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2018 (12) TMI 322 - ITAT PUNEDisallowing deduction claimed u/s 36(1)(viia) - assessee was not having any rural advances and hence, was not eligible to claim of deduction u/s 36(1)(viia) - whether in the absence of any rural branches, can the benefit of deduction be allowed under section 36(1)(viia) of the Act and that also to the extent of 7.5% of total income - Held that:- The assessee is entitled to the claim of deduction under section 36(1)(viia) of the Act to the extent of 7.5% of total income. The assessee co-operative bank do not have any rural branches, hence is not entitled to the second part claim of 10% of advances made by rural branches. The deduction is allowable with a rider to satisfy the provisions of said section i.e. making a provision to that extent in the books of account. The first issue which is raised in the case of different co-operative banks stands decided in favour of assessee. Addition made on account of interest on NPAs - Held that:- The said issue is squarely covered by the decision in CIT Vs. Deogiri Nagari Sahakari Bank Ltd.[2015 (1) TMI 1218 - BOMBAY HIGH COURT]. In view of the issue being covered, we find no merit in the aforesaid addition and the same is deleted. The ground of appeal No.2 raised by assessee is thus, allowed. Addition on account of unclaimed dividend - Held that:- The said issue also stands covered by the ratio laid down by the Hon’ble Bombay High Court in CIT Vs. Deogiri Nagari Sahakari Bank Ltd. [2015 (1) TMI 1218 - BOMBAY HIGH COURT] wherein it was held that unclaimed dividend amounts to excess provision for dividend made by the assessee on an earlier occasion, which has been reversed by the assessee in the year under consideration and transferred to reserve account - also where the provision for dividend made earlier was not charged on profits but it was appropriation profits available post taxation, then there is no merit in the taxability of unclaimed dividend. - Decided in favour of assessee.
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