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TMI Blog2023 (10) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, we have taken up the said appeal for adjudication. The grounds raised by the assessee are reproduced below: ITA No. 1438/M/2023 for AY 2009-10 grounds of appeal 1. On the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the order of AO restricting the deduction u/s 36(1)(viia) to provision made during the year contrary to the directions of Hon'ble ITAT. 1.1 Without prejudice to the above, on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the order of AO excluding provision made fart in respect of Standard advances and restructured debts while considering the provision made during the year by overlooking the binding decision of hon'ble ITAT Mumbai in the case of State Bank of India (ITA 3644/Mum/2016) 2. On the facts and in the circumstances of the case, the Ld CIT(A) erred in remitting back the issue of charging of interest u/s 234D without deciding on appellants ground that no interest u/s 234D can be charged where there is no excess refund granted u/s 143(1). Your appellant craves leave to add, to amend, and/or vary the grounds of appeal before or at the time of hearing. 3. On the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of claim of provision for bad and doubtful debt was again racked up by the Assessing Officer in reassessment order dated 18/3/2015, wherein he held that standard asset and restructured debt are not part of non-performing assets (NPA) and therefore not eligible for deduction u/s 36(1)(viia) of the Act. On further appeal, the Ld. CIT(A) restricted the claim of deduction under section 36(1)(viia) of the Act to the extent of provision made during the year for bad and doubtful debt amounting to Rs. 555,29,90,155/-. On further appeal, though the Tribunal vide order dated 12/07/2019 in ITA No. 1803/Mum/2018 , upheld the validity of the reassessment, but on merit, the Tribunal restored the matter back to the file of the Assessing Officer observing as under: 41. Coming to the merits i.e., the deduction u/s. 36(1)(viia) of the Act, we observe that since the decision as to whether the claim for deduction u/s. 36(1)(viia) has to be allowed on the provision made in the Books of Accounts or as per the statute provided in the section itself in the original assessment proceedings has bearing on the issue of allowance u/s. 36(1)(viia) in the reopened assessment, the issue thus in a way became con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision on restructured debts" which do not qualify for bad and doubtful debts. 5.1.8 The issue of providing provisions on standard assets and provision on restructured debts was not discussed in the decision of Hon'ble ITAT, Ahmedabad Bench in the case of DCIT Vs. Sarvodaya Sahakari Bank Ltd., in ITA No.779 (Ahd) of 2011. The Assessing Officer has restricted the provision for bad and doubtful debts without considering provision on standard assets and restructured debts as they do not form part of NPAs. The decisions of Hon'ble ITAT Ahmedabad in Bharuch Dist. Central Co-op. Bank Ltd. VS ITO, Ward-1, Bharuch reported in [2013] 36 taxmann.com 517 and Hon'ble ITAT Bench Vishakapatnam in ACIT Circle- 2 (1), Guntur vs. Chaitanya Godavari Grameena Bank reported in [2018] 93 taxmann.com 400 has held that standard assets cannot be treated as bad and doubtful debts for the purpose of claiming allowance u/s 36(1)(viia) of the I.T Act. 5.1.9 Considering the above, this appellate authority is of the view that restriction of provision of doubtful debts to Rs. 555,29,90,155/- as provided in the books for non- performing assets does not require any interference and the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities while considering the issue afresh in the remanded proceedings restricted the deduction on the ground that the amount of provision made towards bad and doubtful debts in the books of accounts for the purpose of section 36(1)(viia) should exclude the provision made towards standard assets. The ld DR while relying on the order of the CIT(A) submitted that the provision made on standard assets cannot be considered as provision made for bad and doubtful debts since the assessee itself has classified the asset as good and recoverable i.e. standard asset. The ld DR also drew our attention to the decision relied on by the CIT(A) in the case of ACIT vs Chaitanya Godavari Grameena Bank (2018) 93 Taxmann.com 400 (Vishakapatnam-Trib) where the issue of provision made towards bad and doubtful debts against various class of assets is discussed in detail to hold that the provision made against standard assets cannot be considered as provision made towards bad and doubtful assets for the purpose of deduction u/s.36(1)(viia). Be that as may be, in the given case the Hon'ble Tribunal has given a direction to the Assessing Officer to consider the issue afresh in the light of the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim of deduction of Rs. 820.28 crores u/s 36(1)(viia) of the Act, therefore no disallowance was required to be made and accordingly deleted the addition. Since, the Tribunal (supra) has already allowed claim of deduction of the assessee u/s 36(1)(viia) of the Act, accordingly, following the finding of the Tribunal (supra) , we direct the Assessing Officer to allow the claim of the deduction under section 36(1)(viia) to the extent of provision for bad and doubtful debt available at the year end as held by the Tribunal in ITA No. 923/Mum/2023. 