Shri Mahalaxmi Co.op. Bank Ltd., Kolhapur V. Income-tax Officer, Kolhapur

ITA 1658/PUN/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72304 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 25-09-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 26-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Assessee Lawyers: S N DOSHI
• Keywords: Question of law; Bad and doubtful debts; Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.1658/PN/2011 (ASSESSMENT YEAR: 2008-09) SHRI MAHALAXMI CO-OP BANK LTD. SHRI BHAVAN, 167, B WARD, MANGALWAR PETH, KOLHAPUR 416 012. PAN : AAATS3679R . APPELLANT VS. ITO, WARD 1 (1), KOLHAPUR. . RESPONDENT APPELLANT BY : MR. S. N. DOSHI RESPONDENT BY : MR. A. K. MODI DATE OF HEARING : 25-09-2013 DATE OF PRONOUNCEMENT : 29-10-2013 ORDER PER G. S. PANNU, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATE D 12.10.2011 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 10.12.2010 PAS SED BY THE ASSESSING OFFICER, UNDER SECTION 143(3) OF THE INCOME-TAX ACT , 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, THE FIRST ISSUE RAISED BY THE AS SESSEE IS WITH REGARD TO THE ACTION OF THE LOWER AUTHORITIES IN RESTRICTING THE DEDUCTION ALLOWABLE UNDER SECTION 36(1)(VIIA) OF THE ACT TO THE ACTUAL AMOUNT OF PROVISION MADE IN THE BOOKS OF ACCOUNT FOR BAD AND DOUBTFUL DEBTS OF RS.5 0,00,000/- AS AGAINST THE ASSESSEES CLAIM FOR DEDUCTION OF RS.79,04,346/-. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE I S A CO-OPERATIVE BANK ENGAGED IN THE BUSINESS OF BANKING. IN TERMS OF SEC TION 36(1)(VIIA) OF THE ACT, ASSESSEE IS ENTITLED TO CLAIM AS A DEDUCTION IN RES PECT OF ANY PROVISION FOR BAD ITA NO.1658/PN/2011 A.Y. 2008-09 AND DOUBTFUL DEBTS MADE ON ACCOUNT OF AGGREGATE AVE RAGE ADVANCES MADE BY THE RURAL BRANCHES OF SUCH BANK. THE SECTION PROVID ES THAT SUCH DEDUCTION SHALL NOT EXCEED 7.5% OF THE TOTAL INCOME (COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER VI-A OF THE ACT) AND AN AMOUNT NOT EXCEEDING 10% OF THE AGGREGATE AVERAGE ADVANCES MAD E BY THE RURAL BRANCHES OF SUCH BANK. IN TERMS OF THE SAID SECTION 36(1)(VIIA) OF THE ACT, ASSESSEE BEING A CO-OPERATIVE BANK, WORKED OUT THE DEDUCTION AT RS.1,29,04,346/- AND CLAIMED THE SAME IN THE RETURN OF INCOME. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NO TED THAT AS AGAINST THE CLAIM OF RS.1,29,04,346/- MADE, ASSESSEE HAD MADE A PROVISION FOR BAD AND DOUBTFUL DEBTS OF RS.50,00,000/- ONLY IN THE BOOKS OF ACCOUNT. FOR THE SAID REASON, THE ASSESSING OFFICER RESTRICTED THE DEDUCT ION UNDER SECTION 36(1)(VIIA) OF THE ACT TO THE EXTENT OF THE PROVISI ON FOR BAD AND DOUBTFUL DEBTS MADE IN THE BOOKS OF ACCOUNT I.E. RS.50,00,000/- AN D THE BALANCE OF RS.79,04,346/- WAS DISALLOWED. THE CIT(A) HAS ALSO