TMI Blog2014 (3) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... cation – Decided against Revenue. Claim of interest reversed on NPA – Held that:- The decision in CIT v. Industrial Finance Corporation of India Limited [2011 (7) TMI 87 - DELHI HIGH COURT] followed - The un-amended section 36(1)(viii) allowed the deduction to a financial institution for an amount not exceeding 40 per cent of the total income carried to a special reserve - It is clear from the reading of the provisions of clause (viii) of sub-section (1) of s. 36 that the words 'and maintained' were inserted only by way of amendment made w.e.f. 1.4.1998 - As per the un-amended provision which is applicable, only requirement was for creation of reserve equivalent to Rs.40 per cent of total income by debit to the profit and loss account – thus, the order of the CIT(A) upheld – Decided against Revenue. Claim of deduction u/s 35D of the Act - Claim being 1/5th of public issue and bond issue expenses – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been decided that, the provisions of section 35D of the Act were applicable only when the expenses are incurred after commencement of business in connection with expansion of industrial undertaking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remitted back to the AO for fresh adjudication of applicability of Rule 8D – Decided in favour of Assessee. Applicability of section 115JB of the Act - Banking company – Held that:- The decision in Krung Thai Bank PCL Versus Joint Director of Income Tax - International Taxation, Mumbai [2010 (9) TMI 18 - ITAT, MUMBAI] followed - The provisions of Section 115 JB can only come into play when the assessee is required to prepare its profit and loss account in accordance with the provisions of Part II and I II of Schedule VI to the Companies Act - The starting point of computation of minimum alternate tax under section 115 JB is the result shown by such a profit and loss account - In the case of banking companies, however, the provisions of Schedule VI are not applicable in view of exemption set out under proviso to Section 211 (2) of the Companies Act - The final accounts of the banking companies are required to be prepared in accordance with the provisions of the Banking Regulation Act. The provisions of Section 115 JB cannot thus be applied to the case of a banking company – thus, the provisions of section 115JB of the Act are not applicable to the assessee which is a banking comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(viia)(a) in previous years, and/or to be made during the year, amount of deduction u/s 36(1)(viia)(a) should be computed only to the extent provision for rural advances debited to P L account. Since the grounds raised are legal grounds which go to the root of the matter relating to allowance of deduction u/s 36(1)(viia), the same may kindly be admitted. Delay may kindly be condoned in view of the legal position clarified by the Hon'ble Supreme Court vide their Lordships' order dated 17.2.2012 in the case of Catholic Syrian Bank and Others reported in 343 ITR 270 (SC). II. Vide D.R's letter dated 11.7.2012: (i) Assessee's claim of deduction u/s 36(1)(viia) of Rs.593.16 crores is not in accordance with the provisions under the Act read with Rule 6ABA of the IT Rules 1961 and, hence, not allowable to that extent? (ii) Since (a) non-rural bad and doubtful debts may be written off and allowable u/s 36(1)(vii) independently, and (b) only rural debts written off can be set off/debited against the provisions made u/s 36(1)(viia) in previous years, and/or to be made during the year, amount of deduction should be computed only with reference to the average a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal grounds sought to be raised by the Revenue being inter-connected; we thought it fit to deal with the same concurrently as below. 4. Briefly stated, the facts of the issues are as under: The assessee Bank is carrying on the business of banking. During the year under dispute, the assessee had, in its return of income claimed deduction of Rs.593,16,34,351/- u/s 36(1)(viia) of the Act. Being queried by the AO during the course of assessment proceedings, the assessee came up with a clarification that - 'We have made a provision for bad and doubtful debts [NPAs] for Rs.349,87,49,928/- in our books during the FY 2007-08 [AY 2008-09]. However, we are claiming deduction u/s 36(1)(viia) to the extent of Rs.541,49,17,628/- being 10% of average rural advances of Rs.5414,91,76,282/- and 7.5% of gross total income before allowing this deduction amounting to Rs.54,38,90,855/-, relying on ITAT Bangalore Bench decision dated 23.6.2000 in our own case for the AY 1987-88 [78 ITD 103]. Our similar claims up-to the AY 2007-08 is allowed by CIT (A), Mangalore. ITAT, Bangalore has allowed the claim of Vijaya Bank, Canara Bank also.' [Courtesy: Page 4 of the asst. order] 4.1. After ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or bad and doubtful debts as against setting off of only a sum of Rs.49,18,18,976/- being write off of rural bad debts. 7.7. Since the assessee has set off Rs.49,18,18,976/- against the provisions, the balance claimed as deduction u/s 36(1)(vii) amounting to Rs.392,30,06,575/- has to be disallowed since the claim for bad debt is less than the amount in credit in the account of Provision for Bad and Doubtful Debts. 7.8. It may be mentioned here that out of total bad debts written off of Rs.441,48,25,551/- shown by the assessee in the computation, Rs.409,34,00,121/- is on account of Prudential write off only which is out of only provision created out of advances and classified as 'non-performing assets' without actually written off of bad debts. The jurisdictional Hon'ble Karnataka High Court in its decision in the case of Vijaya Bank in ITA No. 54 55/2004 has held that mere creation of provision does not amount to written off of 'bad debts' and that deduction of provision for non-performing assets out of advances do not amount to written off. However, the Hon'ble Supreme Court in Civil Appeal Nos. 3286 3287 of 2010 arising out of SLP filed against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e through the decisions relied on by the ld. AR. As submitted by the ld. AR it has been held in various judicial decisions that the proviso to section 36(1)(vii) which restricts the deduction in respect of bad debts written off is applicable only for rural branches. The jurisdictional High Court in the case of Karnataka Bank Ltd (supra) had taken a similar view. 4.6. In the case of south Indian Bank the decision of Division Bench cited by the appellant was reversed by Full Bench of Hon'ble High Court of Kerala in 326 ITR 174. The decision of Karnataka High Court in the case of Karnataka Bank cited by the appellant and other cases cited above are basically relying on the Division Bench decision in the case of South Indian Bank. When this was pointed out the appellant filed recent decision of Hon'ble Supreme Court in the case of Catholic Syrian Bank Limited v. CIT Civil Appeal No.1143 of 2011 dated 17.2.2012 which is unreported. In the question whether on the facts and circumstances of the case the assessee is eligible for deduction of bad and doubtful debts actually written off in view of section 36(1)(vii) which limits the deduction allowable under the proviso to the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other hand, the learned AR supported the findings of the CIT (A) on the issue. 5. We have carefully considered the rival submissions and also perused the relevant materials on record. 5.1. At this point of time, we would like to refer to the findings of the earlier Bench of this Tribunal in the assessee's own for the immediately preceding assessment years 2006-07 and 2007-08 in ITA Nos.668 669/10 ITA NOS.708 709/2010 dated 19.6.2013 wherein an identical issue to that of the present one had cropped up for consideration. The earlier Bench had an occasion to refer to the findings of the ITAT, Bangalore Bench in the case of Canara Bank in ITA No.58/Bang/2004 dated 9.6.2006. In the aforesaid findings, the Bench had considered the decision of the ITAT in the case of Syndicate Bank reported in 78 ITD 103 (Bang) and also the judgment of the Hon'ble Punjab and Haryana High Court in the case of State Bank of Patiala v. CIT (2005) 272 ITR 54 (P H) and came to the conclusion that the ruling of the Hon'ble High Court had to be followed. 5.1.1. In consonance with the findings of the earlier Bench in the assessee's own case for the AYs 2006-07 and 2007-08 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nner; Provided that a scheduled bank or a non-scheduled bank referred to in this sub-clause shall, at its option, be allowed in any of the relevant assessment years, deduction in respect of any provision made by it for any assets classified by the Reserve Bank of India as doubtful assets or loss assets in accordance with the guidelines issued by it in this behalf, for an amount not exceeding five per cent of the amount of such assets shown in the books of account of the bank on the last day of the previous year.' The section clearly lays down that deduction of 7.5.