TMI Blog2020 (5) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... lines prescribes the provision on standard assets from the year ended March 31, 2000 directing the banks to make a general provision of a minimum of 0.25% on standard assets. Decision rendered by the CIT is unjustifiable for the reason that assessee is bound by the guidelines issued by the Reserve Bank of India. Any contrary view taken by the Income Tax Authorities would disentitle the assessee from claiming deduction u/s 36(1)(viia). Assessee is eligible for deduction and we thus, direct the AO. - Decided in favour of assessee. - ITA No.873/PUN/2017 (Assessment Year : 2013-14) - - - Dated:- 7-1-2020 - SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER Assessee by: Shri Sanket Joshi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire deduction claimed by the assessee bank computed as per the formula prescribed u/s 36(1)(viia) should have been allowed to the assessee. Without prejudice to ground no.2, it is submitted as under 3] The learned CIT(A) erred in holding that the provision made against standard assets as per the RBI Guidelines cannot be considered as provision for bad and doubtful debts for the purposes of claiming deduction u/s 36(1)(viia) and hence, the deduction u/s 36(1)(viia) is to be restricted only to the extent of provision for bad and doubtful debts made in respect of advances classified as NPAs. 4] The learned CIT(A) failed to appreciate that the provision against standard assets was made by the assessee bank in view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore even the provision made against standard assets as per the mandate of RBI should be considered as part and parcel of the provision for bad and doubtful debts for the purposes of computing deduction u/s 36(1)(viia) of the Act. 7] The learned CIT(A) erred in confirming the disallowance u/s 36(1)(vii) of ₹ 3,25,476/- without appreciating that the said disallowance was not warranted on facts and in law. 3. Before us at the outset, ld. AR submitted that the assessee does not wish to press ground Nos.2 and 7 and further the other grounds raised are on the issue of deduction u/s 36(1)(viia) of the Act. In view of the aforesaid submissions of ld. AR, ground Nos.2 and 7 are dismissed as not pressed. 4. During the course of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submitted that on identical facts, the Hon ble High Court of Karnataka in the case of Bellad Bagewadi Urban Souhard Sahakari Bank Niyamit Vs. CIT Anr. in I.T.A. No.100168/2015, judgment dated 29.01.2018 has held that even the provision made by Co-operating Banks against the standard assets as per the RBI Master Circular have to be considered as provision for bad and doubtful debts for the purpose of computing the deduction u/s 36(1)(viia) of the Act. In support of his aforesaid contention, he also placed on record a copy of the aforesaid decision. He thus, submitted that the assessee be granted deduction. 6. The ld. DR on the other hand supported the orders of Assessing Officer and CIT(A). 7. We have heard the rival submissions an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is bound by the guidelines issued by the Reserve Bank of India. Any contrary view taken by the Income Tax Authorities would disentitle the assessee from claiming deduction under Section 36(1)(viia) of the Act. In view of non-furnishing of the material documents in support of the claim before the Tribunal, it was left with no other option except to confirm the order of the Commissioner of Income Tax (Appeals). 9. Before us, the Revenue has not placed any contrary binding decision in its support nor has placed any material on record to demonstrate that the decision of Hon ble High Court of Karnataka in the case of Bellad Bagewadi Urban Souhard Sahakari Bank Niyamit Vs. CIT Anr. (supra) has been set aside / overruled / stayed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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