M/s Suvarna Co-operative Bank Ltd, Bangalore V. Assistant Commissioner of Income-Tax, Bangalore

ITA 379/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7420 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 20-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K BIJU
• Assessee Lawyers: LOKESH JAIN
• Keywords: Bad and doubtful debts
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORESHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AN D SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO. 379 / BANG/201 7 ASSESSMENT YEAR : 20 12 - 13 M/S. SUVARNA CO-OPERATIVE BANK LTD., # 62, SANJEEVAPPA LANE, AVENUE ROAD CROSS, BANGALORE 560 002. PAN: AAAAS 9084R VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2(3)(1), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI LOKESH JAIN, CA REVENUE BY : SHRI M.K. BIJU, JCIT (DR) DATE OF HEARING : 19 . 10 .201 7 DATE OF PRONOUNCEMENT : 31 .10 .2017 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE O RDER OF CIT(A)-5, BANGALORE DATED04.11.2016 FOR ASSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE LEARNED CIT (A) IS OPPOSED TO L AW, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE ORDER IS PASSED IN HASTE, WITHOUT PROVIDING SUFFICIENT AND REASONABLE OPPORTUNITY OFBEING HEARD. 3. THE ORDER IS PASSED AGAINST THE PRINCIPLE OF NAT URAL JUSTICE AND THUS LIABLE TO BE QUASHED. 4. THE ORDER OF THE LD. CIT(A) IS WITHOUT JURISDICT ION. AMORTIZATION OF PREMIUM PAID ON INVESTMENT 5. THE LD. CIT(A) ERRED IN LAW AND ON FACT BY CONFI RMING THE DISALLOWANCE OF RS. 28,35,638/- BEING AMORTIZATION OF PREMIUM PAID ON INVESTMENTS HELD BY THE APPELLANT UNDER THE HEAD 'HELD TO MATURITY'. 6. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT TH E APPELLANT BEING A CO-OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF B ANKING IS BOUND BY ITA NO. 379/BANG/2017 PAGE 2 OF 8 THE INCOME RECOGNITION NORMS ISSUED BY THE RBI. 7. THE LD. CIT(A) AND THE LD. AO GROSSLY ERRED IN I GNORING THE RELEVANT CIRCULAR AND INSTRUCTION ISSUED BY THE CEN TRAL BOARD OF DIRECT TAXES (THE CBDT) AS PER WHICH PREMIUM PAID O N INVESTMENTS UNDER HTM CATEGORY SHALL BE AMORTIZED OVER THE PERI OD REMAINING TO MATURITY. SUCH PREMIUM WOULD BE ALLOWABLE AS REVEN UE EXPENDITURE. 8. THE LD. CIT(A) AND THE LD. AO OUGHT TO HAVE APPR ECIATED THAT THE IMPUGNED TREATMENT OF PREMIUM PAID ON INVESTMENTS C ATEGORIZED AS 'HELD TO MATURITY' HAVE BEEN CONSISTENTLY FOLLOWED BY THE APPELLANT. THEREFORE, THIS OUGHT NOT TO HAVE BEEN DISTURBED. CURRENCY FLUCTUATION FUND 9. THE LD. AO ERRED IN DISALLOWING THE PROVISION AM OUNTING TO RS. 4,61,150/- CLAIMED BY THE APPELLANT TOWARDS THE CUR RENCY FLUCTUATION FUND. 10. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT T HE APPELLANT BEING A CO-OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF B ANKING IS BOUND BY THE GUIDELINES ISSUED BY THE RBI. 11. THE LD. CIT(A) AND THE LD. AO ERRED IN DISREGAR DING THE RELEVANT CIRCULAR AND THE INSTRUCTION ISSUED BY THE CBDT IN THIS REGARD. PROVISION FOR STANDARD ASSETS 12. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT BY CONFIRMING THE DISALLOWANCE OF RS. 5,67,012/- MADE BY THE LD. AO O N ACCOUNT OF PROVISION FOR STANDARD ASSETS. 13. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT T HE APPELLANT BEING A CO-OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF B ANKING IS BOUND BY THE NORMS ISSUED BY THE RBI FOR CREATION OF PROVISI ON FOR STANDARD ASSETS. 14. THE LD. CIT(A) AND THE LD. AO ERRED IN DISREGAR DING THE RELEVANT CIRCULAR AND THE INSTRUCTION ISSUED BY THE CBDT IN THIS REGARD. 15. THE LD. CIT(A) ERRED IN RELYING ON THE DECISION S OF THE HON'BLE SUPREME COURT IN THE CASE OF PUNE ELECTRIC SUPPLY L TD. VS CIT AND IN THE CASE OF VIJAYA BANK VS. CIT AS THEY ARE DISTING UISHABLE FROM THE FACTS OF THE PRESENT CASE. THE APPELLANT SEEKS YOUR LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE GROUNDS URGED AT THE TIME OF HEARING. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT GROU ND NOS. 1 TO 4 ARE GENERAL AND HENCE, NO SEPARATE ADJUDICATION IS CALLED FOR IN RE SPECT OF THESE GROUNDS. ITA NO. 379/BANG/2017 PAGE 3 OF 8 4. REGARDING GROUND NOS. 5 TO 8, IT WAS SUBMITTED T HAT ONLY ONE ISSUE IS INVOLVED IN THESE GROUNDS AND THAT IS REGARDING ALLOWABILITY OF RS. 28,35,638/- BEING AMORTIZATION OF PREMIUM PAID ON INVESTMENT HELD BY THE ASSESSEE UNDER THE HEAD HELD TO MATURITY. HE SUBMITTED WRITTEN SUBMI SSIONS IN RESPECT OF ALL THE ISSUES RAISED BEFORE THE TRIBUNAL AND AS PER THE SA ME, IN RESPECT OF THIS ISSUE, THE ASSESSEE IS RELYING ON INSTRUCTION NO. 17/2008 DATED 26.11.2008 AND RELEVANT PORTION OF WHICH HAS BEEN PRODUCED IN WRIT TEN SUBMISSIONS. RELIANCE HAS ALSO BEEN PLACED ON FOLLOWING JUDICIAL PRONOUNC EMENTS. A) ACIT VS. M/S. TUMKURVEERASHIVA CO-OPERATIVE BANK LTD. IN ITA NO. 1174/BANG/2014 DATED 16.10.2015 COPY OF THIS TRIBUN AL ORDER HAS BEEN ENCLOSED WITH WRITTEN SUBMISSIONS AS PER ANNEXURE 2. B) M/S. NATIONAL CO-OPERATIVE BANK LTD. VS. JCIT IN ITA NOS. 1090(BANG.)/2010 & 7(BANG.)/2011 DATED 11.05.2012, COPY ENCLOSED AS PER ANNEXURE 3. C) THE S.K. DIST. CENTRAL VS. ACIT IN ITA NOS. 3268 -3269/AHD/2015 DATED 26.02.2016, COPY ENCLOSED AS PER ANNEXURE 4 . D) CATHOLIC SYRIAN BANK LTD. VS. ACIT IN 38 SOT 553 (COCHIN) E) THE KHANAPUR CO-OP BANK LTD. VS. ITO IN ITA NO. 141/PNJ/2011 DATED 08.09.2011, COPY NOT ENCLOSED. F) CORPORATION BANK VS. ACIT IN ITA NO. 112/BANG/20 08(BANG), COPY NOT ENCLOSED. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF AUTHOR ITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE AO HAS FOLLOWED THE JUDGMENT OF HONBLE MADRAS HIGH COURT RENDERED IN THE CASE OF TN POWER FINANCE AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD. VS. JCIT AS REPORTED IN 280 ITR 491(MAD) AND THEREFORE, FIRST WE CONSIDE R THE APPLICABILITY OF THIS JUDGMENT BEFORE EXAMINING THE APPLICABILITY OF VARI OUS TRIBUNAL ORDERS CITED BY THE LD. AR OF ASSESSEE BEFORE US. IN THIS CASE, TH E ISSUE INVOLVED BEFORE THE HONBLE MADRAS HIGH COURT WAS THIS AS TO WHETHER TH E TRIBUNAL IS CORRECT IN UPHOLDING THE ORDER OF CIT(A) ALLOWING FOR PROVISIO NS FOR NON PERFORMING ASSETS WHICH WERE DEBITED TO P & L ACCOUNT AND REGARDING T HIS ISSUE, IT WAS HELD BY HONBLE MADRAS HIGH COURT THAT RBI DIRECTIONS CANNO T OVERRIDE MANDATORY PROVISIONS OF ACT CONTAINED IN SECTION 36(1)(VIIA)O F IT ACT. HENCE, IT IS SEEN THAT ITA NO. 379/BANG/2017 PAGE 4 OF 8 IN THIS CASE, THE ISSUE BEFORE HONBLE MADRAS HIGH COURT WAS NOT REGARDING AMORTIZATION OF PREMIUM PAID ON INVESTMENT. HENCE, IN OUR CONSIDERED OPINION THIS JUDGMENT OF HONBLE MADRAS HIGH COURT IS NOT A PPLICABLE IN THE PRESENT CASE PARTICULARLY IN VIEW OF THIS FACT THAT THE CLA IM OF THE ASSESSEE FOR DEDUCTION IS NOT AS PER RBI GUIDELINES BUT AS PER THE CBDT CI RCULAR NO. 17/2008 DATED 26.11.2008. AND THEREFORE, WE PROCEED TO EXAMINE TH E APPLICABILITY OF VARIOUS TRIBUNAL ORDERS ON WHICH RELIANCE HAS BEEN PLACED B Y LD. AR OF ASSESSEE. 6. THE FIRST TRIBUNAL ORDER ON WHICH RELIANCE HAS B EEN PLACED IS THE TRIBUNAL ORDER RENDERED IN THE CASE OF ACIT VS. M/S. TUMKURVEERASH IVA CO-OPERATIVE BANK LTD.(SUPRA). IN THIS CASE, IT WAS NOTED BY TRIBUNA L IN PARA NO. 12 OF THE TRIBUNAL ORDER THAT TO COMPLY WITH THE STATUTORY REQUIREMENT S OF INVESTING CERTAIN PORTION OF ASSESSEES FUNDS IN SLR SECURITIES, THE ASSESSEE HAS PURCHASED GOVERNMENT SECURITIES FROM OPEN MARKET BY PAYING PR EMIUM ON FACE VALUE OF THE SECURITIES WHICH WAS AMORTISED OVER THE PERIOD OF SECURITY AS PER THE CIRCULAR ISSUED BY RBI ON 12.02.2005. THE TRIBUNAL IN THIS CASE HAS FOLLOWED VARIOUS OTHER TRIBUNAL ORDERS WHICH ARE CITED BEFOR E US I.E. THE TRIBUNAL ORDER RENDERED IN THE CASE OF SIR. M. VISWESWARAYA CO-OP BANK LTD. VS. JCIT IN ITA NO. 1122/BANG/2010,CATHOLIC SYRIAN BANK LTD. VS. AC IT (SUPRA), THE KHANAPUR CO-OP BANK LTD. VS. ITO(SUPRA), CORPORATIO N BANK VS. ACIT (SUPRA) AND THEREAFTER DECIDED THE ISSUE IN FAVOUR OF THE A SSESSEE BY FOLLOWING THESE TRIBUNAL ORDERS OF COORDINATE BENCH. IN THE PRESEN T CASE, THIS EVIDENCE IS NOT BROUGHT ON RECORD BY THE LEARNED AR OF THE ASSESSEE THAT THE INVESTMENTS WERE PURCHASES TO COMPLY WITH THE STATUTORY REQUIREMENTS TO INVEST CERTAIN PORTION OF ITS FUNDS IN SLR SECURITIES. IN THE ABSENCE OF THI S, MERELY ON THE BASIS OF THIS TRIBUNAL ORDER, IT CANNOT BE HELD THAT THE DEDUCTIO N IS ALLOWABLE. 7. NOW WE EXAMINE THE APPLICABILITY OF THE SECOND T RIBUNAL ORDER CITED BEFORE US HAVING BEEN RENDERED IN THE CASE OF M/S. NATIONAL C O-OPERATIVE BANK LTD. VS. JCIT(SUPRA). IN THIS CASE ALSO, THIS WAS NOTED THA T THE INVESTMENT WAS MADE AS PER THE PRUDENTIAL NORMS OF THE RBI. HENCE, AS PER THIS TRIBUNAL ORDER ALSO, THIS IS NECESSARY TO FIND OUT THIS FACTUAL ASPECT THAT W HETHER THE INVESTMENT IS TO COMPLY WITH PRUDENTIAL NORMS OF RBI AND THE MATTER IS REQUIRED TO BE RESTORED BACK TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER EXAMINING THIS FACTUAL ASPECT. ITA NO. 379/BANG/2017 PAGE 5 OF 8 8. THE NEXT TRIBUNAL ORDER CITED BEFORE US IS TRIBU NAL ORDER RENDERED IN THE CASE OF THE S.K. DIST. CENTRAL VS. ACIT (SUPRA). IN THIS C ASE, THE TRIBUNAL HAS FOLLOWED THE JUDGEMENT OF HONBLE GUJARAT HIGH COURT RENDERE D IN THE CASE OF CIT VS. RAJKOT DIST. CENTRAL CO-OPERATIVE BANK AS REPORTED IN 222 TAXMAN 240 (GUJ). IN THIS CASE, IT IS NOTED BY TRIBUNAL IN PARA NO. 6 OF THE JUDGMENT THAT THE ASSESSEE AS A CO-OPERATIVE BANK WAS BOUND BY THE RB I DIRECTIONS AND AS PER THE DIRECTIONS, THE ASSESSEE HAS TO INVEST CERTAIN AMOUNTS IN GOVERNMENT SECURITIES AND TO HOLD THE SAME TILL MATURITY AND THEREFORE, IT WAS HELD THAT IF IN THE PROCESS OF ACQUISITION, ANY PREMIUM WAS PAID ON THE FACE VALUE OF THE SECURITY, LOSS HAS TO BE AMORTIZED IN VIEW OF PARA VII OF CBDT CIRCULAR NO. 17/2008 DATED 26.11.2008. HENCE, IT IS SEEN THAT A S PER THE JUDGMENT OF HONBLE GUJARAT HIGH COURT WHICH WAS FOLLOWED BY TH E TRIBUNAL IN THIS CASE, IF THE PREMIUM IS PAID IN RESPECT OF INVESTMENT FOR SL R SECURITIES THEN SUCH PREMIUM PAID HAS TO BE AMORTIZED. WE HAVE ALREADY NOTED THAT IN THE PRESENT CASE, THIS FACT IS NOT BORNE OUT FROM THE RECORDS A ND THEREFORE, THE MATTER HAS TO GO BACK TO THE FILE OF CIT(A) FOR FRESH DECISION AF TER FINDING OUT FACTUAL POSITION IN THIS ASPECT. 9. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE TH E ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE FOR FRESH DECISION WITH THE DIRECTION THAT HE HAS TO FIND OUT AS TO WHETHER THE INVESTMENT IN QUESTION WAS RE QUIRED TO COMPLY WITH STATUTORY REQUIREMENT OF SLR SECURITIES AND IF THAT IS SO THEN THE CLAIM OF THE ASSESSEE SHOULD BE ALLOWED AS PER THE JUDGMENT OF H ONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS. RAJKOT DIST. CENTRA L CO-OPERATIVE BANK(SUPRA). IF THE ASSESSEE FAILS TO ESTABLISH THIS THEN THE IS SUES SHOULD BE DECIDED AFRESH AS PER LAW.THESE GROUNDS ARE ALLOWED FOR STATISTICA L PURPOSES. 10. GROUND NOS. 9 TO 11 ARE IN RESPECT OF ONE ISSUE THAT IS CURRENCY FLUCTUATION FUND. REGARDING THIS ISSUE, IN WRITTEN SUBMISSIONS FILED BY LD. AR OF ASSESSEE, RELIANCE HAS BEEN PLACED ON THE CBDT CIRCULAR NO. 1 7/2008 DATED 26.11.2008. THE RELEVANT PORTION OF THIS CBDT INSTRUCTION IS RE PRODUCED AT PAGE NO. 10 OF THE WRITTEN SUBMISSIONS AS PER WHICH IT IS STATED T HAT SECTION 37 OF IT ACT ENVISAGES THAT AN AMOUNT DEBITED TO P & L ACCOUNT I N RESPECT OF AN ACCRUED OR ITA NO. 379/BANG/2017 PAGE 6 OF 8 ASCERTAINED LIABILITY ONLY IS AN ADMISSIBLE DEDUCTI ON. HENCE, AT THIS JUNCTURE, THE BENCH ASKED THE ASSESSEE TO ESTABLISH THAT THIS IS A PROVISION IN RESPECT OF AN ACCRUAL OR ASCERTAINABLE LIABILITY. THE LD. AR OF ASSESSEE COULD NOT BRING ANY EVIDENCE ON RECORD IN THIS REGARD. THE LD. DR OF R EVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE A LSO FIND THAT ON PAGE NO. 3 OF THE ASSESSMENT ORDER, IT IS NOTED BY THE AO THAT TH E ASSESSEE WAS ASKED TO SHOW CAUSE AS TO HOW THIS EXPENDITURE IS ALLOWABLE BECAUSE AS PER THE AO, THIS IS A APPROPRIATION OF PROFIT. THE AO HAS NOTED THA T THERE WAS NO REPLY FROM THE ASSESSEE. IN SPITE OF THIS CATEGORICAL FINDING OF AO, NOTHING IS PLACED BEFORE THE CIT(A) OR BEFORE US AS TO HOW THIS CLAIM OF THE ASS ESSEE IS AN ALLOWABLE EXPENSES. THE CBDT CIRCULAR NO. 17/2008 DATED 26.1 1.2008 IS ON THIS ASPECT THAT THE AMOUNT DEBITED IN P & L ACCOUNT IN RESPECT OF AN ACCRUED OR ASCERTAINED LIABILITY ONLY IS AN ADMISSIBLE DEDUCTI ON. THERE IS NO QUARREL ON THIS ASPECT BUT THE DISPUTE IS AS TO WHETHER THIS AMOUNT DEBITED IN P & L ACCOUNT IS IN RESPECT OF AN ACCRUED OR ASCERTAINED LIABILITY W HICH IS INCURRED FOR THE PURPOSE OF BUSINESS. SINCE NO EVIDENCE HAS BEEN PL ACED ON THIS FACTUAL ASPECT, WE FIND NO MERIT IN THE SUBMISSIONS OF THE LEARNED AR OF THE ASSESSEE ON THIS ISSUE AND THEREFORE, WE DECLINE TO INTERFER E IN THE ORDER OF CIT(A) ON THIS ISSUE. ACCORDINGLY THESE GROUNDS ARE REJECTED. 12. THE REMAINING GROUND NOS. 12 TO 15 ARE IN RESPE CT OF ONE ISSUE I.E. PROVISION FOR STANDARD ASSETS. ON THIS ISSUE, THIS IS THE CONTEN TION RAISED BY THE LD. AR OF ASSESSEE IN THE WRITTEN SUBMISSIONS FILED BEFORE US THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL ORDER RENDER ED IN THE CASE OF THE DEPUTY COMMISSIONER OF INCOME TAX VS. THE LITTLE KANCHEEPU RAM CO-OPERATIVE URBAN BANK LTD. IN ITA NOS. 23 & 24/MDS/2013, COPY AVAILA BLE IN ANNEXURE-5 OF WRITTEN SUBMISSIONS. THE LD. DR OF REVENUE SUPPORT ED THE ORDER OF AUTHORITIES BELOW. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT AS PER THE TRIBUNAL ORDER CITED BY LD. AR OF ASSESSEE BEFORE US, IT WAS HELD THAT THE DEDUCTION IS ALLOWABLE IN RESPECT OF LOWER OF PROVISION FOR DOUB TFUL DEBTS IN THEIR ACCOUNTS OR ITA NO. 379/BANG/2017 PAGE 7 OF 8 THE AMOUNT AS PER SECTION 36(1)(VII)(A), WHICHEVER IS LESS. HENCE WE EXAMINE THE PROVISIONS OF SECTION 36(1)(VII)(A) OF THE I.T. ACT, 1961. AS PER THE PROVISIONS OF SECTION 36(1)(VII)(A) OF THE IT ACT, DEDUCTION IS ALLOWABLE IN RESPECT OF PROVISIONS OF BAD AND DOUBTFUL DEBTS MADE BY A C O-OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK TO THE EXTENT OF AN AMOUNT N OT EXCEEDING 7 % OF THE TOTAL INCOME COMPUTED BEFORE MAKING ANY DEDUCTION U NDER THIS CLAUSE AND CHAPTER VIA AND AN AMOUNT NOT EXCEEDING 10% OF THE AGGREGATE AVERAGE ADVANCES MADE BY THE RURAL BRANCHES OF SUCH BANK CO MPUTED IN THE PRESCRIBED MANNER. HENCE AS PER THE PROVISION OF THIS SECTION , DEDUCTION IS ALLOWABLE TO THE EXTENT OF 10% OF AGGREGATE AVERAGE ADVANCES MAD E BY THE RURAL BRANCHES OF SUCH BANK. THE ASSESSEE HAS NOT SHOWN THAT THER E WAS ANY ADVANCE MADE BY THE RURAL BRANCHES OF THE ASSESSEE BANK, IF ANY. IN THE TRIBUNAL ORDER CITED BEFORE US, IT WAS NOTED BY TRIBUNAL IN PARA NO. 3 T HAT THE CLAIM WAS REGARDING 10% OF THE AGGREGATE AVERAGE ADVANCES GIVEN BY THE RURAL BRANCHES OF THAT ASSESSEE U/S. 36(1)(VII)(A) OF THE IT ACT. THIS IS ALSO NOTED BY TRIBUNAL IN SAME PARA THAT THE ASSESSEE BANK WAS HAVING TWO BRANCHES BEING ONE AT KANCHEEPURAM TOWN AND ONE AT AYYEMPETTAIAND THE SEC OND BRANCH WAS A RURAL BRANCH. ON THIS BASIS, IT WAS THE CLAIM OF T HE ASSESSEE THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S. 36(1)(VII)(A). SINC E IN THE PRESENT CASE, THE ASSESSEE HAS NOT ESTABLISHED THAT THERE ARE ADVANCE S BY A RURAL BRANCH OF THE ASSESSEE BANK, NO DEDUCTION IS ALLOWABLE UNDER THIS SECTION. HENCE THIS ISSUE IS DECIDED AGAINST THE ASSESSEE. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 31 ST OCTOBER, 2017. /MS/ ITA NO. 379/BANG/2017 PAGE 8 OF 8 COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.