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2022 (11) TMI 989 - AT - Income TaxDeduction u/s 36(1)(viia) - Assessee calculated “aggregate monthly average advances” by taking into consideration the outstanding balances of the previous month, i.e., the opening balance for computing the amount of advance as outstanding at the end of each month as per the language of Rule 6 ABA of the Income Tax Rules, 1962 - AO rejected the computation of the assessee and held that only incremental advances made during the month can be considered while calculating the figure of “aggregate monthly average advances” and if the opening balance is also considered it would result in the assessee claiming deduction of more than actual advance especially where the advance has not been paid back - HELD THAT:- Hon’ble Calcutta High Court in Uttarbanga Kshetriya Gramin Bank [2018 (5) TMI 903 - CALCUTTA HIGH COURT] has affirmed the findings rendered by the Division Bench of the Tribunal in Uttar Banga Kshetriya Gramin Bank [2015 (7) TMI 1280 - ITAT KOLKATA] wherein the Division Bench of the Tribunal held that for the purpose of section 36(1)(viia), to compute the aggregate monthly average advance made by the rural branch of scheduled Bank, the amount of advances by each rural branch as outstanding at the end of the last day of each month comprised in the previous year be taken into consideration. The Hon’ble Madras High Court in M/s City Union Bank Ltd. [2022 (4) TMI 113 - MADRAS HIGH COURT] has concurred with the decision of the Hon’ble Calcutta High Court. Thus, once two Hon’ble High Courts of the country have expressed their opinion in respect of the issue which arose before us, in absence of contradictory view by any other Hon’ble Court of equivalent or higher judicial hierarchy being brought to our notice, we as a matter of judicial propriety are bound to follow the view so expressed by the Hon’ble High Courts in decisions cited supra. Thus as relying we decide the question referred for our adjudication in favour of the assessee and held that the deduction under section 36(1)(viia) r/w Rule 6 ABA is to be allowed on the total outstanding advances at the end of each month considering the opening balances.
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