SUSTAINED THE ACTION OF THE ASSESSING OFFICER, AGAINST WHICH THE ASSESSEE I S IN FURTHER APPEAL BEFORE US. 4. IN THE ABOVE BACKGROUND, THE RIVAL COUNSELS HAVE MADE THEIR SUBMISSIONS. THE SHORT CONTROVERSY IN THE PRESENT C ASE IS TO THE EFFECT AS TO WHETHER MAKING OF A PROVISION EQUAL TO THE AMOUNT C LAIMED AS DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT, IS NECESSARY TO BE MADE IN THE BOOKS OF ACCOUNT OR NOT SO AS TO BE ELIGIBLE FOR THE CLAIM O F DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT. THE STAND OF THE ASSESSEE I S THAT THE DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT DOES NOT DEPEND ON M AKING OF A PROVISION FOR BAD AND DOUBTFUL DEBTS IN THE ACCOUNT BOOKS WHILE T HE STAND OF THE REVENUE IS TO THE CONTRARY I.E. MAKING OF A PROVISION EQUAL TO THE AMOUNT CLAIMED AS DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT IS N ECESSARY TO BE MADE IN THE BOOKS OF ACCOUNT. ITA NO.1658/PN/2011 A.Y. 2008-09 5. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT SECTION NOWHERE REQUIRES THAT THE AMOUNT OF DEDUCTION ALLOW ABLE UNDER SECTION 36(1)(VIIA) OF THE ACT IS DEPENDENT ON MAKING AN EQ UIVALENT DEBIT OF PROVISION FOR BAD AND DOUBTFUL DEBTS IN THE PROFIT AND LOSS A CCOUNT. IT IS POINTED OUT THAT THE DEDUCTION IS QUANTIFIED WITH RESPECT TO CERTAIN PERCENTAGE OF THE AGGREGATE AVERAGE ADVANCES MADE IN THE RURAL BRANCHES OF SUCH BANK AND IS NOTHING TO DO WITH THE AMOUNT OF PROVISION MADE IN THE BOOKS O F ACCOUNT FOR BAD AND DOUBTFUL DEBTS. IN SUPPORT OF THE SAID PROPOSITION REFERENCE HAS BEEN MADE TO THE FOLLOWING DECISIONS OF THE TRIBUNAL :- (I) BANG ALORE BENCH OF THE TRIBUNAL IN THE CASE OF SYNDICATE BANK VS. DCIT, (2001) 78 ITD 103 (BANG); (II) DELHI BENCH OF THE TRIBUNAL IN THE CASE OF RURAL ELECTRIF ICATION CORPN. LTD. VS. ADDL. CIT, (2009) 34 SOT 159 (DEL); (III) DELHI BENCH OF THE TRIBUNAL IN THE CASE OF POWER FINANCE CORPN. LTD. VS. JCIT, (2006) 10 SOT 1 90 (DEL); AND, (IV) COCHIN SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. CATHOLIC SYRIAN BANK LTD., (2004) 88 ITD 185 (COCH)(SB). 6. FURTHER, THE LEARNED COUNSEL POINTED OUT THAT AB SENCE OF ENTRIES IN THE BOOKS OF ACCOUNT IS NO BAR FOR ALLOWANCE OF A DEDUC TION WHICH IS OTHERWISE ALLOWABLE UNDER THE ACT AND FOR THE AFORESAID PROPO SITION HE REFERRED TO THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF KEDARNATH JUTE MFG. CO. LTD. VS. CIT, (1971) 82 ITR 363 (SC). THE LEARN ED COUNSEL FURTHER POINTED OUT THAT THE DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT IS SIMILAR TO THE STANDARD DEDUCTION ALLOWABLE UNDER SECTION 24(1)(A) OF THE ACT RELATING TO REPAIRS ALLOWABLE WHILE COMPUTING INCOME FROM HOUSE PROPERTY. IT WAS POINTED OUT THAT THE DEDUCTION UNDER SECTION 24(1)(A) OF TH E ACT WHILE