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TMI Blog2020 (11) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... tains to the Assessment year 2007-08. The appeal was admitted by a bench of this Court vide order dated 10.08.2015 on the following substantial questions of law: (i) Whether on the facts and circumstances of the case, the Tribunal is right in law in deleting the interest accrued on non performing assets from the computation of taxable income for the assessment year under consideration despite the assessee maintaining mercantile system of accounting. (ii) Whether on the facts and circumstances of the case, the Tribunal is right in law in holding that the provision for non performing assets made by assessee is proper as it is done as per RBI guidelines without appreciating that RBI guidelines cannot override the mandatory provision of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer has considered the same to be 9%, which is on the higher side. It was further held that the Assessing Officer has to correctly work out the opening and closing balances after giving reasonable opportunity to the assessee and after verification of books of accounts and work out the correct income accruing from interest and to decide the issue in the light of the decision of the Supreme Court in the case of UCO Bank Vs. CIT, 237 ITR 889. The Commissioner of Income Tax (Appeals) allowed the provision made for non performing assets to the extent of Rs. 1,50,00,000/- by following the decision of the Supreme Court in UCO Bank supra and with regard to addition made under Section 40(a)(ia) of the Act of Rs. 17,38,222/-, the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f against the provision made under Section 36(1)(viia) of the Act. It is further submitted that if actual write off is in excess of provision made under Section 36(1)(viia) of the Act, then as per proviso to Section 36(1)(vii), actual write off in excess of provision of Section 36(1)(viia) would alone be allowed under Section 36(1)(vii). It is also argued that allowing the provision under Section 36(1)(viia) of the Act and on actual write off under Section 36(1)(vii) of the Act would amount to double deduction and the same is in contravention of the law laid down by the Supreme Court in CATHOLIC SYRIAN BANK LTD. VS. CIT (SC) 343 ITR 270. It is further submitted that the principle laid down in the aforesaid decision has not been taken note o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unity to explain why non performing asset provision has not added back to the total income, in the income computation sheet and again deduction 7.5% under Section 36(1)(viia) has not been claimed. The assessee thereupon submitted that a provision has been made as per the norms of the Reserve Bank of India and the details of non performing assets as well as provisions made were provided. The Commissioner of Income Tax (Appeals) held that deduction for provision for bad and doubtful debt is allowed under Section 36(1)(viia) of the Act in the light of the decision of the Supreme Court in UCO Bank Ltd. supra. The tribunal in its order dated 10.10.2014 inter alia has held that though the assessee has used the nomenclature as provision for non pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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