The Nashik Merchants Co-operative Bank Ltd., Nashik V. ACIT, Circle-1, Nashik

ITA 1737/PUN/2013

• Counselvise Citation: 173724514 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 12-09-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASEEM SHARMA
• Keywords: Question of law; Bad and doubtful debts
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.1737/PN/2013 ASSESSMENT YEAR: 2007-08 THE NASHIK MERCHANTS CO-OPERATIVE BANK LTD., A-16, INDUSTRIAL ESTATE, BABUBHAI RATHI CHOWK, SATPUR, NASHIK 422007 . APPELLANT PAN: AAAAT3324K VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 1, NASHIK . RESPONDENT APPELLANT BY : ABHAY AVCHAT RESPONDENT BY : ASEEM SHARMA DATE OF HEARING : 31-12-2014 DATE OF PRONOUNCEMENT : 30-01-2015 ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A)-I, NASHIK DATED 12.07.2013 RELATING TO ASSESSMENT YEAR 2007 -08 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 263 OF THE INC OME-TAX ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED ASSISTANT COMMISSIONER OF INCOME TAX, CIR CLE-1 (ACIT), NASHIK, HAS ERRED IN MAKING DISALLOWANCES / ADDIT IONS AMOUNTING TO RS.15,13,575/- AND THE LEARNED COMMISSIONE R OF INCOME TAX, (APPEAL)-I (CIT), NASHIK HAS ERRED IN CONFI RMING THE SAME. 2. THE LEARNED ACIT, NASHIK HAS ERRED IN DISALLOWING CLAIM FOR BAD AND DOUBTFUL DEBTS AMOUNTING TO RS.15,13,575/- UNDER PROVISIONS OF SECTION 36(1)(VIIA) R.W.S. 36 (2)(V) OF THE INCOME TAX ACT, 1961 (THE ACT) AND THE LEARNED CIT, NASHIK HAS ER RED IN CONFIRMING THE SAME. ITA NO.1737/PN/2013 THE NASHIK MERCHANTS COOP BANK LTD 2 3. THE LEARNED ACIT, NASHIK HAS ERRED IN REASSESSING ASSESSEE'S INCOME BY WRONGLY APPLYING PROVISIONS OF THE INCOME TAX ACT, 1961 DESPITE THE ASSESSMENT WAS MADE EARLIER AND THE LEARNED CIT, NASHIK HAS ERRED IN CONF IRMING THE SAME. 4. THE ORDER UNDER SECTION 143(3) R.W.S. 263 OF THE ACT , IS PASSED NOT IN KEEPING WITH THE PROVISIONS OF LAW AND T HE SAME NEEDS TO BE CANCELLED. 5. THE ORDER UNDER SECTION 143(3) R.W.S. 263 OF THE INC OME TAX ACT 1961, DATED 24.08.2012 AND THE APPELLATE ORDER DATE D 12.07.2013, IN CASE OF THE ASSESSEE IS BAD IN LAW. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 3. THE ISSUE IN GROUNDS OF APPEAL NOS.1 AND 2 RAISED IN TH E PRESENT APPEAL IS AGAINST THE DISALLOWANCE OF CLAIM FOR BAD & DOUBTFU L DEBTS AMOUNTING TO RS.15,13,575/- UNDER THE PROVISIONS OF SECTIO N 36(1)(VIIA) R.W.S. 36(2)(V) OF THE ACT. 4. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE AT THE OUTSET POINTED OUT THAT THE ISSUE IS COVERED IN FAVOUR O F THE ASSESSEE BY THE SERIES OF DECISIONS OF PUNE BENCH OF THE TRIBUNAL. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE HAS PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD M ADE A PROVISION FOR BAD & DOUBTFUL DEBTS AT RS.1,72,50,000/-, WHERE AS THE DEDUCTION CLAIMED BY THE ASSESSEE WAS RS.1,87,73,575/- WH ICH EXCEEDED THE LIMIT PRESCRIBED UNDER SECTION 36(2)(V) OF THE A CT. ORIGINALLY, THE ASSESSING OFFICER ALLOWED THE CLAIM OF THE ASSES SEE VIDE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT . THE CIT(A) THEREAFTER, UNDER SECTION 263 OF THE ACT HELD THE ASSESS MENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AS THE ITA NO.1737/PN/2013 THE NASHIK MERCHANTS COOP BANK LTD 3 ASSESSING OFFICER HAD FAILED TO CONDUCT PROPER ENQUIRIES / V ERIFICATION IN RESPECT OF DEDUCTION ALLOWED UNDER SECTION 36(1)(VII) AND TH E PROVISIONS OF SECTION 36(2)(V) HAVE NOT BEEN APPLIED CORRECTLY. 