Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

The Vellore District Central Co-Op Bank Ltd. Versus The Assistant Commissioner of Income Tax

Revision u/s 263 - in the assessment order deduction u/s. 36(1)(viia) was allowed to the extent of ₹ 14,47,40,656/- as against restricting it to the extent of eligible amount of reserve for Non-performing assets or provisions for bad & doubtful debts shown in the Balance Sheet as on 31.03.2007 at ₹ 68,20,002 - claim of the Ld. A.R. was that the provisions made as per Section-36(1)(viia) has to be allowed though debited under different name such as "Reserved for NPA account" instead o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cal purposes - ITA No. 1217/Mds./2015 - Dated:- 11-12-2015 - N. R. S. Ganesan, JM And A. Mohan Alankamony, AM For the Appellant : Mr R Vijayaraghavan, Adv For the Respondent : Mr Jayaram Raipura, CIT-DR ORDER Per A. Mohan Alankamony, Accountant Member This appeal is filed by the Assessee, aggrieved by the order of the Learned Commissioner of Income Tax-8, Chennai dated 25.03.2015 in C.No.865/10/CIT-8/15-15 passed under Sec.263 read with section Sec. 250 of the Act. 2. The Assessee has raised 13 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2007 at ₹ 68,20,002/-. 3. The Commissioner of Income Tax erred in holding that assessee had not created the necessary reserve/provision towards bad and doubtful debts before making any deduction u/s.36(1)(viia) of the Act. 4. The Commissioner of Income Tax ought to have appreciated that assessee made provision for bad & doubtful debts during the previous year 2006-07 of ₹ 18,62,76,751/- under a different nomenclature which will not disentitle the assessee from claiming deduction .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ome Tax ought to have appreciated that the provision for overdue interest represents interest on doubtful category advances which was unrealized but taken into account on accrual basis. Hence provision was made for overdue interest doubtful of recovery and hence is a provision for bad and doubtful debt. 7. The Commissioner of Income Tax ought to have appreciated that reserve for NPA represents provision for bad and doubtful debts where he installments and interest remain unpaid/serviced for more .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for the earlier ÀY 2008-09 in spite of the same being quashed by the Hon'ble Tribunal vide order in ITA No.914/Mds/2013 dt 17.07.2013. 10. The Commissioner of Income Tax erred in not following the order of the Tribunal for A Y 2008-09 in ITA No.914/Mds/2013 dt 17.07.2013 wherein it has been held that creation of reserve for NPA is same as creating provision towards bad and doubtful debts and assessee being a Non-Scheduled Bank is entitled to claim benefit of provisions of sec 36(1) (v .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ooks of accounts, details produced and revised return of income wherein assessee has restricted the deduction u/s.36(1)(viia) to 10% of average advances granted by its Rural branches as against gross advances. Hence the assessment order cannot be termed as erroneous and prejudicial to the interest of revenue. 13. Appellant craves leave to adduce additional grounds at the time of hearing. 3. The brief facts of the case are that the assessee is a cooperative bank, engaged in the business of baking .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as completed on 22.06.2012 wherein the ld. Assessing Officer allowed the deduction u/s.36(1)(viia) of the Act to the extent of ₹ 14,47,40,656/-. Subsequently, the Ld.CIT had issued show-cause notice U/s.263 of the Act on 13.01.2015, the relevant portion of the same is extracted herein below for reference:- For the assessment year 2007-08, you have filed your return of income on 28/10/2007 admitting total loss of ₹ 17,81,64,980/-.and subsequently filed revised return of loss on 24/08/ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to the extent of eligible amount of ₹ 68,20,002/- This Indicates lack of application of mind by the Assessing Officer on this issue. 3. In the circumstances, the order passed dated 22/06/2012 is held to be erroneous and prejudicial to revenue, and therefore it is proposed to rectify the same u/s 263 of the Income-tax Act, 1961 as the facts and circumstances of the case deem it fit. Hence, your are hereby given an opportunity to file your written submission/objections or personally appear b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f the Ld. Assessing Officer was erroneous and prejudicial to the interest of the Revenue for the following reasons:- "In the assessment order deduction u/s. 36(1)(viia) was allowed to the extent of ₹ 14,47,40,656/- as against restricting it to the extent of eligible amount of reserve for Non-performing assets or provisions for bad & doubtful debts shown in the Balance Sheet as on 31.03.2007 at ₹ 68,20,002." 4. At the outset, the Ld. AR submitted before us that the Tribu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unal. The Ld. DR could not controvert to the submissions of the Ld. AR. 5. We have heard the rival submissions and carefully perused the material on record. Before us, the claim of the Ld. A.R. was that the provisions made as per Section-36(1)(viia) has to be allowed though debited under different name such as "Reserved for NPA account" instead of debiting under the Head "Provisions towards bad & doubtful debts". It was further submitted by the Ld. A.R. that the nomenclat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e. Ld. D.R also magnanimously agreed for such verification. We find merit in the contention of the Ld. A.R. On the earlier occasion, the Tribunal in the assessee's own case cited supra had accepted the above prayer of the assessee. The relevant portion of the order is reproduced herein below for reference:- "8. Now, the second question which arises for determination before us is whether the assessee has created any reserve/provision for bad and doubtful debts? The AR has contended that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version