD THAT:- In assessee‟s own case [2014 (10) TMI 210 - ITAT PUNE] Plea of the learned CIT-DR is quite untenable primarily because the very nature of banking activities allowed as per the Banking Regulation Act, 1949 are in the sphere of business / trade activities; and, accordingly the recognition of investments in HTM category as “stock-in-trade‟ is not dependent on the frequency of their sale / purchase carried out by the assessee-bank. We, therefore, conclude by holding that in the present case the method of valuation of the closing stock adopted by the assessee i.e. cost or market value, whichever is lower is fair and proper and the income-tax authorities have erred in not accepting the same. The orders of the authorities below on this aspect are hereby reversed. As decided in BANK OF MAHARASHTRA [2018 (3) TMI 316 - BOMBAY HIGH COURT] Tribunal was justified in deleting the addition in allowing loss of valuation of Held to Maturity (HTM) securities, when HTM securities are capital in nature Disallowance u/s. 14A - contention of the assessee is that the investments were held by the assessee as stock in trade, therefore, no disallowance u/s. 14A was required to be made in respect of exempt income earned on shares held as “Stock in trade” - HELD THAT:- The Hon‟ble Apex Court in the case of Maxopp Investment Ltd. Vs. Commissioner of Income Tax [2018 (3) TMI 805 - SUPREME COURT] has approved the judgment rendered in the case of Pr. Commissioner of Income Tax Vs. State Bank of Patiala [2017 (2) TMI 125 - PUNJAB AND HARYANA HIGH COURT] Therefore, in view of the law settled by the Hon‟ble Apex Court, no disallowance u/s. 14A is warranted in respect of shares held by the assessee as stock in trade. Since, the disallowance u/s. 14A has been set at naught on the ground of assessee holding the investment as “stock in trade‟, the alternate contention of assessee with regard to disallowance made under Rule 8D(2)(ii) in respect of interest expenditure has become academic. Thus, in view of our above findings ground No. 6 raised in the appeal by the assessee is allowed. Disallowance of provision for wage revision - wage revision liability is not ascertained as on 31-03-2010 - HELD THAT:- In the present case the authorities below have erred in coming to the conclusion that the liability has not crystallized in the assessment year under appeal as there was no quantification of payment of wages. The creation of liability and quantification of liability are two different stages. As soon as the liability is crystallized, it is no more contingent. The quantification and discharge of liability is the second stage which can happen in future. Thus, we find merit in the ground raised by assessee. Accordingly, the claim of assessee in respect of provision for wage arrears is accepted. Eligibility for claiming deduction u/s. 36(1)(viii) - HELD THAT:- The deduction has been denied to the assessee for the reason that the assessee has failed to furnish relevant documents to claim such deduction. On the contrary the contention of the assessee is that all the relevant documents were furnished before the Assessing Officer. Without further going into the merits, the Assessing Officer is directed to examine the documents furnished by the assessee and thereafter decide the issue de novo, after affording reasonable opportunity of hearing to the assessee, in accordance with law. Thus, the ground No. 8 is allowed for statistical purpose. Disallowance u/s. 40(a)(ia) - short deduction of tax at source - HELD THAT:- Hon‟ble Calcutta High Court in the case of Commissioner of Income Tax Vs. S K Tekriwal [2012 (12) TMI 873 - CALCUTTA HIGH COURT] has held that the provision of section 40(a)(ia) are not attracted where there is short deduction of tax. The provision of section 40(a)(ia) apply where no tax has been deducted at source. Thus, in view of the law laid down in the case of Commissioner of Income Tax Vs. S K Tekriwal (supra) no disallowance u/s. 40(a)(ia) is warranted. Depreciation on UPS is restricted to 60% - See M/S. SARASWAT INFOTECH LTD. [2013 (1) TMI 861 - BOMBAY HIGH COURT] Disallowance of interest on NPAs - HELD THAT:- The issue is no more res integra. The assessee has created a provision in the P & L account on account of interest on NPAs and has claimed the same during the period relevant to the assessment year under appeal. The issue is squarely covered in favour of the assessee by the decision rendered in the case of Commissioner of Income Tax Vs. Deogiri Nagari Sahakari Bank Ltd. [2015 (1) TMI 1218 - BOMBAY HIGH COURT] . The Hon‟ble High Court following the decision of Hon‟ble Apex Court in the case of UCO Bank Vs. Commissioner of Income Tax [1999 (5) TMI 3 - SUPREME COURT] held that interest on sticky loans has to be allowed. Thus, in view of the aforesaid decision the ground No. 11 raised in the appeal by the assessee is allowed. Applicability of MAT provisions u/s. 115 JB on assessee bank - HELD THAT:- The said provisions are invoked only in respect of companies. The assessee is a Bank and is not governed by Companies Act, 1956. Hence, the said provisions would not apply in the case of a Bank. Assessee, being a banking company, does not fall within the purview of section 115JB
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