COMPUTING INCOME FROM HOUSE PROPERTY IS ALLOWABLE ON ACCOUNT OF REPAIRS WHETHER OR NOT SUCH EXPENSES ARE ACTUALLY INCURRED; AND, ON THE SA ME ANALOGY IT IS SOUGHT TO BE MADE OUT THAT THE DEDUCTION UNDER SECTION 36(1)( VIIA) OF THE ACT IS ALLOWABLE IN RESPECT OF THE ADVANCES MADE BY RURAL BRANCHES OF SUCH BANK REGARDLESS OF THE FACT WHETHER ASSESSEE HAS MADE AN ENTRY ON ACCOUNT OF PROVISION FOR BAD AND DOUBTFUL DEBTS. ITA NO.1658/PN/2011 A.Y. 2008-09 7. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE APPEARING FOR THE REVENUE POINTED OUT THAT THE LOWER AUTHORIT IES WERE JUSTIFIED IN RESTRICTING THE DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT TO THE ACTUAL AMOUNT OF PROVISION FOR BAD AND DOUBTFUL DEBTS MADE IN THE BOOKS OF ACCOUNT BY RELYING UPON THE JUDGEMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF STATE BANK OF PATIALA VS. CIT, (2005) 2 72 ITR 54 (P&H). THE LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER REFERRE D TO THE CBDT CIRCULAR NO. 17 DATED 26.11.2008, RELIED UPON BY THE LOWER A UTHORITIES IN TERMS OF WHICH THE CBDT HAS CLARIFIED THAT THE DEDUCTION UND ER SECTION 36(1)(VIIA) OF THE ACT FOR PROVISION OF BAD AND DOUBTFUL DEBTS WAS TO BE RESTRICTED TO AMOUNT OF SUCH PROVISION ACTUALLY CREDITED IN THE BOOKS OF ACCOUNT IN THE RELEVANT YEAR OR THE AMOUNT CALCULATED AS PER SECTION 36(1)(VIIA) OF THE ACT, WHICHEVER IS LOWER. 8. IN REPLY, THE LEARNED COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE CONTENTS OF THE CBDT CIRCULAR DATED 26.11.2008 (SUP RA) REFLECT AN INTERPRETATION WHICH IS NOT AS PER THE PROVISIONS O F SECTION 36(1)(VIIA) OF THE ACT. ACCORDING TO THE LEARNED COUNSEL THE CONTENTS OF THE CBDT CIRCULAR DATED 26.11.2008 (SUPRA) CANNOT OVERRIDE AND DETRACT OF T HE PROVISIONS OF SECTION 36(1)(VIIA) OF THE ACT AND IN ANY CASE ACCORDING TO HIM THE CIRCULAR OF THE CBDT DOES NOT BIND THE TRIBUNAL OR THE COURTS. APAR T FROM THE AFORESAID, THE LEARNED COUNSEL REFERRED TO THE DECISION OF THE PUN E BENCH OF THE TRIBUNAL IN THE CASE OF JAYSINGPUR UDGAON SAHAKARI BANK LTD. VI DE ITA NOS. 45&46/PN/2012 DATED 05.08.2013 WHEREIN ON A SIMILAR ISSUE THE TRIBUNAL HAD SET-ASIDE THE MATTER BACK TO THE FILE OF THE ASSESS ING OFFICER IN THE LIGHT OF THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE CATHOLIC SYRIAN BANK LTD. VS. CIT, 343 ITR 270 (SC). 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. WE HAVE ALSO ANXIOUSLY PERUSED THE AUTHORITIES CITED AT BAR IN O RDER TO DETERMINE THE CONTROVERSY ON HAND. THE RELEVANT PORTION OF SECTIO N 36(1)(VIIA) OF THE ACT, AS ITA NO.1658/PN/2011 A.Y. 2008-09 APPLICABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERAT ION I.E. A.Y. 2008-09 READS AS UNDER : - [(VIIA) [IN RESPECT OF ANY PROVISION FOR BAD AND DOUBTFUL