UNION BANK OF INDIA, Mumbai V. DCIT, LTU (2), Mumbai

ITA 2128/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3664 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 05-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: USHA GAIKWADLD
• Assessee Lawyers: C NARESH LD
• Keywords: Reopening of assessment; Depreciation; Deemed to accrue or arise in india; Non-deduction of tax; Bad and doubtful debts; Reassessment proceedings; TDS
• Section: 143(3); 115JB; 40(a)(ia); 41(2); 148

Judgement Text

UNION BANK OF INDIA ASSESSMENT YEAR: 2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI , , BEFORE HONBLE SHRI AMARJIT SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.2128/MUM/2019 ( / ASSESSMENT YEAR: 2010-1) UNION BANK OF INDIA UNION BANK BHAVAN, 6 TH FLOOR 239, VIDHAN BHAVAN MARG NARIMAN POINT, MUMBAI-400 021. / VS. D CIT LTU(2) 29 TH FLOOR, WORLD TRADE CENTRE CUFFE PARADE MUMBAI-400 005. '# ./ ./PAN/GIR NO. AAACU-0564-G ( !#% /APPELLANT ) : ( &'#% / RESPONDENT ) & ! ./ I.T.A. NO.2229/MUM/2019 ( / ASSESSMENT YEAR: 2010-11) DCIT LTU(2) 29 TH FLOOR, WORLD TRADE CENTRE CUFFE PARADE MUMBAI-400 005. / VS. UNION BANK OF INDIA UNION BANK BHAVAN, 6 TH FLOOR 239, VIDHAN BHAVAN MARG NARIMAN POINT, MUMBAI-400 021. '# ./ ./PAN/GIR NO. AAACU-0564-G ( !#% /APPELLANT ) : ( &'#% / RESPONDENT ) ASSESSEE BY : SHRI C. NARESH-LD. AR REVENUE BY : SMT. USHA GAIKWAD-LD. DR / DATE OF HEARING : 15/12/2020 / DATE OF PRONOUNCEMENT : 03/03/2021 UNION BANK OF INDIA ASSESSMENT YEAR: 2010-11 2 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1.1 AFORESAID CROSS-APPEALS FOR ASSESSMENT YEAR (AY ) 2010-11 ASSAILS THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-2, MUMBAI [CIT(A)], APPEAL NO.CIT(A)-2/IT/10409/2018-19 DATED 29/01/2019. THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS FRA MED BY LD. ASSESSING OFFICER (AO) U/S 143(3) R.W.S. 147 ON 29/ 12/2017. THE ORIGINAL ASSESSMENT WAS FRAMED U/S 143(3) ON 18/02/2013. ANO THER ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 263 ON 03/06/2015. THE ASSESSEE IS A NATIONALIZED BANK CARRYING ON THE BUSINESS OF BANKI NG. 1.2 THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDE R: - REOPENING OF ASSESSMENT 1.1 THE CIT(A) FAILED TO APPRECIATE THAT, AO REO PENED THE ASSESSMENT AFTER A PERIOD OF 4 YEARS FROM THE END OF THE ASSESSMENT YEAR EVEN WHEN THERE WAS NO FAILURE ON THE PART OF APPELLANT TO FULLY AND TRULY DISCLOSE ALL INFORMATI ON REQUIRED FOR COMPLETION OF ASSESSMENT. RECOVERY IN RESPECT OF RURAL BAD DEBTS WRITTEN OFF 2.1 THE CIT(A) ERRED IN HOLDING THAT RECOVERY FR OM BAD DEBTS WRITTEN OFF IN RESPECT OF RURAL BRANCHES IS CHARGEABLE TO TAX EVEN WHEN THE BAD DEB T WRITTEN OFF WAS NOT ALLOWED AS DEDUCTION ON THE GROUND THAT DEDUCTION U/S 36(1)(VI IA) IS ALLOWED WITHOUT