TMI Blog2021 (12) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... lassification between rural and other branches of a bank is made based on the population in the place where the concerned branch is located. While the assessee's case that found acceptance with the Tribunal is that place referred to in the above definition clause is the ward of a panchayat or municipality, the Assessing Officer took the view that place contained in the definition clause should mean a revenue village. No doubt, place as such is not defined in the definition clauses and so much so, we have to find out the scope and meaning of place referred to in the section. Standing counsel for the Department produced before us last published Census Report of 2001. Even though the previous Census Report may be the relevant one, we feel the scope of place as referred to in the Census Report produced could be adopted for the purpose of this case - Thus the question is answered in favour of revenue and against the assessee - ITA NO. 1284 OF 2009 - - - Dated:- 16-9-2021 - HONOURABLE MR. JUSTICE S.V. BHATTI HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS Appellant/Appellant: By Advs. Sri. P.K.R. Menon, SR. Counsel, GOI(Taxes) Sri. Jose Joseph, SC, For Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate that the question concerning bad debts falling under Section 36(1)(vii) is covered in favour of the assessee in reported judgment of the Supreme Court in Catholic Syrian Bank v. Commissioner of Income Tax (2012) 343 ITR 270 (SC) and had answered the point in favour of assessee and against the Revenue. We are referring to the decision by the Apex Court with a view to comprehensively advert to the outcome on all the substantial questions raised by the Revenue in the instant appeal. The operative portion in Catholic Syrian Bank Ltd judgment reads thus: Firstly, the Full Bench ignored the significant expression appearing in both the proviso to Section 36(1) (vii) clause (v) of Section 36(2) i.e ., 'assessee to which clause (viia) sub-section(1) applies'. In other words, if the case of the assessee does not fall under Section 36(1)(viia) proviso/limitation would not come into play. xxx xxxx xxxxx Consequently, while answering the question in favour of the assessee, we allow the appeals of the assessee and dismiss the appeals preferred by the revenue. Further, we direct that all matters be remanded to the Assessment Officer for computation in accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation of profit or loss in respect of the unsecured securities. Senior counsel appearing for the assessee produced the RB guidelines before us wherein the RBI has suggested banks to value unquoted Central Government securities on the basis of the prices/YTM rates put out by the PDAI/FIMMDA at periodical intervals. YTM is the yield to maturity method adopted for valuation of securities. It is seen that the Tribunal accepted the assessee's valuation which is based on the RBl guidelines. RBI being the apex body issuing guidelines to the banks for valuation of unquoted Government securities, we feel it is the rational basis which the assessee was bound to adopt. The Assessing Officer also has not come out with any formula for computation of market value of unquoted securities and he has no case that the RBI guidelines for valuation is irrational. So much so, we feel the Tribunal rightly upheld the assessee's claim for valuation of unquoted Government securities based on the RBI guidelines. We, therefore, dismiss the Revenue's appeal on this issue. 5. We have heard the learned counsel on Additional Question No.4 after the judgment dated 13.7.2021 has been recalled. A s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iteral meaning of rural branch which necessarily excludes urban areas. If the assessee's case accepted by the Tribunal that population in a ward has to be reckoned for deciding as to whether the location of a panchayat is in a rural area or not is accepted, then probably even in municipal areas there may be wards with less than 10000 population thereby answering the branch located in such municipal area also as a rural branch. Going by the ordinary meaning of rural branch, we feel only branches of the bank located in rural areas are covered. When the Legislature adopts population as the basis for classification of rural branches, that too, with reference to the last Census Report, we feel the basic unit as available for identification of rural area in the Census Report can be legitimately adopted. So much so, we feel the above meaning of rural area contained in the Census Report wherein revenue village is treated as a unit of rural area, can be rightly adopted. So much so, place referred to in the above definition clause for the purpose of identifying the branch of a bank as a rural branch with reference to its location is the revenue village. Therefore, in our view, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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