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2019 (3) TMI 1654

..... )(viia) in respect of provision for bad and doubtful debt. The said provision has specified the limit of deduction which could be allowed to the eligible assessee. Under the provisions, the deduction in respect of any provision for bad and doubtful debts made by the cooperative bank, of an amount not exceeding seven and one half percentile (7½%) of the total income and an amount not exceeding 10% of the aggregate average advances made by the rural branches of such bank computed in the prescribed manner. Issue as decided in own case in the favour of assessee as relying on THE LITTLE KANCHEEPURAM CO OPERATIVE URBAN BANK LTD. [2013 (3) TMI 787 - ITAT CHENNAI] - ITA No.743/Del/2016 - 28-3-2019 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND S .....

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..... section 143(2) of the Income Tax Act, 1961 (in short the Act ) was issued and complied with. The assessment under section 143(3) of the Act was completed on 31/03/2013 after making disallowance of deduction claimed under section 36(1)(viia) of the Act to the extent of ₹ 68,91,000/- and other disallowances. On further appeal, the Ld. CIT(A) dismissed the appeal of the assessee rejecting the grounds raised. Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above only on the issue of disallowance of deduction under section 36(1)(viia) of the Act to the extent of ₹ 68,91,000/- . 3. We have heard both the parties on the issue in dispute. In the case, the assessee is a rural cooperative bank an .....

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..... es made by the rural branches of the scheduled bank. Explanation : In this rule, rural branch and scheduled bank shall have the meanings assigned to them in the Explanation to clause (viia) of sub-section (1) of section 36.] 4. In view of the Rules, the assessee computed the amount of provision as under: (Amount in thousands) S.No. Particulars Balance O/s Amount of Provision 1. Standard Advances 14751401 6891 2. Sub Standard Adv. 110097 6572 3. Doubtful Adv. 58065 11664 4. Loss Assets 10556 1647 14930119 26774 5. According to the Assessing Officer, the provision of standard advances of ₹ 68,91,000/- was not eligible for deduction as the said asset was not in the nature of bad and doubtful date as the assessee was receiving regular int .....

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..... iso to section 36(l)(viia) as the proviso deals with further deduction for provisions on bad and doubtful debts. Hence, we find that the orders of the authorities below cannot be sustained and the addition of ₹ 84,70,000/- is directed to be deleted. 7. As the issue in dispute involved in the year under consideration is identical to the issue in the appeal of the assessee for assessment year 2011-12, thus, respectfully following the decision of the Tribunal in ITA No. 1561/Del/2015 for assessment year 2011-12, the addition in dispute in the year under consideration is also deleted. The grounds of appeal of the assessee are allowed. 8. In result, the appeal of the assessee is allowed. Order pronounced in the open court on 28th March, 20 .....

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