APPRECIATING THAT THE BAD DEBTS WRITTEN OFF IS ALREADY REDUCED FROM T HE SAID PROVISION INSTEAD OF BEING CLAIMED AS DEDUCTION AND TAXING THE RECOVERY WOULD AMOUNT T O TAXING THE AMOUNT TWICE. DISALLOWANCE U/S 40 (A)(IA) 3.1 THE CIT(A) ERRED IN CONFIRMING THE DISALLOWA NCE U/S 40(A)(IA) WITHOUT APPRECIATING THAT TDS IS AUTOMATICALLY DEDUCTED BY SYSTEM AND UNLESS THERE WERE SPECIFIC REASONS SUCH AS EXEMPTION CERTIFICATE ETC., QUESTION OF NON-DEDUCTI ON WILL NOT ARISE AND THE EVIDENCE TO SATISFACTION OF AO COULD NOT BE GIVEN WITHIN A SHOR T PERIOD DUE TO CONSIDERABLE LAPSE OF TIME OF MORE THAN 8 YEARS. 1.3 THE GROUNDS RAISED BY THE REVENUE READ AS UNDER :- 1. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX(APPEALS) WAS RIGHT IN HO LDING THAT PROVISIONS U/S. 115JB ARE NOT APPLICABLE TO THE ASSESSEE. 2. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS RIGHT IN D ELETING THE ADDITION OF LOSS ON REVALUATION OF INVESTMENT TO BOOK PROFIT HOLDING TH AT PROVISIONS U/S. 115JB ARE NOT APPLICABLE TO THE ASSESSEE? UNION BANK OF INDIA ASSESSMENT YEAR: 2010-11 3 2. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING JUDICIAL PRON OUNCEMENT AS RELIED UPON DURING THE COURSE OF HEARING. OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPH S. 3. BRIEFLY STATED, THE ASSESSMENT FOR THE YEAR UNDE R CONSIDERATION WAS REOPENED AS PER DUE PROCESS OF LAW VIDE NOTICE U/S 148 DATED 29/03/2017. DURING THE COURSE OF ASSESSMENT PROCEED INGS, THE REASONS FOR REOPENING WERE DULY SUPPLIED TO THE ASSESSEE, W HICH HAS ALSO BEEN EXTRACTED IN PARA-2 OF THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 147. IT IS EVIDENT THAT THE REASSESSMENT PROCEEDING S WERE TRIGGERED UPON RECEIPT OF INFORMATION FROM TDS WING, NAGPUR THAT D URING THE COURSE OF SURVEY ON ONE OF THE BRANCHES OF THE ASSESSEE, TAX AT SOURCE (TDS) WAS NOT DEDUCTED IN CERTAIN CASES WHERE INTEREST CR EDITED / PAID EXCEEDED THE BASIC EXEMPTION LIMIT. THE FAILURE TO DO SO WOULD ATTRACT DISALLOWANCE OF INTEREST EXPENDITURE U/S 40(A)(IA) AS DONE IN AY 2009-10. THE OTHER ASPECTS WHICH WAS TO BE EXAMINED DURING REASSESSMENT PROCEEDINGS WERE- (I) DEDUCTION OF RS.250.44 LACS A S CLAIMED BY ASSESSEE TOWARDS RECOVERY IN RESPECT OF ACCOUNTS WR ITTEN-OFF OF RURAL BRANCHES; (II) ADJUSTMENT OF BOOK PROFITS ON ACCOUN T OF REVALUATION OF INVESTMENT. 4. IT WAS NOTED BY LD. AO THAT THE ASSESSEE HAD NOT MADE ANY RELEVANT SUBMISSIONS IN THESE RESPECTS DURING SCRUT INY ASSESSMENT PROCEEDING U/S 143(3). AFTER GOING THROUGH ASSESSEE S SUBMISSIONS / EXPLANATIONS ON THESE ISSUES, CERTAIN ADDITIONS / A DJUSTMENTS WERE MADE WHILE FRAMING THE ASSESSMENT. THE FOLLOWING ISSUES FORM SUBJECT MATTER OF CROSS-APPEALS BEFORE US: - UNION BANK OF INDIA ASSESSMENT YEAR: 2010-11 4 NO. NATURE OF ADDITION AMT. (RS.) 1. RECOVERY OF BAD DEBTS RS.250.44 LACS 2. DISALLOWANCE U/S 40(A)(IA) RS.13.10 LACS 3. INCREASE IN BOOK PROFITS U/S 115JB ON ACCOUNT OF LOSS ON REVALUATION OF INVESTMENT RS.60130.26 LACS 5.1 RECOVERY OF BAD DEBTS OF RURAL BRANCHES THE ASSESSEE CLAIMED DEDUCTION TOWARDS RECOVERY IN RESPECT OF ACCOUNTS WRITTEN-OFF OF RURAL BRANCHES. THE REASONI NG WAS THAT BAD DEBTS WRITTEN-OFF RELATING TO RURAL BRANCHES WERE NOT CLA IMED AS DEDUCTION IN THE EARLIER YEARS SINCE THE CREDIT BALANCE IN THE PROVI SION FOR BAD AND DOUBTFUL DEBTS RELATING TO RURAL BRANCHES HAD ALWAY S BEEN MORE THAN THE BAD DEBTS WRITTEN OFF RELATING TO RURAL BRANCHES. T HE RECOVERY MADE DURING THE YEAR IN RESPECT OF BAD DEBTS WRITTEN-OFF WOULD BE TAXABLE U/S 41(4) ONLY IF A DEDUCTION WAS ALLOWED U/S 36(1)(VII ). WHERE NO DEDUCTION WAS ALLOWED U/S 36(1)(VII) IN RESPECT OF BAD DEBTS WRITTEN OFF, THE QUESTION OF TAXING THE RECOVERIES MADE DURING THE YEARS IN R ESPECT OF SUCH WRITE- OFF WILL NOT ARISE. SINCE THE RECOVERY SO MADE DURI NG THE YEAR WAS CREDITED IN PROFIT & LOSS ACCOUNT, IT WAS CLAIMED A S DEDUCTION IN THE STATEMENT OF TOTAL INCOME. HOWEVER, OBSERVING THAT ASSESSEE BEING A BANK, 10% OF AGGREGATE AVERAGE ADVANCES MADE BY RURAL BRANCHES OF SUCH BAN K WOULD BE ALLOWED AS DEDUCTION EVERY YEAR UNDER SPECIFIC PROV ISIONS OF SEC.36(1)(VIIA) TOWARDS PROVISION FOR BAD AND DOUBT FUL DEBTS AND THEREBY A RESERVE IS CREATED TO SET-OFF THE BAD DEBTS IN RE SPECT OF RURAL BRANCHES. WHEREVER THERE IS BAD DEBTS AND WRITTEN-OFF, IT WOU LD BE DEBITED TO PROVISION FOR BAD AND DOUBTFUL DEBTS CREATED U/S 36 (1)(VIIA) OF THE ACT. UNION BANK OF INDIA ASSESSMENT YEAR: 2010-11 5 FURTHER, AS PER SEC. 36(1)(VII), THE ASSESSEE IS FU RTHER ALLOWED DEDUCTION OF ANY BAD DEBTS WRITTEN-OFF TO THE EXTENT IT EXCEE DS THE CREDIT BALANCE IN THE PROVISION FOR BAD AND DOUBTFUL DEBTS MADE U/S 3 6(1)(VIIA). HENCE, THE BAD DEBTS WRITTEN-OFF IN RESPECT OF RURAL BRANCHES ARE ALWAYS ALLOWED AS DEDUCTION IN CASE OF BANK. THEREFORE, THE ASSESSEE S PLEA WAS TO BE REJECTED AND ACCORDINGLY THE DEDUCTION AS CLAIMED B Y THE ASSESSEE WAS ADDED BACK TO ITS INCOME. 5.2 DISALLOWANCE U/S 40(A)(IA) DURING SURVEY ON ONE OF THE BRANCHES OF THE ASSESSE E, IT WAS FOUND THAT THE ASSESSEE DID NOT DEDUCT TDS IN CERTAIN CASES WH ERE INTEREST CREDITED / PAID EXCEEDED BASIC EXEMPTION LIMIT. THE FAILURE TO DO SO WOULD ATTRACT DISALLOWANCE OF INTEREST EXPENDITURE U/S 40(A)(IA). UPON PERUSAL OF DETAILS FURNISHED BY THE ASSESSEE, IT WA S FOUND THAT THERE WAS NON-DEDUCTION OF TDS ON INTEREST OF RS.7.72 LACS AN D SHORT DEDUCTION OF TDS ON INTEREST OF RS.5.38 LACS. ACCORDINGLY, THIS DISALLOWANCE WAS WORKED OUT AT RS.13.10 LACS. 5.3 LOSS ON REVALUATION OF INVESTMENT IT WAS OBSERVED BY LD. AO THAT WHILE PREPARING PROF IT & LOSS ACCOUNT AS PER SCHEDULE-VI OF THE COMPANIES ACT, THE ASSESSEE CREDITED AN AMOUNT OF RS.718.64 CRORES ON ACCOUNT OF EXCESS PROVISION FOR DEPRECIATION ON INVESTMENT REVERSED AND DEBITED THE PROFIT & LOSS ACCOUNT WITH AN AMOUNT OF RS.601.30 CRORES ON ACCOUNT OF REVALUATI ON OF INVESTMENT. HOWEVER, THE BOOK PROFITS WERE REDUCED BY RS.718.64 CRORES AS AGAINST THE FACT THAT THE NET PROFIT WAS ACTUALLY CREDITED BY RS.117.34 CRORES ONLY I.E. THE DIFFERENTIAL OF RS.718.64 CRORES & RS.601. 30 CRORES. THEREFORE, BOOK PROFITS U/S 115JB WAS REQUIRED TO BE INCREASED BY THE EXTENT OF UNION BANK OF INDIA ASSESSMENT YEAR: 2010-11 6 DIFFERENTIAL OF RS.601.30 CRORES. ACCORDINGLY, BOOK PROFITS WERE RECOMPUTED AND INCREASED TO THE EXTENT OF RS.601.30 CRORES. PROCEEDINGS BEFORE LD. CIT(A) & OUR ADJUDICATION 6. AGGRIEVED AS AFORESAID, THE ASSESSEE ASSAILED TH E ASSESSMENT SO FRAMED WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 29/01/2019. ON THE LEGAL ISSUE OF REOPENING, LD.CIT (A) REJECTED ASSESSEES PLEA BY OBSERVING THAT THE REASSESSMENT PROCEEDINGS WERE REOPENED PURSUANT TO RECEIPT OF SPECIFIC INFORMATIO N FROM TDS WING REGARDING NON-DEDUCTION OF TDS IN CERTAIN CASES. BA SED ON THIS INFORMATION, THE CASE WAS REOPENED AND EXAMINED IN AY 2009-10 AND DISALLOWANCE WAS MADE U/S 40(A)(IA). THUS, IT WAS A CLEAR CASE OF RECEIPT OF TANGIBLE INFORMATION WHICH ESTABLISHED THAT THER E WAS FAILURE ON THE PART OF ASSESSEE TO MAKE TRUE AND FULL DISCLOSURE O F ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. ONCE REOPENING WAS DONE O N A VALID GROUND, OTHER ISSUES WHICH SHOW UNDERASSESSMENT OR ESCAPEME NT OF INCOME COULD ALSO BE CONSIDERED BY LD. AO AND THEREFORE TH E OTHER GROUNDS OF REOPENING THE CASE, AS RECORDED IN THE REASONS, WER E ALSO HELD TO BE VALID. BEFORE US, THE LD. AR HAS ALSO RAISED SIMILAR GROUN DS AND CHALLENGED THE VALIDITY OF JURISDICTION ACQUIRED BY LD. AO FOR REOPENING THE CASE. IT HAS BEEN SUBMITTED THAT THE ASSESSMENT WAS OPENED A FTER 4 YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR AND THERE WAS N O FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL INF ORMATION REQUIRED FOR COMPLETION OF ASSESSMENT. HOWEVER, WE FIND THAT TDS SURVEY CARRIED OUT BY THE DEPARTMENT AGAINST THE ASSESSEE WAS SUBSEQUE NT DEVELOPMENT. THE SURVEY FINDINGS REVEALED CERTAIN TDS DEFAULT ON THE PART OF THE UNION BANK OF INDIA ASSESSMENT YEAR: 2010-11 7 ASSESSEE WHICH WOULD REQUIRE DISALLOWANCE U/S 40(A) (IA). AT THE STAGE OF FORMATION OF BELIEF, NOTHING MORE WAS REQUIRED. IN OUR OPINION, SUFFICIENCY OF REASON WAS NOT A SINE-QUA-NON TO REOPEN ASSESSEE S CASE RATHER PRIMA-FACIE OPINION OF ESCAPEMENT OR UNDERASSESSMEN T OF INCOME WAS REQUIRED TO BE FORMED AT THIS STAGE. THERE WAS NO R EQUIREMENT UNDER LAW TO ESTABLISH THAT INCOME, IN FACT, ESCAPED ASSESSME NT BEFORE TRIGGERING REASSESSMENT PROCEEDINGS AGAINST THE ASSESSEE AS HE LD BY HONBLE SUPREME COURT IN RAYMOND WOOLLEN MILLS LTD. V. ITO [236 ITR 34]. IN THE PRESENT CASE, SPECIFIC TANGIBLE INFORMATION CAM E INTO THE POSSESSION OF LD. AO WHICH REVEALED POSSIBLE ESCAPEMENT OF INC OME IN THE HANDS OF THE ASSESSEE. NOTHING MORE, IN OUR OPINION, WAS REQ UIRED AT THIS STAGE. UNDISPUTEDLY, ONCE THE CASE WAS REOPENED, THE OTHER ISSUES OF UNDERASSESSMENT OR ESCAPEMENT OF INCOME COULD ALSO BE EXAMINED BY LD. AO. THE LD. AR HAS ALSO PLEADED THAT OBJECTIONS FILED BY THE ASSESSEE WERE NOT DISPOSED-OFF. HOWEVER, THE SAID P LEA HAS ALSO NO SUBSTANCE SINCE THE ASSESSEE, IN RESPONSE TO NOTICE U/.S 148, VIDE LETTER DATED 04/09/2017, MERELY SUBMITTED THAT IT HAD FULL Y & TRULY DISCLOSED ALL THE PARTICULARS REQUIRED FOR THE ASSESSMENT AT THE TIME OF FILING OF RETURN OF INCOME AND AT THE TIME OF VARIOUS HEARINGS FOR A SSESSMENT U/S 143(3) WHEREAS IT IS NOTABLE THAT CASE HAS BEEN REOPENED O N THE BASIS OF SUBSEQUENT RECEIPT OF TANGIBLE INFORMATION. THEREFO RE, WE CONCUR WITH THE VIEW OF LD. CIT(A), IN THIS REGARD AND DISMISS GROU ND NO.1 RAISED BY THE ASSESSEE. 7. ON THE ISSUE OF RECOVERY OF BAD-DEBTS OF RURAL B RANCHES, THE ASSESSEE PLACED RELIANCE ON THE DECISION OF BANGALO RE TRIBUNAL IN STATE BANK OF MYSORE (33 SOT 7). HOWEVER, THE SAID DECISI ON WAS UNION BANK OF INDIA ASSESSMENT YEAR: 2010-11 8 DISTINGUISHED BY LD. CIT(A) ON THE GROUND THAT THE EFFECT OF SECTION 36(2)(V) WAS NOT CONSIDERED IN THE STATED DECISION. REGARDING ASSESSEES RELIANCE ON APPELLATE ORDER IN ITS OWN C ASE FOR AY 2014-15, IT WAS OBSERVED THAT THOUGH THE ISSUE WAS DECIDED IN A SSESSEES FAVOR BUT WITH A DIRECTION TO THE LD. AO TO VERIFY CERTAIN FA CTS IN TERMS OF CITED DECISION OF STATE BANK OF MYSORE (33 SOT 7). SINCE THE SAID DECISION WAS HELD TO BE NOT APPLICABLE IN THIS YEAR, THE REA SONING OF LD. AO IN MAKING THE IMPUGNED ADDITIONS WAS UPHELD. AGGRIEVED , THE ASSESSEE IS IN FURTHER APPEAL BEFORE US BY WAY OF GROUND NO.2. BEFORE US, IT IS ADMITTED POSITION THAT SIMILAR ISS UE AROSE BEFORE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2008-09, ITA NOS.3644 /MUM/2016 & 4563/MUM/2016 IN RECENT ORDER DATED 03/02/2020 WHER EIN THE MATTER WAS DECIDED IN ASSESSEES FAVOR SUBJECT TO CERTAIN VERIFICATION OF BY LD. AO. THE ADJUDICATION OF COORDINATE BENCH READ AS UN DER: - 90. WE NOTED FROM THE ABOVE ARGUMENTS OF BOTH THE SIDES AND CASE LAW CITED BY THE PARTIES, THAT THE ISSUE IS SQUARELY COVERED BY A DECISION OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF STATE BANK OF MYSORE VS. DCIT [2009] 33 SOT 7 (BANGALORE), NOW MERGED WITH ASSESSEE. WE NOTED THA T THE TRIBUNAL IN THE CASE OF STATE BANK OF MYSORE (SUPRA) NARRATED THE FACTS AND THE FACTS IN THE PRESENT CASE ARE EXACTLY THE SAME AS IN THE CASE OF STATE BANK O F MYSORE. IN THE CASE OF STATE BANK OF MYSORE (SUPRA), THE ASSESSEE HAD CLAIMED DE DUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT AND NOT UNDER SECTION 36(1)( VII) OF THE ACT. ACCORDINGLY, THE BANGALORE TRIBUNAL HAS HELD THAT SECTION 41(4) OF T HE ACT CANNOT BE INVOKED. SECTIONS 41(1), 41(2), 41(3) AND 41(4) OF THE ACT O PERATE IN DIFFERENT SPHERES. EACH OF THE SUB-SECTIONS TO SECTION 41 OF THE ACT DEALS WITH DIFFERENT AND DISTINCT CIRCUMSTANCES. EACH OF THE SUB-SECTIONS DEALS WITH DIFFERENT AND DISTINCT TOPICS AND ONE CANNOT READ RECOUPMENT UNDER ONE SUB-SECTION IN TO ANOTHER. WE HAVE CONSIDERED THE DECISION RELIED ON IN THIS REGARD OF SUPREME COURT IN THE CASE OF NECTAR BEVERAGES (P.) LTD. VS. DCIT [2009] 314 ITR 314 (SC) WHEREIN THE SUPREME COURT HAS DEALT WITH THE SPECIFIC SECTION 41(2) OF THE ACT FOR TAXING BALANCING CHARGE VERSUS TAXING THE SAME UNDER SECTION 41(1) OF THE A CT AND HAS CONCLUDED THAT SECTION 41(1) OF THE ACT SHALL NOT BE APPLICABLE. 91. AS THE ASPECTS OF BAD AND DOUBTFUL DEBTS IS DEA LT WITH SPECIFICALLY UNDER SECTION 41(4) OF THE ACT, AS LAID DOWN BY THE SUPREME COURT IN NECTAR BEVERAGES (SUPRA), SECTION 41(1) OF THE ACT IS NOT APPLICABLE IN CASE OF THE ASSESSEE. FURTHER, THE PRIMARY CONDITION TO BE SATISFIED FOR TAXING AN AMO UNT AS DEEMED INCOME UNDER UNION BANK OF INDIA ASSESSMENT YEAR: 2010-11 9 SECTION 41(1) OF THE ACT IS THAT A DEDUCTION/ALLOWA NCE SHOULD HAVE BEEN CLAIMED BY THE ASSESSEE IN RESPECT OF A LOSS, EXPENDITURE OR T RADING LIABILITY. A DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT IS NOT FOR A LOSS, E XPENDITURE OR TRADING LIABILITY, BUT FOR A PROVISION FOR BAD AND DOUBTFUL DEBTS. WE NOTED THAT THE LEARNED CIT DEPARTMENTAL REPRESENTATIVE HAD RAISED A CONTENTION THAT THE CIT (A) AND AO HAVE NOT PERUSED THE DETAILS AND, HENCE, THE MATTER MAY BE RESTORED BACK WHICH WAS OPPOSED. IN RELATION TO THE ABOVE CONTENTION, WITHOUT PREJUDICE TO THE ASSESSEES OBJECTION IN THE EVENT THE MATTER IS PROPOSED TO BE REMANDED BACK TO THE AO, A DIRECTION MAY BE GIVEN TO THE AO TO DELETE THE ADDITION, IF THE RECO VERY OF THE AMOUNT IS IN RESPECT OF A WRITE OFF CLAIMED AND ALLOWED AS A DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT AND NOT UNDER SECTION 36(1)(VII) OF THE ACT IN THE EARL IER YEARS. 92. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT PRINCIPALLY THE ASSESSEE IS ENTITLED FOR CLAIM OF DEDUCTION UNDER SECTION 36 (1)(VIIA) OF THE ACT, WHICH HAS RIGHTLY BEEN CLAIMED. THE ASSESSEE HAS NOT MADE ANY CLAIM UNDER SECTION 36(1)(VII) OF THE ACT IN THIS REGARD. HENCE, WE ALLOW THE CLAI M OF THE ASSESSEE BUT THE MATTER IS RESTORED BACK TO THE FILE OF THE AO FOR VERIFICATIO N PURPOSES. THE ISSUE OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. SINCE ISSUE IS IDENTICAL, RESPECTFULLY FOLLOWING TH E ABOVE DECISION, THIS ISSUE IS PRINCIPALLY DECIDED IN ASSESSEES FAVOR SU BJECT TO VERIFICATION BY LD. AO ON SIMILAR LINES. THIS GROUND STAND ALLOWED FOR STATISTICAL PURPOSES. 8. THE DISALLOWANCE U/S 40(A)(IA) WAS CONFIRMED BY LD. CIT(A) SINCE THE ASSESSEE WAS NOT ABLE TO EXPLAIN THE REASON FOR NON-DEDUCTION OF TAX AT SOURCE WITH PROPER EVIDENCES. AGGRIEVED, THE ASS ESSEE IS IN FURTHER APPEAL BEFORE US BY WAY OF GROUND NO. 3. IT HAS BEEN SUBMITTED BEFORE US THAT EVIDENCE TO TH E SATISFACTION OF LD. AO FOR REASONS OF NON-DEDUCTION TAX SUCH AS FORM 15 G/15H ETC. COULD NOT BE FURNISHED SINCE CONSIDERABLE PERIOD OF TIME HAD LAPSED. THE LD. AR SUBMITTED THAT TAX WAS AUTOMATICALLY DEDUCTED BY THE SYSTEMS AND HENCE THE CHANCES OF NON-DEDUCTION WITHOUT ADEQUATE REASONS WERE REMOTE. UPON DUE CONSIDERATION OF FACTUAL MATRIX, THE BENCH DEEM IT FIT TO GRANT ANOTHER OPPORTUNITY TO THE ASSESSEE TO FURNISH REQU ISITE EVIDENCES BEFORE UNION BANK OF INDIA ASSESSMENT YEAR: 2010-11 10 LD. AO IN SUPPORT OF NON-DEDUCTION OF TAX AT SOURCE OR ALTERNATIVELY PROVE APPLICABILITY OF SECOND PROVISO TO SEC. 40(A)(IA). THIS GROUND STAND ALLOWED FOR STATISTICAL PURPOSES. 9. THE SOLE SUBJECT MATTER OF REVENUES APPEAL IS A PPLICABILITY OF SEC.115JB TO THE ASSESSEE BANK FOR THE YEAR UNDER C ONSIDERATION. REGARDING ADJUSTMENT OF BOOK PROFITS U/S 115JB, REL YING UPON TRIBUNAL DECISION IN ASSESSEES OWN CASE FOR AY 2007-08 AS W ELL AS IN AY 2010- 11, LD. CIT(A) HELD THAT THE PROVISIONS OF SECTION 115JB WERE NOT APPLICABLE TO THE ASSESSEE BANK. AGGRIEVED, THE REV ENUE IS IN FURTHER APPEAL BEFORE US. WE FIND THAT THE ISSUE OF APPLICABILITY OF SECTION 115JB (PRIOR TO ITS AMENDMENT BY VIRTUE OF FINANCE ACT, 2012) TO BANKIN G COMPANY GOVERNED BY THE PROVISIONS OF BANKING REGULATION AC T, 1949 IS SQUARELY COVERED IN ASSESSEES FAVOR BY THE DECISION OF HON BLE HIGH COURT OF BOMBAY IN ASSESSEES OWN CASE FOR AY 2005-06 WHICH IS REPORTED AT 105 TAXMANN.COM 253 DATED 16/04/2019. A COPY OF THE SAME IS ON RECORD. THE LD. DR IS UNABLE TO CONTROVERT THE SAME . THEREFORE, NO FAULT COULD BE FOUND IN THE IMPUGNED ORDER, IN THIS REGAR D. CONCLUSION 10. THE REVENUES APPEAL STAND DISMISSED. THE ASSES SEES APPEAL STAND PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 03 RD MARCH, 2021 SD/- SD/- (AMARJIT SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER UNION BANK OF INDIA ASSESSMENT YEAR: 2010-11 11 MUMBAI; DATED : 03/03/2021 S R.PS, JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. !#% / THE APPELLANT 2. &'#% / THE RESPONDENT 3. - ( ! ) / THE CIT(A) 4. - / CIT CONCERNED 5. ./& 0 , ! 0 , / DR, ITAT, MUMBAI 6. /12 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.