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TMI Blog2020 (2) TMI 1558X X X X Extracts X X X X X X X X Extracts X X X X ..... t assessee is a society registered under the U.P. Co-Operative Society Act and derives income from banking. It filed its return of income on 26.09.2013 declaring income of Rs. 4,18,13,620/-. The assessment u/s 143(3) of the Act was passed by the Assessing Officer by making a disallowance of Rs. 3,55,92,239/- u/s 36(1)(viia) of the Act. Further disallowance of Rs. 56,64,630/- was also made on account of non-deduction of tax at source on interest paid on fixed deposit receipts. The disallowance was made u/s 40(a)(ia) of the Act. The total income of the assessee was assessed at Rs. 8,30,70,490/-. The assessee preferred appeal before the learned CIT (Appeals) who dismissed the same and, therefore, the assessee is in appeal before us. 3. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above provision that same has become bad. It was, therefore, submitted that the claim of deduction is allowable as laid down in Rule 6ABA of the Income Tax Rules. The learned Assessing Officer noted that provisions of Section 36(1)(viia) is a restrictive clause limiting the deduction to the extent of 10% of advances and 7.5% of income. It was further held that the passing of entries are required to affect the profit and loss account. He further relied on the decision of the Hon'ble Supreme Court in the case of Catholic Syrian Bank Ltd. Thus the Assessing Officer disallowed the above deduction stating that assessee does not have right to claim the deduction under Section 36(1)(viia) of the Act by deducting the required sum from the tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also did not consider the fact that whether such a revision of accounts is valid or not. In view of this we set aside the whole issue as per ground No. 1 of the appeal back to the file of the Assessing Officer to examine whether the assessee has made the provision correctly or not. The assessee is directed to produce such accounts along with all its submissions before the Assessing Officer who is directed to examine the claim of the assessee afresh and decide the issue in accordance with law. 5.1 In the result, ground No. 1 of the appeal is allowed, with above directions. \ 6. The second ground of appeal is that the Assessing Officer has made an addition of Rs. 56,64,630/- on interest paid on FDRs. In the statutory audit report it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that assessee did file Form No. 15G and 15H before the Assessing Officer though the same might not have been filed before the learned Commissioner of Income Tax, Muzaffar Nagar or might have been filed late. The assessee has also stated that most of the fixed depositors are agriculturists and are having income below the taxable limit. Merely because the assessee did not file the requisite form before the learned CIT, Muzaffar Nagar, in time, it cannot be said that assessee has failed to deduct tax at source on such interest payment. Furthermore without examining those Form No. 15G and 15H the Assessing Officer also could not have held that the assessee should have deducted tax at source on interest paid to such persons who have furnished Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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