DEBTS MADE BY (A) A SCHEDULED BANK [NOT BEING [* * *] A BANK INCO RPORATED BY OR UNDER THE LAWS OF A COUNTRY OUTSIDE INDIA] OR A NON-SCHEDULED BANK [OR A CO- OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CR EDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOP MENT BANK], AN AMOUNT [NOT EXCEEDING SEVEN AND ONE-HALF PER CENT] OF THE TOTAL INCOME (COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER VIA) AND AN AMOUNT NOT EXCEEDING [TEN] PER CENT OF THE AGGREGATE AVERAGE ADVANCES MADE BY THE RURAL BRANCH ES OF SUCH BANK COMPUTED IN THE PRESCRIBED MANNER : 10. A BARE PERUSAL OF AFORESAID SECTION CLEARLY BR INGS OUT THAT THE DEDUCTION SPECIFIED THEREIN IS IN RESPECT OF ANY PROVISION FOR BAD AND DOUBTFUL DEBT S MADE BY.. AN ELIGIBLE ASSESSEE. THE PRESENCE OF THE AFORESAI D EXPRESSION IN THE SECTION SUPPORTS THE PLEA OF THE REVENUE, WHICH IS TO THE EFFECT THAT THE DEDUCTION ALLOWABLE UNDER SECTION 3 6(1)(VIIA) OF THE ACT IS IN RESPECT OF THE PROVISION MADE BY THE ASSESSEE. IN OUR CONSIDERED OPINION, THE JUDGEMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF STATE BANK OF PATIALA (SUPRA) CLEARLY COVERS THE CO NTROVERSY IN FAVOUR OF THE REVENUE AND BELIES THE INTERPRETATION SOUGHT TO BE CANVASSED BY THE ASSESSEE. IN THE CASE BEFORE THE HONBLE HIGH COURT , ASSESSEE-BANK HAD ORIGINALLY FILED ITS RETURN OF INCOME FOR ASSESSMEN T YEAR 1985-86 CLAIMING DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT AT R S.1,90,36,000/-. AFTER FILING OF THE RETURN THE PROVISIONS OF SECTION 36(1)(VIIA) OF THE ACT WERE AMENDED BY FINANCE ACT, 1985 WHEREBY DEDUCTION WAS ENHANCED TO 10% OF THE PROFIT OR 2% OF THE AGGREGATE AVERAGE ADVANCES MADE BY RURAL BRANCHES OF THE BANK, WHICHEVER WAS HIGHER. ON ACCOUNT OF THE AMENDED PRO VISIONS, ASSESSEE FILED A REVISED RETURN OF INCOME ON 24.04.1986 ENHANCING THE CLAIM FOR DEDUCTION FROM RS.1,90,36,000/- TO RS.1,94,21,000/-. THE ASSE SSING OFFICER RESTRICTED THE DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT TO RS.1,90,36,000/- ONLY AND DISALLOWED THE BALANCE ON THE GROUND THAT IN THE BO OKS OF ACCOUNT PERTAINING ITA NO.1658/PN/2011 A.Y. 2008-09 TO THE RELEVANT ASSESSMENT YEAR, ASSESSEE HAD MADE A PROVISION FOR BAD AND DOUBTFUL DEBTS OF RS.1,90,36,000/- ONLY. THE ASSESS EE ARGUED THAT THE PROVISION OF RS.1,90,36,000/- WAS MADE IN THE BALAN CE-SHEET FINALIZED ON 14.02.1985 WHICH WAS AS PER THE UNAMENDED PROVISION S OF SECTION 36(1)(VIIA) OF THE ACT AND THAT IN VIEW OF THE AMENDMENT OF SEC TION 36(1)(VIIA) OF THE ACT PERMITTING HIGHER CLAIM OF DEDUCTION, THE ASSESSEE COULD NOT HAVE POSSIBLY MADE THE HIGHER PROVISION IN THE BALANCE-SHEET FINA LIZED ON A PRIOR DATE, BUT IT MADE UP THE SHORTFALL BY MAKING AN ADEQUATE PROVISI ON IN THE BALANCE-SHEET OF THE SUBSEQUENT ASSESSMENT YEAR. ON THIS BASIS, I T WAS SOUGHT TO BE MADE OUT THAT THERE WAS SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENT OF LAW OF MAKING PROVISION FOR BAD AND DOUBTFUL DEBTS AND THE REFORE ASSESSEE JUSTIFIED THE CLAIM OF DEDUCTION FOR THE COMPLETE AMOUNT OF R S.1,94,21,000/- AND NOT RESTRICTED TO RS.1,90,36,000/-. THE CIT(A) AS WELL AS THE TRIBUNAL NEGATED THE PLEA OF THE ASSESSEE AND ACCORDINGLY, THE MATTER WA S CARRIED BEFORE THE HONBLE PUNJAB & HARYANA HIGH COURT. THE HONBLE HI GH COURT REFERRED TO THE PROVISIONS OF SECTION 36(1)(VIIA) OF THE ACT AND OB SERVED THAT ..THE DEDUCTION ALLOWABLE UNDER THE ABOVE PROVISIONS IS I N RESPECT OF THE PROVISION MADE AND FURTHER WENT ON TO HOLD THAT ..MAKING OF A PROVISION FOR BAD AND DOUBTFUL DEBTS EQUAL TO THE AMOUNT MENTIONED IN THI S SECTION IS MUST FOR CLAIMING SUCH DEDUCTION. IN VIEW OF THE AFORESAID JUDGEMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT, IN OUR VIEW, THE POSIT ION SOUGHT TO BE CANVASSED BY THE ASSESSEE DESERVES TO BE REPELLED. WE REPRODUCE HEREINAFTER THE RELEVANT PORTION OF THE ORDER OF TH E HONBLE HIGH COURT, WHICH READS AS UNDER :- 5. SEC.36(1)(VIIA) OF THE ACT AS APPLICABLE TO THE ASST. YR. 1985-86, READS AS UNDER : IN RESPECT OF ANY PROVISION FOR BAD AND DOUBTFUL D EBTS MADE BY A SCHEDULED BANK [NOT BEING A BANK APPROVED BY THE CENTRAL GOVE RNMENT FOR THE PURPOSES OF CL.(VIIIA) OR A BANK INCORPORATED BY OR UNDER TH E LAWS OF A COUNTRY OUTSIDE INDIA] OR A NON-SCHEDULED BANK, AN AMOUNT NOT EXCEE DING TEN PER CENT OF THE TOTAL INCOME (COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER VI-A) OR AN AMOUNT NOT EXCEEDING TWO PER CE NT OF THE AGGREGATE ITA NO.1658/PN/2011 A.Y. 2008-09 AVERAGE ADVANCES MADE BY THE RURAL BRANCHES OF SUCH BANK, COMPUTED IN THE PRESCRIBED MANNER, WHICHEVER IS HIGHER. 6. A BARE PERUSAL OF THE ABOVE SHOWS THAT THE DEDUC TION ALLOWABLE UNDER THE ABOVE PROVISIONS IS IN RESPECT OF THE PROVISION MADE. THEREFORE, MAKING OF A PROVISION FOR BAD AND DOUBTFUL DEBTS EQUAL TO THE AMOUNT MENTIONED IN THIS SECTION IS A MUST FOR CLAIMING SUCH DEDUCTION. THE TRIBUNAL HAS RIGHTLY POINTED OUT THAT THIS ISSUE STANDS FURTHER CLARIFIED FROM T HE PROVISO TO CL.(VII) OF S.36(1) OF THE ACT, WHICH READS AS UNDER : PROVIDED THAT IN THE CASE OF AN ASSESSEE TO WHICH CL.(VIIA) APPLIES, THE AMOUNT OF THE DEDUCTION RELATING TO ANY SUCH DEBT O R PART THEREOF SHALL BE LIMITED TO THE AMOUNT BY WHICH SUCH DEBT OR PART TH EREOF EXCEEDS THE CREDIT BALANCE IN THE PROVISION FOR BAD AND DOUBTFUL DEBTS ACCOUNT MADE UNDER THAT CLAUSE. 7. THIS ALSO CLEARLY SHOWS THAT MAKING OF PROVISION EQUAL TO THE AMOUNT CLAIMED AS DEDUCTION IN THE ACCOUNT BOOKS IS NECESS ARY FOR CLAIMING DEDUCTION UNDER S. 36(1)(VIIA) OF THE ACT. THE TRIBUNAL HAS D ISTINGUISHED VARIOUS AUTHORITIES RELIED UPON BY THE ASSESSEE WHEREIN DED UCTIONS HAD BEEN ALLOWED UNDER VARIOUS PROVISIONS WHICH ALSO REQUIRED CREATI ON OF RESERVE AFTER THE ASSESSEE HAD CREATED SUCH RESERVE IN THE ACCOUNT BO OKS BEFORE THE COMPLETION OF THE ASSESSMENT. IT HAS BEEN CORRECTLY POINTED OUT THAT IN ALL THOSE CASES, RESERVES/PROVISIONS HAD BEEN MADE IN T HE BOOKS OF ACCOUNT OF THE SAME ASSESSMENT YEAR AND NOT OF THE SUBSEQUENT ASSESSMENT YEAR. 8. IN THE PRESENT CASE, THE ASSESSEE HAS NOT MADE A NY PROVISION IN THE BOOKS OF ACCOUNT FOR THE ASSESSMENT YEAR UNDER CONS IDERATION, I.E., 1985-86, BY MAKING SUPPLEMENTARY ENTRIES AND BY REVISING ITS BALANCE SHEET. THE PROVISION HAS BEEN MADE IN THE BOOKS OF ACCOUNT OF THE SUBSEQUENT YEAR. 9. WE ARE, THEREFORE, SATISFIED THAT THE TRIBUNAL W AS RIGHT IN HOLDING THAT SINCE THE ASSESSEE HAD MADE A PROVISION OF RS.1,19, 36,000 FOR BAD AND DOUBTFUL DEBTS, ITS CLAIM FOR DEDUCTION UNDER S. 36 (1)(VIIA) OF THE ACT HAD TO BE RESTRICTED TO THAT AMOUNT ONLY. SINCE THE LANGUAGE OF THE STATUTE IS CLEAR AND IS NOT CAPABLE OF ANY OTHER INTERPRETATION, WE ARE SAT ISFIED THAT NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR CONSIDERA TION BY THIS COURT. 11. IN VIEW OF THE AFORESAID INTERPRETATION OF SECT ION 36(1)(VIIA) OF THE ACT BY THE HONBLE PUNJAB & HARYANA HIGH COURT, THE ORDERS OF THE LOWER AUTHORITIES DESERVE TO BE UPHELD INASMUCH AS THE ASSESSEE HAS N OT MADE A PROVISION FOR BAD AND DOUBTFUL DEBTS IN THE BOOKS OF ACCOUNT EQUA L TO THE AMOUNT OF DEDUCTION SOUGHT TO BE CLAIMED UNDER SECTION 36(1)( VIIA) OF THE ACT, AND THEREFORE, IN OUR VIEW, THE LOWER AUTHORITIES WERE JUSTIFIED IN RESTRICTING THE ITA NO.1658/PN/2011 A.Y. 2008-09 DEDUCTION TO RS.50,00,000/-, BEING THE AMOUNT OF PR OVISION ACTUALLY MADE IN THE BOOKS OF ACCOUNT. 12. THE LEARNED COUNSEL FOR THE ASSESSEE HAS CITED CERTAIN DECISION IN SUPPORT OF HIS PROPOSITION THAT THE CLAIM OF DEDUCT ION UNDER SECTION 36(1)(VIIA) OF THE ACT IS NOT LINKED TO MAKING OF A PROVISION I N THE ACCOUNT BOOKS. AT THE OUTSET, WE MAY OBSERVE THAT THE DECISIONS RELIED UP ON BY THE ASSESSEE ARE OF VARIOUS BENCHES OF THE TRIBUNAL AND NOT OF ANY HIGH COURT. THEREFORE, THE JUDGEMENT OF THE HONBLE HIGH COURT IN THE CASE OF STATE BANK OF PATIALA (SUPRA), WHICH IS CONTRARY TO THE DECISIONS OF THE TRIBUNAL RELIED UPON BY THE ASSESSEE; AND BEING SOLITARY JUDGEMENT OF A HIGH CO URT, IS REQUIRED TO BE APPLIED, HAVING REGARD TO THE ESTABLISHED NORMS OF JUDICIAL DISCIPLINE. FOR THE SAID REASON, WE REFRAIN FROM DISCUSSING EACH OF THE DECISIONS OF THE TRIBUNAL RELIED BY THE ASSESSEE BEFORE US. 13. THE OTHER PLEA OF THE ASSESSEE WAS THAT THE CON TENTS OF THE CBDT CIRCULAR DATED 26.11.2008 (SUPRA) IS CONTRARY TO TH E PROVISIONS OF SECTION 36(1)(VIIA) OF THE ACT AND THEREFORE THE SAME SHOUL D BE DISREGARDED. IN OUR VIEW, THE FOLLOWING EXPLANATION IN RESPECT OF SECTI ON 36(1)(VIIA) OF THE ACT RENDERED BY THE CBDT IN CIRCULAR DATED 26.11.2008 ( SUPRA) BY WAY OF PARA 2(III)(B) AS UNDER :- (B) THE DEDUCTION FOR PROVISION FOR BAD AND DOUBTF UL DEBTS SHOULD BE RESTRICTED TO THE AMOUNT OF SUCH PROVISION ACTUA LLY CREATED IN THE BOOKS OF THE ASSESSEE IN THE RELEVANT YEAR OR THE AMOUNT CAL CULATED AS PER PROVISIONS OF SECTION 36(1)(VIIA), WHICHEVER IS LESS. IS IN LINE WITH THE INTERPRETATION OF THE SECTION R ENDERED BY THE HONBLE PUNJAB & HARYANA HIGH COURT AND CANNOT BE SAID TO BE CONTR ARY TO THE PROVISIONS OF THE ACT. THEREFORE, THE RELIANCE PLACED BY THE LOWE R AUTHORITIES ON THE CBDT CIRCULAR DATED 26.11.2008 (SUPRA) CANNOT BE FAULTED . ITA NO.1658/PN/2011 A.Y. 2008-09 14. BEFORE PARTING, WE MAY REFER TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CATHOLIC SYRIAN BANK LTD. (SUP RA) RELIED UPON BY THE ASSESSEE AND ALSO THE DECISION OF OUR CO-ORDINATE B ENCH IN THE CASE OF JAYSINGPUR UDGAON SAHAKARI BANK LTD. (SUPRA). WE HA VE CAREFULLY PERUSED THE SAID DECISION AND FOUND THAT THE ISSUE BEFORE T HE HONBLE SUPREME COURT IN THE CASE OF CATHOLIC SYRIAN BANK LTD. (SUPRA) WA S QUITE DIFFERENT; AND, IN ANY CASE NONE OF THE OBSERVATIONS OF THE HONBLE SUPREM E COURT RUN CONTRARY TO THE PRONOUNCEMENT OF THE HONBLE PUNJAB & HARYANA H IGH COURT IN THE CASE OF STATE BANK OF PATIALA (SUPRA) TO THE EFFECT THAT MA KING OF A PROVISION FOR BAD AND DOUBTFUL DEBTS EQUAL TO THE AMOUNT MENTIONED IN SECTION 36(1)(VIIA) OF THE ACT IS MUST FOR CLAIMING SUCH DEDUCTION. THEREFORE, THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CATHOLIC SYRIA N BANK LTD. (SUPRA) DOES NOT HELP THE ASSESSEE IN THE PRESENT CONTROVERSY BE FORE US. FURTHER, EVEN IN THE CASE OF JAYSINGPUR UDGAON SAHAKARI BANK LTD. (S UPRA), THE TRIBUNAL HAS MERELY SET-ASIDE THE MATTER FOR ADJUDICATION AFRESH BACK TO THE FILE OF THE ASSESSING OFFICER AND IT DOES NOT CONTAIN ANY POSIT IVE FINDING WITH RESPECT TO THE CONTROVERSY BEFORE US. 15. IN THE RESULT, CONSIDERING THE AFORESAID DISCUS SION, IN OUR VIEW, THE ORDERS OF THE AUTHORITIES BELOW ON THIS ASPECT ARE LIABLE TO BE UPHELD. WE HOLD SO. 16. THE APPELLANT HAS RAISED AN ADDITIONAL GROUND O F APPEAL, WHICH WAS HITHERTO NOT RAISED BEFORE THE LOWER AUTHORITIES, A ND THE SAME READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ASSESSING OFFICER BE KINDLY DIRECTED TO ALLOW THE AMORTIZATIO N OF RS.47,85,720/- FOR PREMIUM ON HTM (HELD TO MATURITY) SECURITIES AS PER THE CBDT CIRCULAR NO.17/2008 DATED 26.11.2008. 