% of the total income has to be allowed as deduction. The plea of the learned DR to restrict the allowance to 7.5% of the total income of the rural branches is contrary to the provisions of the Act. The deduction on account of PBDD in respect of non- performing assets contemplated by the first proviso to sec. 36(1) (viia)(a) is based on classification of Non-performing assets as per the prudential norms of Reserve Bank of India. The AO did not dispute the classification as made by the assessee in its books of accounts. The deduction under the first proviso to sec. 36(1)(viia)(a) of the Act is in addition to what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision for bad and doubtful debts u/s 36(1)(viia) of the Act as to whether the AAR A was worked out on the basis of 2001 Census because the assessee has in one of its letters dated 19.2.2008 claimed that AARA have been worked out based on 1991 Census. The assessee in response to the same by its letter dated 20.2.2008 gave a working of AARA as per 2001 Census data. The figure as originally given in the books in this regard was revised to 3525,25,92,038/-. In Para III 1.4 of the AO's order, the AO has accepted such working given by the assessee. The CIT (A) has also not thought it fit to make any enquiries in this regard in exercise of his powers of enhancement. Assuming the order of the AO to be erroneous on this aspect, the same could only be set right in proceedings u/s 263 of the Act. This issue does not arise out of the order of the AO or CIT (A) at all. The issue is no doubt one facet of the claim for deduction u/s 36(1) (viia)(a) of the Act but this aspect has been examined and accepted by the AO in the order of assessment and not interfered with by the CIT (A) either in first appeal or by CIT in exercise of powers u/s 263 of the Act. We are, therefore, of the view that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only when the account is identified as NPA. The same cannot be treated as prior period expenses since the cause of action arises only in the current year when the accounts have been identified as NPA. [Refer: Para 5.2 of the CIT(A)'s order]. 6.2. Aggrieved, the Revenue came up before us with a plea that the CIT (A) failed to appreciate the fact that the AO had disallowed the sum not as prior period expenses, but, on the ground that the assessee was seeking reduction of current year's income claiming that in earlier year income was shown on accrual basis wrongly which was not permissible and also considering that the sum had not been written off by the assessee as bad debt u/s u/s 36(1)(vii) of the Act. 6.2.1. On the other hand, the learned AR supported the stand of the CIT (A) on the issue. 6.3. In the meanwhile, our reference was drawn to the fact that a similar issue to that of the present one came up for adjudication before the earlier Bench of this Tribunal in the case of Syndicate Bank in ITA Nos. 377 378/B/2010 dated 7.6.2013 for the assessment years 1990-91 and 1999-2000. After having considered the rival submissions, the earlier Bench had decided the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clear from the reading of the provisions of clause (viii) of sub-section (1) of s. 36 that the words 'and maintained' were inserted only by way of amendment made w.e.f. 1.4.1998. As per the un-amended provision which is applicable to the instant cases, only requirement was for creation of reserve equivalent to Rs.40 per cent of total income by debit to the profit and loss account. In this scenario, the moot question was as to whether the amendment was prospective or it was only clarificatory in nature and was to be given retrospective effect........... 6.3.2. In conformity with the reasoning of the earlier Bench on an identical issue and also the judgment of the Hon'ble Delhi High Court (supra), we are of the view that the CIT (A) was justified in allowing the issue in favour of the assessee. It is ordered accordingly. 7. The third ground raised by the Revenue is with regard to the allowing of the assessee's claim by the CIT (A) for deduction u/s 35D of the Act, amounting to Rs.3,33,10,139/- being 1/5th of public issue and bond issue expenses. 7.1. Briefly stated, the assessee had claimed deduction u/s 35D of the Act of Rs.2,45,15,858/- being 1/5th of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etime expenditure incurred to facilitate issue of shares and bonds. As capital was raised to meet the banks working capital needs in keeping with RBI's capital adequacy norms, the expenditure was incurred in the course of business and was incidental to the appellant's regular banking business. Under these circumstances, the expenditure is allowable under section 37(1). However, since the appellant has chosen to amortize the expenditure over five years in terms of its own accounting policy which is consistently followed, I direct that the expenditure debited in the current year may be allowed as general deduction u/s 37(1). In view of this, I delete the additions of Rs.2,45,15,858/- and Rs.87,94,281/- towards expenditure incurred on public issue of shares and bond... 7.3. Aggrieved, the Revenue has come up before us for restoration of the AO's stand on the issue. It was contended by the learned DR that the CIT (A) failed to appreciate the fact that the expenses were admissible after commencement of business, only in connection with either extension of industrial under- taking or setting up of new industrial unit. It was, further, argued that the CIT (A) failed to app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench on an identical issue of the present one under dispute, we are of the view that the CIT (A) was not justified in deleting the addition made by the AO on this score. In essence, the addition made by the AO on this issue is upheld. 7.3.3. With regard to the claim of the expenses incurred by the assessee on public issue of bonds, the earlier Bench had reasoned as under: 116.........The remaining sum of Rs.60,40,296/- being 1/5th of expenses of Rs.3,42,01,479/- is the expenses incurred by the assessee on public issue of bonds. We have already held while deciding the ground No.5 of the Revenue in AY 2006-07 that expenditure incurred on raising funds by issue of bonds is akin to cost of borrowing. In the present year, we find that the claim of the assessee has been tested u/s 35D of the Act. We are of the view that the claim of the assessee is allowable u/s 37(1) of the Act as expenditure wholly and necessarily incurred in connection with the business of the assessee. The assessee has claimed only 1/5th of the total expenses and has amortized the claim of expenses for the period of the bond. We therefore uphold the order of the CIT (A) to the extent of allowing deduction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following mercantile system of accounting in respect of interest from securities for the purpose of final accounts as per Annual Report under the Companies Act, but, had deviated and sought to reduce a sum of Rs.16.76 crores as interest accrued, but, not fallen due for the purpose of taxation under the Income-tax Act. It was also contended that the CIT (A) failed to appreciate the fact that the assessee while acknowledging the interest income as accrued in the annual report for the year-ending 31.3.2008 and the basis on which accounts finalized and dividends paid, has sought to defer the taxation under the I.T. Act of the above amount on the ground that it is yet to receive the same. This in other words, it was argued, represents dual treatment of the same income under different Acts and the assessee has followed receipt or cash system of accounting in respect of interest accrued during the AY 2008-09 by offering it for taxation under the I.T. Act in the subsequent year which is not permissible under the amended provisions of s. 145. It was also the stand of the learned DR that the CIT (A) failed to appreciate the fact that the securities have been classified as current investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the findings of the earlier Bench on a similar issue in the assessee's own case (supra), we find no infirmity in the stand of the CIT (A) warranting our interference. In essence, this issue is decided against the Revenue. It is ordered accordingly. 9. The last ground raised by the Revenue is with regard to loss on valuation of investments amounting to Rs.216,64,40,818/-. 9.1. During the course of assessment proceedings, the AO had observed that the assessee Bank, in its computation of business income, deducted Rs.196,09,30,654/- being profit on sale of investments and added back Rs.9,66,20,161/- as depreciation on investments and Rs.49,61,34,108/- as amortization. Observing that the claim for loss in trading of investments had not been allowed in earlier assessment years, the AO had called for details of valuation of investments as stock-in-trade. The AO had also observed that the assessee could not value investments under the category of 'Head to Maturity' [HTM] as stock-in-trade and could not adopt dual method for valuation of investments, viz., one method for computing book profits and another method for income-tax computation. It was observed by the AO that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made on loss on valuation. The Hon'ble High Court of Karnataka has, in the case of CIT v. Corporation Bank (1998) 174 ITR 616 also upheld the ITAT's decision. Respectfully following these judicial pronouncements, I delete the disallowance of the investment trading loss of Rs.216,64,40,818/- claimed by the appellant and direct the AO to allow the same as deduction in computing the total income..... 9.2.1. Before us, it was the stand of the Revenue that - the CIT (A) erred in not considering the fact that during the year the assessee had made profit of Rs.196,09,30,654/- on sale of investments which was credited to P L account as against the loss of Rs.30,21,30,325/- claimed; - the CIT (A) failed to consider that as per the guidelines issued by the RBI, the assessee can claim depreciation only in respect of investments held under the category 'Held for Trade' and 'Available for sale' and in the case of 'Head to maturity' category, depreciation cannot be claimed as these securities were not allowed to be marked to market; - the CIT (A) erred in not considering the fact that the assessee bank up-to the AY 2004-05 followed RBI guidelines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the CIT(A) erred in sustaining the Assessing Officer's action in disallowing an estimated expenditure deemed to have been incurred in earning the exempted income as disallowable under Section 14A while computing the total income in the conventional method as well as in arriving at the book profit under Section 115JB where no such expenditure was ever incurred by the Appellant. 2.1 That the CIT(A) ought to have noted and held that the Appellant's investment resulting in exempted income had come out of own funds or non-interest bearing funds and as such there was no financial or interest cost at all warranting assumption of expenditure for purposes of Section 14A of the Act. 2.2 That the CIT(A) failed to appreciate that Rule 8D could be applied only if the Assessing Officer was not satisfied with the correctness of the claim of expenditure or the claim that no expenditure had been incurred and in the absence of any reasons given by the Assessing Officer to conclude that the claim of the Appellant was incorrect, no disallowance could be made in terms of Rule 8D. 2.3 That the CIT(A) failed to appreciate that the assets earning tax free income were trading assets of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and deemed as a company under the latter Act could not be construed as a company for the purposes of charging MAT. 4.1 That the CIT(A) erred in upholding the disallowance of loss as per investment trading account in computing book profits under Section 115JB, having failed to appreciate that the investments held by the Appellant constituted stock in trade and that the loss as per trading account did not represent any provision much less diminution in the value of its assets and as such did not warrant add back for the purposes of Section 115JB. 4.2 That the CIT(A) erred in upholding the adding back to book profits, estimated expenses Rs.30,09,99,982/- attributable to earning tax free income. 4.3 That the CIT(A) ought to have appreciated that since the Appellant had not incurred any expenditure in earning tax free income no amount should have been added in computing the book profits on the same grounds and for the same reasons stated in ground no. 2 above. 4.4 Without prejudice to the above, the CIT(A) erred in upholding the disallowance of the same expenditure that was disallowed in the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year under consideration, the assessee has earned an amount of Rs.85,13,79,986 as exempt income; comprising of dividend income from shares and venture funds exempt u/s.10(34) of the Act and Long Term Capital Gains ('LTCG') on sale of shares and venture funds exempt u/s.10(38) of the Act. The record shows that the assessee has not shown the incurrence on any expenditure for the earning of the above exempt income. 11.2 In the course of assessment proceedings, the Assessing Officer, on examination of this issue, held that expenditure incurred for earning such exempt income is required to be disallowed. The Assessing Officer also held that the provisions of Rule 8D of the IT Rules, 1962 are applicable in the relevant period and worked out the disallowance of expenditure incurred in earning such exempt income, in accordance with the provisions of sec. 14A r.w. Rule 8D, at Rs.30,09,99,982 as under: i) Amount of expenses directly related to the earning income not forming part of total income [Rule 8D(i)] : NIL. ii) Amount of expenses on interest indirectly related to the earning of exempt income [Rule 8D(ii)] : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its case, the learned Authorized Representative relied on various judicial decisions, including the decision of the co-ordinate bench of this Tribunal in the assessee's own case for Assessment Year 2006-07 and 2007-08 in ITA Nos.708 709/Bang/2010 dt.19.6.2013, in which it followed its own earlier decision in the assessee's case for Assessment Year 2005-06. 11.5 Per contra, the learned Authorized Representative placed support and relied on the decisions of the authorities below, in making and sustaining the disallowance u/s.14A r.w. Rule 8D amounting to Rs.30,09,99,982. 11.6.1 We have heard both parties at length and perused and carefully considered material on record including the judicial decisions cited. As regards the applicability of the provisions of section 14A of the Act to the assessee's case, we find that this issue has been dealt with by the co-ordinate bench of this Tribunal in the assessee's own case in earlier years in ITA No.668 669/Bang/2010 dt.19.6.2013. In this order, the co- ordinate bench of the Tribunal relied on the decision of the Hon'ble Bombay High Court in the case of Godrej Boyce Mfg. Co. Ltd., 328 ITR 81 (Bom) holding, at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order for the A.Y. 2005-06. 11.6.2 From the above decision (supra), it is clear that the co-ordinate bench of this Tribunal has, in the assessee's own case in earlier years held that the provisions of section 14A of the Act are applicable to the assessees. Therefore, following the decision of the co-ordinate bench of this Tribunal in ITA Nos.6689, 669, 708 709/Bang/2010 dt.19.6.201, we hold that the provisions of section 14A of the Act are applicable to the assessee. We therefore dismiss ground Nos.1.1, 2.3 and 2.4 raised by the assessee are dismissed. 11.7.1 In this appeal, the learned Authorized Representative of the assessee has contended that the Assessing Officer has not given any reason to conclude that the claim of the assessee is incorrect and in the absence of the same, no disallowance can be made under Rule 8D of the IT Rules, 1962. The submissions and contentions of the assessee in this regard have been carefully considered. In terms of section 14A(2) of the Act, the Assessing Officer shall determine the amount of expenditure incurred in relation to exempt income, if having regard to the accounts of the assessee, he/she is not satisfied with the correctnes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opening day and closing day of the relevant year under consideration, income from which do not or shall not form part of total income. 11.8.3 As regards the first limb of Rule 8D(i), there is no dispute since the Assessing Officer has accepted the explanation of the assessee that there is no direct expenditure and has accepted that the expenditure under this limb as NIL. 11.8.4 As regards the second limb in respect of interest expenditure not directly related to any particular income i.e. Rule 8D(ii), it is the contention of the assessee that the investments which have yielded the exempt income has come out of its own funds or non-interest bearing funds and therefore no disallowance can be made under Rule 8D(ii). In support of this proposition, the assessee placed reliance on the following judicial decisions : (i) CIT V Reliance Utilities power Ltd. (2009) 313 ITR 340. (ii) CIT V UTI Bank Ltd. (2013) 32 Taxman.Com 370. (iii) CIT V Gujarat Power Corporation (2013) 352 ITR 583 (Guj). It is now settled principle, upheld in several judgments including those relied upon by the assessee (supra), that disallowance towards interest is not tenable if the investments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is not a company registered under the Companies Act, 1956 but is a Bank, governed by the provisions of the Banking Companies (Acquisition Transfer of Undertakings) Act and is only deemed to be a company for the purposes of Income Tax Act, 1961. In view of this, it is submitted that the assessee cannot be construed as a company for the purposes of section 115JB of the Act. 12.2 The learned CIT (Appeals) upheld the decision of the Assessing Officer that the provisions of section 115JB of the Act are applicable to the assessee for the following reasons : (i) By virtue of the deeming provisions of the Banking Companies (Acquisition Transfer of Undertakings) Act, the assessee is deemed to be a company; and (ii) The assessee has accepted the applicability of section 115JB in the earlier years and has raised this issue only for the first time. 12.3.1 We have heard both the learned Authorized Representative for the assessee and the learned Departmental Representative for revenue and perused and carefully considered the material on record. The issue of the applicability of section 115JB of the Act to the assessee's case has been considered and adjudicated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the legislative intent and plain wordings of the statute. 7. The plea of the assessee is indeed well taken, and it meets our approval. The provisions of Section 115 JB can only come into play when the assessee is required to prepare its profit and loss account in accordance with the provisions of Part II and I II of Schedule VI to the Companies Act . The starting point of computation of minimum alternate tax under section 115 JB is the result shown by such a profit and loss account. In the case of banking companies, however, the provisions of Schedule VI are not applicable in view of exemption set out under proviso to Section 211 (2) of the Companies Act. The final accounts of the banking companies are required to be prepared in accordance with the provisions of the Banking Regulation Act. The provisions of Section 115 JB cannot thus be applied to the case of a banking company. 99. We are of the view that in the light of the decision of the Mumbai Bench of the Tribunal, we have to necessarily hold that provisions of section 115JB of the Act are not applicable to the assessee which is a banking company. The decisions relied upon by the ld. counsel for the assessee, clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
