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2019 (3) TMI 16 - HC - Income TaxBad debts written off - non-rural branches claimed under clause (vii) of Section 36(1) - HELD THAT:- Issue has to be decided in favour of the assessee and against the Revenue, going by the decision in Catholic Syrian Bank Ltd. v. C.I.T. [2012 (2) TMI 262 - SUPREME COURT OF INDIA] AO shall verify the computation, looking into whether there is any allowance granted for provision of bad debts in non-rural branches for the previous years. In which event alone, the allowance of written off bad debts in non-rural branches, will be confined to the excess allowed from the provision made, and deduction allowed, for non-rural branches. In making the computation, there can be no consideration of the provision for bad debts for rural branches as granted under clause (viia) of Section 36(1). Hence, the first question is answered in favour of the assessee and against the Revenue. Determination of non-rural branches - provision for bad debts u/s 36(1)(viia) - HELD THAT:- On the second question, the issue stands covered in favour of the Revenue and against the assessee. In C.I.T. v. Lord Krishna Bank Ltd. [2010 (10) TMI 860 - KERALA HIGH COURT] this Court had held that the determination of non-rural branches shall be only with reference to the revenue villages and not solely on the basis of the population. This Court specifically noticed the anomaly insofar as even wards in municipalities being included for identification of rural branches, when the identification is on the basis of the population alone in wards of the local authorities. Alternative submission before High Court - no contention before lower authorities - HELD THAT:- A similar contention was raised in assessee's own case in a batch of cases decided [2018 (12) TMI 1611 - KERALA HIGH COURT] and connected cases. We have found that such a question does not arise in the Revenue's appeal. The assessee had also not taken up such a contention before any of the authorities. The assessee cannot be permitted to take that contention at this stage, especially when there is no appeal filed by the assessee. We hence refuse to look into the said contention. Accrual of income - interest accrued on securities which are not yet matured has to be assessed as income for the year - HELD THAT:- The third question stands covered in favour of the assessee as per the decision of this Court in C.I.T. v. Federal Bank Ltd [2008 (1) TMI 195 - KERALA HIGH COURT]
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