17. THE LEARNED COUNSEL SUBMITTED THAT THE ASSESSEE WAS ENTITLED TO AMORTIZATION OF PREMIUM PAID ON ACQUISITION OF INVE STMENTS HELD TO MATURITY (HTM) AS PER THE CBDT CIRCULAR DATED 26.11.2008 BUT THE SAID CLAIM COULD NOT ITA NO.1658/PN/2011 A.Y. 2008-09 BE RAISED BEFORE LOWER AUTHORITIES, THOUGH THE APPR OPRIATE FACTS WERE ON RECORD. THE LEARNED COUNSEL SUBMITTED THAT THE AFOR ESAID ISSUE, NOW BEING RAISED, DOES NOT REQUIRE ANY FRESH INVESTIGATION OF FACTS, AND IS A QUESTION OF LAW AND THEREFORE THE ADDITIONAL GROUND BE ADMITTED FOR ADJUDICATION IN THE LIGHT OF THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT (1998) 229 ITR 383 ( SC) AND ALSO THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF CIT VS. PRUTHVI BROKERS & SHAREHOLDERS (P) LTD., (2012) 349 ITR 336 (BOM). 18. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE APPEARING FOR THE REVENUE SUBMITTED THAT THE SAID RELIEF WAS NEITHER CLAIMED IN THE RETURN OF INCOME AND NOR DURING THE ASSESSMENT PROCEEDINGS AND THEREFORE THERE WAS NO JUSTIFICATION TO CONSIDER THE CLAIM AT THE P RESENT STAGE. 19. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IT IS A TRITE LAW THAT AN ASSESSEE IS ENTITLED TO RAISE AN ADDITIONAL GROU ND IN APPEAL PROCEEDINGS, WHICH WAS NOT EARLIER CLAIMED IN THE RETURN OF INCO ME FILED BY HIM. APART FROM OTHER DECISIONS, THE RECENT DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PRUTHVI BROKERS & SHAREHOLDERS (P) LTD. (SU PRA) SUPPORTS THE AFORESAID PROPOSITION. MOREOVER, WE FIND THAT THE ADDITIONAL GROUND NOW SOUGHT TO BE RAISED BY THE ASSESSEE INVOLVES A POINT OF LAW AND IT HAS A BEARING ON THE DETERMINATION OF CORRECT TAX LIABILITY OF THE ASSES SEE; AND, THUS IN TERMS OF THE RATIO OF THE HONBLE SUPREME COURT IN THE CASE OF N ATIONAL THERMAL POWER CO. LTD. (SUPRA), THE SAME DESERVES TO BE ADMITTED FOR ADJUDICATION. 20. AT THE TIME OF HEARING, THE LEARNED COUNSEL HAS ALSO ADDRESSED ON THE MERITS OF THE CLAIM. SO, HOWEVER, AS THE ISSUE WAS NOT BEFORE THE LOWER AUTHORITIES, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER, WHO SHALL CONSIDER THE CLAIM OF THE ASSESSEE RAISED IN THE AFORESAID ADDITIONAL GROUND OF APPEAL AND ADJUDICAT E THE SAME AS PER LAW. NEEDLESS TO SAY, THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE A REASONABLE ITA NO.1658/PN/2011 A.Y. 2008-09 OPPORTUNITY TO PUT-FORTH MATERIAL AND SUBMISSIONS I N SUPPORT OF THE ADDITIONAL GROUND RAISED ABOVE, AND THE ASSESSING OFFICER SHAL L CONSIDER AND ADJUDICATE THE SAME IN ACCORDANCE WITH LAW. THUS, ON THIS GROU ND, ASSESSEE SUCCEEDS FOR STATISTICAL PURPOSES. 21. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER, 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED : 29 TH OCTOBER, 2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), KOLHAPUR; 4) THE CIT, KOLHAPUR; 5) THE DR, B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE