TMI Blog2015 (4) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... ive society to company is without any basis. Hence, we restore the status of the assessee as cooperative society and this issue of assessee’s appeal is allowed. Validity of rectification order passed by AO - disallowing the provisions for overdue interest and provision for standard assets invoking the provisions of section 36(1)(viia) - Held that:- Assessee is engaged in the business of banking and regulated by the Banking Regulation Act, 1949. The assessee is maintaining its Balance Sheet and P & L Account as required by Banking Regulations Act. The assessee statutorily required to prepare its Balance Sheet and P&L Account and as per said guidelines NPAs where interest has not been realized in cash as a prudential norm, it is not debiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... These appeals by assessee are arising out of separate orders of CIT(A), Jalpaiguri in Appeal No.125/JAL/CIT(A)/JAL/11-12 dated 21.05.2012 and Appeal No.10/JAL/CI T(A)/JAL/12-13 dated 30.11.2012. Assessment for AY 2007-08 was framed by ACIT, Circle-2, Jalpaiguri u/s. 147/143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) vide his order dated 28.12.2011 and assessment for AY 2009-10 was framed by JCIT, Range-2, Jalpaiguri, u/s. 143(3) of the Act for Assessment Year 2004- 05 vide his order dated 27.12.2011. 2. First we take up ITA No. 895/K/2012. The first issue in this appeal of assessee is against the order of CIT(A) in upholding the action of AO in changing the status of assessee from Cooperative Society to Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law and on facts of the case by upholding the curtailment of deduction u/s. 36(l)(viia) of the Income Tax Act, 1961 and thereby enhancing the assessment ignoring actual deductions allowed in original assessment order dated 28/12/2011 u/s.143(3)/147 of the Income Tax Act, 1961 without any show cause notice for enhancement of the assessment and as such the impugned order is void and illegal. 3. THAT the Ld. CIT (Appeals)-Jalpaiguri, has erred in law and on facts of the case by upholding that Provision for Overdue Interest of ₹ 61,78,989/- and Provision for Standard Assets of ₹ 5,54,456/- cannot be allowed as the appellant is following mercantile system of accounting without consulting the provisions of the statue i.e. The Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em of accounting, provision for Overdue interest can be allowed only when the same or any part of the same would be bad in subsequent years. Equally, the provision for standard asset is also a simple provision which is not allowable. Aggrieved, now assessee is in appeal before us. 6. We find that the assessee is engaged in the business of banking and regulated by the Banking Regulation Act, 1949. The assessee is maintaining its Balance Sheet and P L Account as required by Banking Regulations Act. The assessee statutorily required to prepare its Balance Sheet and P L Account and as per said guidelines NPAs where interest has not been realized in cash as a prudential norm, it is not debiting the said account by interest accrued in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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