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2017 (5) TMI 706 - ITAT JODHPURRevision u/s 263 - disallowance of provision for standard assets holding that such provision is not allowable as provision for bad debt allowable under section 36(1)(viia) - Held that:- As referring to a copy of a letter by the Principal Commissioner of Income-tax-1, Jodhpur it is absolutely clear that the very basis of order under section 263 of the Act is the assessment order which was not available in the file. That therefore the order under section 263 of the Act passed by the learned Commissioner of Income-tax cannot sustain in law and at the very outset the said order becomes invalid because of the fact that the order of the Assessing Officer whether it is erroneous or prejudicial to the interests of the Revenue has not been determined in this case in the very absence of the assessment order. Furthermore the issue with regard to the allowability of the provision for standard assets is covered by the decision of co-ordinate Bench of the Income-tax Appellate Tribunal, Jodhpur in the case of Nagaur Urban Co-operative Bank Ltd. v. Asst. CIT [2013 (11) TMI 1696 - ITAT JODHPUR]] and is in favour of the assessee wherein held The terminology "Reserve for NPA" has been used by the assessee in accordance with the RBI directions. As is evident from the assessment order the assessee has indeed created "Reserve for NPA". For claiming the benefit under the provisions of section 36(1)(viia)(a) the conditions to be satisfied is ; that the provision for bad and doubtful debts should have been made by the bank eligible to claim such deduction. Co-operative banks do not strictly follow the provisions of the Banking Regulation Act for the purpose of maintaining their books of account. In our considered opinion, the assessee has created provisions for bad and doubtful debts may be under different nomenclature. This will not disentitle the assessee for claiming deduction under the provisions of section36(1)(viia)(a). The purpose of creation of reserve for NPA is same i.e., creating provision towards bad and doubtful debts. In view of the above, we find that the assessment order is neither erroneous nor prejudicial to the interests of the Revenue - Decided in favour of assessee
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