7. THE CIT(A) SET ASIDE THE ISSUE BACK TO THE FILE OF ASSES SING OFFICER TO RE-DECIDE THE SAME. THE ASSESSING OFFICER AFTER S CRUTINY, DISALLOWED RS.15,13,575/- ON ACCOUNT OF BAD & DOUBTFUL DEB TS WHICH WAS UPHELD BY THE CIT(A). 8. WE FIND THAT SIMILAR ISSUE OF CLAIM OF DEDUCTION ON ACCOUN T OF BAD & DOUBTFUL DEBTS AS AGAINST THE PROVISION MADE FOR BAD & DOUBT FUL DEBTS, AROSE BEFORE THE PUNE BENCH OF THE TRIBUNAL IN M/ S. THE JALNA DIST. CENTRAL CO-OP. BANK LTD. VS. ACIT, ITA NO.2412/PN/ 2012 RELATING TO ASSESSMENT YEAR 2009-10 AND IT WAS HELD AS UNDER:- 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. UNDER THE PROVISIONS OF SECTION 36(1)(VIIA) OF THE AC, IT IS PROVIDED THAT ANY SCHEDULED BANK OR NON-SCHEDULED BANK , OTHER THAN PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY C O-OPERATIVE AGRICULTURAL & RURAL DEVELOPMENT BANK, CAN CLAIM DEDUC TION IN RESPECT OF ANY PROVISION FOR BAD & DOUBTFUL DEBTS OF AN AMOUNT NOT EXCEEDING 7% OF THE TOTAL INCOME COMPUTED, BEFOR E MAKING ANY DEDUCTION UNDER THIS CLAUSE OR CHAPTER VIA AND AMOUNT NOT EXCEEDING 10% OF THE AGGREGATE AVERAGE ADVANCES MAD E BY THE RURAL BRANCHES OF SUCH BANK COMPUTED IN THE PRESCRIB ED MANNER. UNDER THE PROVISIONS OF SAID SECTION, IT IS CLEARLY PR OVIDED THAT THE DEDUCTION SPECIFIED THEREIN WOULD BE IS IN RESPECT O F ANY PROVISION FOR BAD & DOUBTFUL DEBTS MADE BY THE ELIGIBLE ASSESSEE , MEANING THEREBY, THAT THE SAID DEDUCTION WOULD BE ALLOWABLE UNDER SECTION 36(1)(VIIA) OF THE ACT IN RESPECT OF PROVISION MADE. FO R ALLOWING THE EXPENDITURE IN RELEVANT YEAR, PROVISION TO THAT EX TENT HAS TO BE MADE IN THE BOOKS OF ACCOUNT AND IN THE ABSENCE OF ANY SUCH PROVISION, NO DEDUCTION IS ALLOWABLE ON ACCOUNT OF BAD & DOUBTFUL DEBTS. 7. WE FIND THAT SIMILAR ISSUE OF ALLOWABILITY OF CLAIM OF DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT AROSE BE FORE THE PUNE BENCH OF THE TRIBUNAL IN SHRI MAHALAXMI CO-OP. B ANK LTD. VS. ITO IN ITA NO.1658/PN/2011 RELATING TO ASSESSMENT YEAR 2008-09 AND VIDE ORDER DATED 29.10.2013, IT WAS HELD AS UNDER : 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS . WE HAVE ALSO ANXIOUSLY PERUSED THE AUTHORITIES CITED A T BAR IN ORDER TO DETERMINE THE CONTROVERSY ON HAND. THE R ELEVANT PORTION OF SECTION 36(1)(VIIA) OF THE ACT, AS APPLICAB LE FOR THE ITA NO.1737/PN/2013 THE NASHIK MERCHANTS COOP BANK LTD 4 ASSESSMENT YEAR UNDER CONSIDERATION 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 INCORPORATED 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 CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT 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 AVERA GE ADVANCES MADE BY THE RURAL BRANCHES OF SUCH BANK COMPUTED IN THE PRESCRIBED MANNER : 10. A BARE PERUSAL OF AFORESAID SECTION CLEARLY BRING S OUT THAT THE DEDUCTION SPECIFIED THEREIN IS IN RESPECT OF ANY PROVISION FOR BAD AND DOUBTFUL DEBTS MADE BY.. AN ELIGIBLE ASSESSEE. THE PRESENCE OF THE AFORESAID EXP RESSION IN THE SECTION SUPPORTS THE PLEA OF THE REVENUE, WHIC H IS TO THE EFFECT THAT THE DEDUCTION ALLOWABLE UNDER SECTION 36(1)(VIIA) OF THE ACT IS IN RESPECT OF THE PROVISION MADE BY THE ASSESSEE. IN OUR CONSIDERED OPINION, THE JUDGEM ENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE O F STATE BANK OF PATIALA (SUPRA) CLEARLY COVERS THE CONTR OVERSY IN FAVOUR OF THE REVENUE AND BELIES THE INTERPRETAT ION SOUGHT TO BE CANVASSED BY THE ASSESSEE. IN THE CASE BEFORE THE HONBLE HIGH COURT, ASSESSEE-BANK HAD ORIGINALLY FILE D ITS RETURN OF INCOME FOR ASSESSMENT YEAR 1985-86 CLAIMI NG DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT AT RS.1,90,36,000/-. AFTER FILING OF THE RETURN THE PROVISIO NS OF SECTION 36(1)(VIIA) OF THE ACT WERE AMENDED BY FINANCE ACT, 1985 WHEREBY DEDUCTION WAS ENHANCED TO 10% OF THE P ROFIT OR 2% OF THE AGGREGATE AVERAGE ADVANCES MADE BY RUR AL BRANCHES OF THE BANK, WHICHEVER WAS HIGHER. ON ACCOUNT OF THE AMENDED PROVISIONS, ASSESSEE FILED A REVISED RETUR N OF INCOME ON 24.04.1986 ENHANCING THE CLAIM FOR DEDUCTION FROM RS.1,90,36,000/- TO RS.1,94,21,000/-. THE ASSESSING 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 BOOKS OF ACCOUNT PERTAINING TO THE RELEVANT ASSESSMENT YEAR, ASSESSEE HAD MADE A PROVISION FOR BAD AND DOUBTFUL DEBTS OF RS.1,90,36,000/- ONLY. THE ASSESSEE ARGUED THAT THE PROVISION OF RS.1,90,36,000/- WAS MADE IN THE BALANCE- SHEET FINALIZED ON 14.02.1985 WHICH WAS AS PER THE UNAMENDED PROVISIONS OF SECTION 36(1)(VIIA) OF THE ACT AND THAT IN VIEW OF THE AMENDMENT OF SECTION 36(1)(VIIA) O F THE ACT PERMITTING HIGHER CLAIM OF DEDUCTION, THE ASSESSEE COULD NOT HAVE POSSIBLY MADE THE HIGHER PROVISION IN THE BALANCE- SHEET FINALIZED ON A PRIOR DATE, BUT IT MADE UP THE S HORTFALL BY MAKING AN ADEQUATE PROVISION IN THE BALANCE-SHEET OF THE SUBSEQUENT ASSESSMENT YEAR. ON THIS BASIS, IT WAS ITA NO.1737/PN/2013 THE NASHIK MERCHANTS COOP BANK LTD 5 SOUGHT TO BE MADE OUT THAT THERE WAS SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENT OF LAW OF MAKING PROVI SION FOR BAD AND DOUBTFUL DEBTS AND THEREFORE ASSESSEE J USTIFIED THE CLAIM OF DEDUCTION FOR THE COMPLETE AMOUNT OF RS.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 T HE ASSESSEE AND ACCORDINGLY, THE MATTER WAS CARRIED BEF ORE THE HONBLE PUNJAB & HARYANA HIGH COURT. THE HONBLE HIGH COURT REFERRED TO THE PROVISIONS OF SECTION 36 (1)(VIIA) OF THE ACT AND OBSERVED THAT ..THE DEDUCTION ALLOWABLE UNDER THE ABOVE PROVISIONS IS IN RESPECT OF THE PRO VISION MADE AND FURTHER WENT ON TO HOLD THAT ..MAKING OF A PROVISION FOR BAD AND DOUBTFUL DEBTS EQUAL TO THE AMO UNT MENTIONED IN THIS SECTION IS MUST FOR CLAIMING SUCH DEDUCTION. IN VIEW OF THE AFORESAID JUDGEMENT OF TH E HONBLE PUNJAB & HARYANA HIGH COURT, IN OUR VIEW, THE POSITION SOUGHT TO BE CANVASSED BY THE ASSESSEE DES ERVES TO BE REPELLED. WE REPRODUCE HEREINAFTER THE RELEVANT P ORTION OF THE ORDER OF THE HONBLE HIGH COURT, WHICH READS A S 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 DEBTS MADE BY A SCHEDULED BANK [NOT BEING A BANK APPROVED BY THE CENTRAL GOVERNMENT FOR THE PURPOSES OF CL.(VIIIA) OR A BANK INCORPORATED BY OR UNDER THE LAWS OF A COUNTRY OUTSIDE INDIA] OR A NON-SCHEDULED BANK, AN AMOUNT NOT EXCEEDING 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 CENT OF THE AGGREGATE 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 DEDUCTION 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 THE 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 OR PART THEREOF SHALL BE LIMITED TO THE AMOUNT BY WHICH SUCH DEBT OR PART THEREOF 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 ITA NO.1737/PN/2013 THE NASHIK MERCHANTS COOP BANK LTD 6 IN THE ACCOUNT BOOKS IS NECESSARY FOR CLAIMING DEDUCTION UNDER S. 36(1)(VIIA) OF THE ACT. THE TRIBUNAL HAS DISTINGUISHED VARIOUS AUTHORITIES RELIED UPON BY THE ASSESSEE WHEREIN DEDUCTIONS HAD BEEN ALLOWED UNDER VARIOUS PROVISIONS WHICH ALSO REQUIRED CREATION OF RESERVE AFTER THE ASSESSEE HAD CREATED SUCH RESERVE IN THE ACCOUNT BOOKS BEFORE THE COMPLETION O F THE ASSESSMENT. IT HAS BEEN CORRECTLY POINTED OUT THA T IN ALL THOSE CASES, RESERVES/PROVISIONS HAD BEEN MADE IN THE 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 ANY PROVISION IN THE BOOKS OF ACCOUNT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, 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 WAS 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 SATISFIED THAT NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR CONSIDERATION BY THIS COURT. 11. IN VIEW OF THE AFORESAID INTERPRETATION OF SECT ION 36(1)(VIIA) OF THE ACT BY THE HONBLE PUNJAB & HARYANA H IGH COURT, THE ORDERS OF THE LOWER AUTHORITIES DESERVE TO B E UPHELD INASMUCH AS THE ASSESSEE HAS NOT MADE A PROVI SION FOR BAD AND DOUBTFUL DEBTS IN THE BOOKS OF ACCOUNT EQUAL TO THE AMOUNT OF DEDUCTION SOUGHT TO BE CLAIMED UNDER S ECTION 36(1)(VIIA) OF THE ACT, AND THEREFORE, IN OUR VIEW, THE LOWER AUTHORITIES WERE JUSTIFIED IN RESTRICTING THE DEDUCT ION TO RS.50,00,000/-, BEING THE AMOUNT OF PROVISION 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 DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT IS NO T LINKED TO MAKING OF A PROVISION IN THE ACCOUNT BOOKS. AT TH E OUTSET, WE MAY OBSERVE THAT THE DECISIONS RELIED UPON BY TH E ASSESSEE ARE OF VARIOUS BENCHES OF THE TRIBUNAL AND N OT OF ANY HIGH COURT. THEREFORE, THE JUDGEMENT OF THE HONBLE HIGH COURT IN THE CASE OF STATE BANK OF PATIALA (SUPR A), WHICH IS CONTRARY TO THE DECISIONS OF THE TRIBUNAL R ELIED UPON BY THE ASSESSEE; AND BEING SOLITARY JUDGEMENT OF A HIGH COURT, 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 DECIS IONS OF THE TRIBUNAL RELIED BY THE ASSESSEE BEFORE US. ITA NO.1737/PN/2013 THE NASHIK MERCHANTS COOP BANK LTD 7 13. THE OTHER PLEA OF THE ASSESSEE WAS THAT THE CONT ENTS OF THE CBDT CIRCULAR DATED 26.11.2008 (SUPRA) IS CONTR ARY TO THE PROVISIONS OF SECTION 36(1)(VIIA) OF THE ACT AND THEREFORE THE SAME SHOULD BE DISREGARDED. IN OUR VIEW , THE FOLLOWING EXPLANATION IN RESPECT OF SECTION 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 DOUBTFUL DEBTS SHOULD BE RESTRICTED TO THE AMOUNT OF SUCH PROVISION ACTUALLY CREATED IN THE BOOKS OF THE ASSESSEE IN THE RELEVANT YEAR OR THE AMOUNT CALCULATED AS PER PROVISIONS OF SECTION 36(1)(VIIA), WHICHEVER IS LESS. IS IN LINE WITH THE INTERPRETATION OF THE SECTION RE NDERED BY THE HONBLE PUNJAB & HARYANA HIGH COURT AND CANNOT BE SAID TO BE CONTRARY TO THE PROVISIONS OF THE ACT. TH EREFORE, THE RELIANCE PLACED BY THE LOWER AUTHORITIES ON THE CB DT CIRCULAR DATED 26.11.2008 (SUPRA) CANNOT BE FAULTED. 14. BEFORE PARTING, WE MAY REFER TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CATHOLIC SYRIAN B ANK LTD. (SUPRA) RELIED UPON BY THE ASSESSEE AND ALSO THE DECISION OF OUR CO-ORDINATE BENCH IN THE CASE OF JAY SINGPUR UDGAON SAHAKARI BANK LTD. (SUPRA). WE HAVE CAREFULLY PERUSED THE SAID DECISION AND FOUND THAT THE ISSUE BEFORE THE HONBLE SUPREME COURT IN THE CASE OF CATHOLIC SYR IAN BANK LTD. (SUPRA) WAS QUITE DIFFERENT; AND, IN ANY CASE NONE OF THE OBSERVATIONS OF THE HONBLE SUPREME COURT RUN CONTRARY TO THE PRONOUNCEMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF STATE BANK OF PAT IALA (SUPRA) TO THE EFFECT THAT MAKING OF A PROVISION FOR BAD AND DOUBTFUL DEBTS EQUAL TO THE AMOUNT MENTIONED IN SECTI ON 36(1)(VIIA) OF THE ACT IS MUST FOR CLAIMING SUCH DEDUCTI ON. THEREFORE, THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CATHOLIC SYRIAN BANK LTD. (SUPRA) DOES NOT HELP THE ASSESSEE IN THE PRESENT CONTROVERSY BEFORE US. F URTHER, EVEN IN THE CASE OF JAYSINGPUR UDGAON SAHAKARI BANK LTD. (SUPRA), THE TRIBUNAL HAS MERELY SET-ASIDE THE MATTER F OR ADJUDICATION AFRESH BACK TO THE FILE OF THE ASSESSIN G OFFICER AND IT DOES NOT CONTAIN ANY POSITIVE FINDING WITH RES PECT TO THE CONTROVERSY BEFORE US. 15. IN THE RESULT, CONSIDERING THE AFORESAID DISCUSSI ON, IN OUR VIEW, THE ORDERS OF THE AUTHORITIES BELOW ON THI S ASPECT ARE LIABLE TO BE UPHELD. WE HOLD SO. 9. THE ISSUE ARISING IN THE PRESENT APPEAL IS SQUARELY CO VERED BY THE RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN M/S. THE JALNA DIST. CENTRAL CO-OP. BANK LTD. VS. ACIT (SUPRA). THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD MADE PROVISION FO R BAD & DOUBTFUL DEBTS AT RS.1,72,50,000/- AS AGAINST WHICH, IT HAD CLAIMED ITA NO.1737/PN/2013 THE NASHIK MERCHANTS COOP BANK LTD 8 DEDUCTION AT RS.1,87,73,575/-. IN VIEW OF THE PROVISIONS OF SECTION 36(1)(VII) R.W.S. 36(2)(V) OF THE ACT, THE ASSESSEE IS NOT ENTITLED TO THE CLAIM OF DEDUCTION OF RS.15,13,575/-. ACCORDINGLY, WE UPHOLD THE ORDERS OF AUTHORITIES BELOW AND DISMISS THE GROUNDS OF APP EAL NOS.1 AND 2 RAISED BY THE ASSESSEE. 10. THE ASSESSEE VIDE GROUNDS OF APPEAL NOS.3 TO 5 IS AG GRIEVED BY THE ORDER OF ASSESSING OFFICER IN RE-ASSESSING THE INCOME IN THE HANDS OF THE ASSESSEE, DESPITE THE FACT THAT THE ASSESSMENT W AS MADE EARLIER. WE FIND NO MERIT IN THE SAID GROUNDS OF APPEAL RAISED BY TH E ASSESSEE, WHERE THE ASSESSMENT ORDER HAS BEEN PASSED PURSUANT TO THE DIRECTIONS OF CIT(A) UNDER SECTION 263 OF THE ACT. IN ANY CASE, THE ISSUE IS SQUARELY COVERED BY THE PROVISIONS OF THE ACT A ND THE ASSESSING OFFICER HAS PASSED THE ORDER AFTER APPLYING THE SAID PROVISIONS OF THE ACT. THE SAID GROUNDS OF APPEAL RAISED B Y THE ASSESSEE ARE THUS, DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF JANUARY, 2015. SD/- SD/- (G.S. PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 30 TH JANUARY, 2015. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE