TMI Blog2020 (2) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... nterpretation stated by LORD CAIRNS that if the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of law the case might otherwise appear to be. It is equally well settled legal proposition that in a taxing act once has to look merely as what is said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used. [SEE: COMMISSIONER OF INCOME TAX, MADRAS VS. KASTURI AND SONS LTD.- 1999 (3) TMI 6 - SUPREME COURT and MAHIM PATRAM (P) LTD. VS. UNION OF INDIA - 2007 (2) TMI 73 - SUPREME COURT ] [See: PRINCIPLES OF STATUTORY INTERPRETATION, JUSTICE G.P. SINGH, 14TH EDITION, PAGE 879]. Therefore, the question of going into intention or object behind the provision viz., Section 36(1) (viia) of the Act does not arise. The submission that even in the absence of any provision, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the amount which exceeds the credit balance of the provisions made under section 36(1)(viia) of the I.T. Act? . 2) Whether on the facts and in the circumstances of the case the tribunal s order can be considered as perverse in nature since tribunal has allowed the assessee s appeal by over-looking the provisions of I.T. Act? 3) Whether on the facts and in the circumstances of the case the tribunal was right in law in allowing the interest on zero coupon bonds even when interest on zero coupon bonds is not an exempt income under the provisions of I.T. Act and assessee had shown the interest income in the books of account? . 2. For the facility of reference, facts from ITA No. 258/2011 are being referred to The assessee is a Public Limited Company engaged in banking business. The assessee filed return of income on 24.11.2003 along with audit report under Section 44AB of the Act, declaring income of ₹ 293,25,57,628/- for Assessment year 2003-04. The Return was processed under Section 143(1) on 05.04.2004 and an order of refund of ₹ 82,69,52,235/- was determined and an order of refund of ₹ 82.50/-Crores was issued. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plaining the provisions in Finance Bill, 1979 and the Circular dated 30.06.1982 it is contended that deduction under Section 36(1)(viia) of the Act is made in respect of provisions made by them for bad and doubtful debts relating to advances made by their rural branches. It is further contended that in order to claim deduction under Section 36(1)(vii)(a) of the Act, a provision for bad and doubtful debt should be made in the accounts of the assessee. In this connection, reliance has been placed on Division Bench decision of this COURT IN COMMISSIONER OF INCOME TAX VS. M/S. VIJAY BANK , IN ITA NO.1066/2008 DATED 21.10.2014. 5. On the other hand, learned counsel for the assessee has placed reliance on decision of Supreme Court in CATHOLIC SYRIAN BANK LTD VS. COMMISSIONER OF INCOME TAX , (2012) 18 TAXMANN.COM 282 (SC) and has submitted that Section 36(1)(viia) was introduced by Finance Act, 1979 to promote rural banks and to assist Scheduled Commercial Banks in making adequate provision from their current profits to provide for risk in relation to their rural advances and the deductions were to be limited as specified in Section. It is further argued that Section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the relevant assessment years commencing on or after the 1st day of April, 2003 and ending before the 1st day of April, 2005, the provisions of the first proviso shall have effect as if for the words five per cent , the words ten per cent had been substituted: Provided also that a scheduled bank or a non-scheduled bank referred to in this sub-clause shall, at its option, be allowed a further deduction in excess of the limits specified in the foregoing provisions, for an amount not exceeding the income derived from redemption of securities in accordance with a scheme framed by the Central Government: Provided also that no deduction shall be allowed under the third proviso unless such income has been disclosed in the return of income under the head Profits and gains of business or profession . Explanation . For the purposes of this sub-clause, relevant assessment years means the five consecutive assessment years commencing on or after the 1st day of April, 2000 and ending before the 1st day of April, 2005; (b) a bank, being a bank incorporated by or under the laws of a country outside India, an amount not exceeding five per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section mentions the maximum amount for which such a provision should be made. If a provision is made in excess of the limits prescribed under the Section, the assessee would not be entitled to deduction of the excess amount. Once a provision is made and the amount of deduction is within the limit prescribed under the Act, the assessee would be entitled to deduction of the amount for which provision is made in the books of accounts. 9. The language employed in Section 36(1)(viia) of the Act is clear and unambiguous. It is well established Rule of interpretation stated by LORD CAIRNS that if the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of law the case might otherwise appear to be. It is equally well settled legal proposition that in a taxing act once has to look merely as what is said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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