4.4 Before us, the learned counsel of the assessee further submitted that if the claim of deduction under section 36(1)(viia) of the Act is allowed to the extent of provision for bad and doubtful debt available in the books of account, the assessee shall not press for inclusion of standard asset and restructured debt as part of non-performing assets (NPA). We note the assessment of the year under consideration was reopened for the reason that the assessee claimed inclusion of standard asset and restructured debt as NPA for working out provision for bad and doubtful debt made in the year under consideration. Since now the assessee has forg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case, the Ld CIT(A) erred in remitting back the issue of charging of interest u/s 234D without deciding on appellants ground that no interest u/s 234D can be charged where there is no excess refund granted u/s 143(1). 3. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the order of AO of not granting interest for the month of payment/refund of tax by considering Rule 119A(a) instead of 119(b) which is applicable to the instant case. 6.1 The ground no. 1 is in relation to claim u/s 36(1)(viia) of the Act. This ground is arising from the order of assessing officer giving effect to the order of ld CIT(A) dated 26/12/2017 passed in relation to reassessment proceedings. We have already noted in ITA No. 1438/Mum/2023 , that the ld CIT(A) in appeal order dated 26/12/2017 against the reassessment order, rejected the claim for including standard assets and restricted debt as part of NPA and restricted the claim of deduction u/s 36(1)(viia) of the Act to the extent of Rs. 555,29,90,155/-. The Assessing officer in order date 28/03/2019, where he has given effect to order of ld CIT(A) dated 26/12/2017, taken amount of deduction at R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee submitted that in the case of the assessee interest u/s 244A of the Act has been computed on the monthly basis rather than annual basis and therefore provision of section 119A(b) are applicable. 8.1 We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. In the case the assessee before the Ld. CIT(A) submitted that the Assessing Officer has granted interest under section 244A of the Act amounting to Rs. 86,18,85,655/- as against interest of Rs. 88,17,94,596/-computed by the assessee. According to the assessee, the difference had arisen on account of interest not being granted for the months of payment/collection of tax/granting of refund. The learned Counsel submitted that as per rule 119A of the Act, where interest is to be calculated for every month or part of a month, any fraction of months shall be deemed to be a full month and interest shall be granted accordingly and therefore the Assessing Officer should have granted the interest for the month of payment/collection of tax/granting of refund also. The Ld. CIT(A) has reproduced provisions of section 244A and section 119A of the Act, and thereafter hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as @ result of giving effect to an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264, wholly or partly. otherwise than by making a fresh assessment or reassessment, the assessee shall be entitled Sauce amount of refund calculated ar the alb of tired per cont per annum. for the poros to receive, in addition to the interest payable under sub- section (1), an additional interest on beginning from the date following the date of expiry of the time allowed under sub- section (5) of section 153 to the date on which the refund is granted. Rule 119A lavs down the procedure for calculation of interest payable to the assessee as under: Procedure to be followed in calculating interest [119A. In calculating the interest payable by the assessee or the interest payable by the Central Government to the assessee under any provision of the Act,- (a) where interest is to be calculated on annual basis, the period for which such interest is to be calculated shall be rounded off to a whole month or months and for this purpose any fraction of a month shall be ignored; and the period so rounded off shall be deemed to be the period in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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