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2018 (6) TMI 144 - AT - Income TaxAddition of depreciation on valuation of investments - whether fall in value of investment of securities shown as investments in the books of account can be allowed as deduction? - Held that:- An identical issue was dealt with by us threadbare in the case of Canara Bank vs. JCIT [2016 (4) TMI 429 - ITAT BANGALORE] we hold that the CIT(A) was correct in law in allowing fall in value of investment as business loss. Addition u/s 14A - Held that:- An identical issue was decided by us in the case of Canara Bank [2014 (1) TMI 1586 - KARNATAKA HIGH COURT] wherein it was held that resort to disallowance under section 14A can be made only in case where the Assessing Officer recorded satisfaction as to how the claim of the assessee that no expenditure was incurred to earn exempt income is incorrect. Addition made on broken period interest - Held that:- This issue is no longer res integra as following THE COMMISSIONER OF INCOME TAX VERSUS THE BANK OF RAJASTHAN LTD., [2010 (4) TMI 217 - BOMBAY HIGH COURT] Addition made on account of bad debts written off - Held that:- In the present case facts relating to this issue have not been brought out by the Assessing Officer. Therefore we remand this issue back to the file of the Assessing Officer for the limited purpose of verifying that the amount of claim under section 36(1)(vii) should be limited to the amount written off in the books of account i.e. provision for bad debts debited to P and L account and reduced from sundry advances account. It may not be out of place to mention here that the provisions of section 36(1)(vii) and 36(1)(viia) are independent of each other and the assessee is entitled to deduction u/s 36(1)(vii) in addition to the amount of deduction for provision for bad and doubtful debts u/s 36(1)(viia) of the Act. Appeal filed by the revenue is partly allowed for statistical purposes Non deduction of tds - whether the assessee is liable for tax deduction at source on the charges paid to National Financial Switch and Cash Tree Consortium for use of ATM of other banks by its customers - disallowance u/s 40(a)(ia) - Held that:- Hon'ble Supreme Court in the case of Kotak Securities [2016 (3) TMI 1026 - SUPREME COURT] held that consultancy managerial services involving services rendered by human efforts where services are made available to all customers and there is nothing special, exclusive or customer service charges, it does not par take character of managerial or Technical Services. In the light of this decision we hold that the assessee bank is not liable for tax deduction at source on these payments. We direct the Assessing Officer to delete addition on account of technical service. MAT - Assessee-bank is not liable for tax under section 115JB for the year under consideration. Provisions of section 36(1)(vii) and 36(1)(viia) are independent of each other. We remit this issue back to the file of the Assessing Officer to compute the amount of allowance in accordance with the provisions of section 36(1)(viia) after affording a reasonable opportunity of being hard to the assessee.
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