TMI Blog2019 (8) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... dered opinion that the Assessing Officer has rightly reopened the assessment. Deduction U/s.36(1)(viia) - assessee submitted that the very same issue was decided against the assessee in the assessee s own case by this Tribunal for the assessment year 2011-12 [ 2016 (4) TMI 753 - ITAT CHENNAI] Deduction U/s 36(1)(vii) - In view of the Judgments of the Apex Court in Vijaya Bank [ 2010 (4) TMI 46 - SUPREME COURT] and Catholic Syrian Bank Ltd [ 2012 (2) TMI 262 - SUPREME COURT] this Tribunal is of the considered opinion that the bad debts in respect of non-rural branches has to be allowed as bad debts written off U/s.36(1)(vii) of the Act. In view of the above, we are unable to uphold the order of the lower authorities. Accordingly the orders of both the authorities below are set aside and the addition made U/s.36(1)(vii) of the Act is deleted. Deduction U/s.36(1)(viia) based on advance outstanding and not on incremental advances - HELD THAT:- Admittedly, the CIT(A) followed the order of this Tribunal in the assessee s own case for the assessment year 2010-11. Rule 6ABA of the Income Tax Rules clearly shows that any advance that has been made and outstanding at the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive also. According to the Ld.DR this issue was decided in favour of the assessee for the assessment year 2011-12 by this Tribunal in [ 2017 (4) TMI 1424 - ITAT CHENNAI] . In view of the above this Tribunal did not find any reason to interfere with the order of the lower authority and the same is confirmed. Depreciation on UPS - depreciation at the rate of 60%- HELD THAT:- This Tribunal for the assessment year 2013-14 found that the assessee is eligible for depreciation at the rate of 60% on the UPS. In this case, the Assessing Officer allowed only 15% of depreciation. Therefore the CIT(A) has rightly allowed depreciation at the rate of 60%. In view of the above, this Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly the same is confirmed. Disallowance made u/s.40(a)(ia) on account of short deduction - HELD THAT:- No doubt, the Kolkata High Court in the case of S.K. Tekriwal [ 2012 (12) TMI 873 - CALCUTTA HIGH COURT] found that in case of short deduction there cannot be any disallowance U/s.40(a)(ia) of the Act. However as rightly submitted by the Ld.DR, there are other High Court Judgments which is in favour of the Revenue also. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. Representative for the assessee submitted that the Assessing Officer reopened the assessment. In the P L account the assessee had made a provision for bad and doubtful debts to the extent of ₹ 192,02,99,716/-. In the assessment proceeding U/s.143(3) of the Act, the assessee was allowed deduction U/s.36(1)(viia) of the Income-Tax Act, 1961 (in short the Act ) to the extent of ₹ 125,43,91,016/- restricting the provision for non-performance asset debited to the P L account. According to the Ld.AR, the Assessing Officer disallowed bad debts written off relating to rural debt amounting to ₹ 37.28 crore and allowed non-rural bad debts to the extent of ₹ 304.36 crore. According to the Ld.AR, the Assessing Officer reopened the assessment in order to completely deny bad debts written off relating to non-rural debts. According to the Ld.AR, the bad debt written off relating to non-rural debts is not affected by proviso to Section 36(1)(vii) of the Act. Therefore the reopening is not justified. 2.1.2 On the contrary, Shri Clement Ramesh Kumar, the Ld. Departmental Representative submitted that the assessment of the assessee was re-opened on iden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Vijaya Bank and Catholic Syrian Bank Ltd supra, this Tribunal is of the considered opinion that the bad debts in respect of non-rural branches has to be allowed as bad debts written off U/s.36(1)(vii) of the Act. In view of the above, we are unable to uphold the order of the lower authorities. Accordingly the orders of both the authorities below are set aside and the addition made U/s.36(1)(vii) of the Act is deleted. 3. Now coming to the Department appeal for the assessment year 2008-09 in ITA No.1894 of 2017. 3.1 The only issue arises for consideration is deduction U/s.36(1)(viia) of the Act based on advance outstanding and not on incremental advances. 3.1.2 Shri Clement Ramesh Kumar, the Ld. Departmental Representative submitted that for deduction U/s.36(1)(viia) of the Act, the Assessing Officer is expected to calculate the deduction based on incremental advance for each month and not on the outstanding advance on the last day of the relevant month. However the CIT(A) by following the order of this Tribunal in the assessee s own case for the assessment year 2010-11 in ITA No.2030/Mds/2013 dated 26.09.2014 allowed the claim o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the Apex Court in the case of Vijaya Bank 323 ITR 166 and in the case of Catholic Syrian Bank Ltd., 343 ITR 270 decided the issue in favour of the assessee. This Tribunal is of the considered opinion the Judgment of the Apex Court is binding on all authorities including this Tribunal. Therefore this Tribunal is unable to uphold the order of the lower authorities. Accordingly the orders of both the authorities below are set aside and the addition made U/s.36(1)(vii) of the Act is deleted. 5.4 The next issue arises for consideration is charging of floating provision to tax. According to Shri C. Naresh, the Ld. Representative for the assessee provision for bad and doubtful debts is not liable to tax since the provision was already set off against the bad debts written off U/s.36(1)(viia) of the Act. Therefore according to the Ld.AR it amounts to double taxation. The CIT(A) directed the Assessing Officer to decide the issue instead of deciding himself. 5.4.1 On the contrary, Shri Clement Ramesh Kumar, Ld. Departmental Representative submitted that deduction U/s.36(1)(viia) of the Act shall alone be treated as income when floating provision was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Ld. Departmental Representative submitted that the assessee has received ₹ 234.53 crores towards first installment on account of small and marginal farmers Debt Waiver and Debt Relief Scheme 2008. The assessee has not disclosed the same as income. However the assessee discloses the same as advance in Schedule 9 to the Balance Sheet. According to the Ld.DR the assessee was already allowed a portion as deduction U/s.36(1)((viia) of the Act. Therefore the amount received from the Government to the extent of ₹ 234.53 crores, the portion of the amount which was already allowed U/s.36(1)(viia) of the Act was required to be brought for taxation. The CIT(A) directed the Assessing Officer to examine the details that may be furnished by the assessee and pass a speaking order either allowing or disallowing the claim of the assessee. Therefore the assessee may not have any grievance. 5.5.3 We have considered the rival submissions on either side and perused the material available on record. The assessee admittedly received ₹ 234.53 crores towards first installment on account of Agricultural Debt Waiver a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) is confirmed. 7.3 The next issue arises for consideration is provision for bad and doubtful debts with regard to standard assets and provisions for country risk. Shri C. Naresh, the Ld. Representative for the assessee submitted that this issue was also decided against the assessee by this Tribunal in the assessee s own case for the assessment year 2011-12 in ITA No.77/Mds/2014 by order dated 03.04.2017. In view of the above, this Tribunal do not find any reason to interfere with the order of the lower authority and the same is confirmed. 7.4 The next issue arises for consideration is bad debt in respect of rural branches and non-rural branches. This claim is made alternatively by the assessee. Shri C. Naresh, the Ld. Representative for the assessee submitted that the Apex Court in the case of Vijaya Bank 323 ITR 166 and Catholic Syrian Bank Ltd., 343 ITR 270 examined this issue elaborately and allowed the claim of the assessee. This statement of facts was not disputed by the Ld.DR. Therefore respectfully following the Judgment of the Apex Court in the case of Vijaya Bank and Catholic Syrian Bank Ltd., supra the orders of both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 2013-14, this Tribunal do not find any reason to interfere with the order of the lower authority. Accordingly the same is confirmed. 7.9 Now coming to depreciation on UPS, the assessee claimed before the Assessing Officer depreciation at the rate of 80% however the Assessing Officer allowed depreciation at the rate of 60%. The Ld.AR very fairly submitted that this issue was decided against the assessee by this Tribunal for the assessment year 2013-14 in ITA No.776 947/Chny/2018 by order dated 28.02.2018. In view of the order of the Tribunal for the assessment year 2013-14 and the reason stated therein, the order of the CIT(A) is confirmed. 8. In the result the appeal of the assessee for the assessment year 2012-13 is partly allowed. 9. Now coming to the Department s appeal for the assessment year 2012-13 in ITA No.1895 of 2017. 9.1 The first issue arises for consideration is deduction U/s.36(1)(viia) of the Act based on advances outstanding and not on incremental advances. This issue was considered by this Tribunal elaborately for the assessment year 2013-14 and decided in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case, the Assessing Officer allowed only 15% of depreciation. Therefore the CIT(A) has rightly allowed depreciation at the rate of 60%. In view of the above, this Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly the same is confirmed. 9.5 The next issue arises for consideration is disallowance made U/s.40(a)(ia) of the Act on account of short deduction. 9.5.1 Shri C. Naresh, the Ld. Representative for the assessee submitted that the Kolkata High Court in the case of S.K. Tekriwal, GA 2069 of 2012 and Chennai Bench of the Tribunal in the case of Micro Marvel Projects Ltd, 2016-TIOL-249-ITAT-Madras found that in case of short deduction, there cannot be any disallowance. 9.5.2 We heard Shri Clement Ramesh Kumar, the Ld. Departmental Representative also. According to the Ld.DR, there are other decisions which are in favour of the Revenue. In view of the conflicting decisions one in support of the Revenue and another in support of the assessee, the matter may be remitted back to the file of the Assessing Officer. 9.5.3 We have considered the rival submissions on either side and pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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