Jila Sahakari Kendriya Bank Maryadit, Mandsaur V. Deputy Commissioner of Income Tax , Ratlam

ITA 562/Ind/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5117 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 10-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LALCHAND
• Assessee Lawyers: S S DESHPANDE
• Section: 37

Judgement Text

JILA SAHAKARI KENDRIYA BANK ITA NO.562 OF 2017 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO. 562/IND/2017 A.Y. 2013-14 JILA SAHAKARI KENDRIYA BANK MARYADIT, MANDSAUR PAN AAATJ 2383 F :: APPELLANT VS DCIT-RATLAM :: RESPONDENT ASSESSEE BY SHRI S.S. DESHPANDE, CA RESPONDENT BY SHRI LAL CHAND, CIT DATE OF HEARING 11.10.2018 DATE OF PRONOUNCEMENT 23.10.2018 O R D E R PER SHRI KUL BHARAT, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF LD. CIT(A)-UJJAIN, DATED 02.5.2017 FOR THE ASSESSMENT Y EAR 2013-14. 2. SO FAR AS GROUND NO.1 REGARDING THE CONFIRMATION OF THE ADDITION OF RS.7,48,50,000/- ON ACCOUNT OF PROVISION OF OVERDUE INTEREST IS CONCERNED, BRIEF FACTS GIVING RISE TO THE GROUND AR E THAT THE ASSESSEE HAS MADE THE PROVISION FOR OVERDUE INTEREST AMOUNTI NG TO JILA SAHAKARI KENDRIYA BANK ITA NO.562 OF 2017 2 RS.7,48,50,000/-. THE ASSESSING OFFICER AND LD. CIT (A) WERE OF THE VIEW THAT THE ASSESSEE FAILED TO SPECIFY UNDER WHICH SEC TION THE SAME PROVISION IS ALLOWABLE. THE EXPENSES PROVISION IN T HE P & L ACCOUNT AS PER THE RBI NORMS CANNOT BE TREATED AS DEDUCTIBLE E XPENDITURE U/S 36(1)(VII) OR (VIIA) OF THE I.T. ACT. THE RESERVE B ANK NORMS HAVE NOTHING TO DO WITH COMPUTATION OF TAXABLE INCOME UNDER I.T. ACT. THEREFORE, THE ASSESSEE IS BEFORE US. 3. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THIS ISSUE ON SIMILAR FACTS AND CIRCUMSTANCES HAS ALREAD Y BEEN DECIDED AGAINST THE REVENUE BY THIS VERY BENCH IN THE CASE OF THE DISTRICT CENTRAL CO-OPERATIVE BANK LTD. VS. ACIT VIDE ORDER DATED 26.9.2018 IN ITA NO.47/IND/2014 (COPY OF THE ORDER HAS BEEN FILE D BEFORE US). ON THE OTHER HAND, LD. CIT/DR CONCEDED THE FACT THAT THE I SSUE IS COVERED VIDE AFORESAID ORDER OF THE ITAT AGAINST THE REVENUE. 4. CONSIDERING THE RIVAL SUBMISSIONS AND THE FACT T HAT THE ISSUE ON IDENTICAL FACTS AND CIRCUMSTANCES IS COVERED VIDE O UR ORDER DATED 26.9.2018 (SUPRA) AGAINST THE REVENUE, WE DIRECT TH E ASSESSING OFFICER TO DELETE THE ADDITION. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 5. SO FAR AS GROUND NO.2 WITH REGARD TO CONFIRMATIO N OF THE ADDITION OF RS.2 CRORES BEING THE SPECIAL RESERVE CREATED BY TH E ASSESSEE IS JILA SAHAKARI KENDRIYA BANK ITA NO.562 OF 2017 3 CONCERNED, THE BRIEF FACTS GIVING RISE TO THE GROUN D ARE THAT THE ASSESSING OFFICER AND LD. CIT(A) WERE OF THE VIEW T HAT THE EXPENDITURE CLAIMED BY THE ASSESSEE AS SPECIAL PROVISION AMOUNT ING TO RS.2 CRORES CANNOT BE TREATED AS EXPENDITURE IN THE NORMAL COUR SE OF THE BUSINESS. THERE IS NO PROVISION OF ALLOWABILITY U/S 36 OR U/S 37 OF THE I.T. ACT. THE PROVISION AND EXPENSES IN THE P & L ACCOUNT AS PER RBI NORMS CANNOT BE TREATED AS DEDUCTIBLE EXPENDITURE U/S 36(1)(VIIA ) OF THE I.T. ACT. THE SECTION 36(1)(VIIA) ALLOW THE DEDUCTION OF ACTUAL B AD DEBTS ONLY NOT ON THE BASIS OF PROVISION. BEING AGGRIEVED, THE ASSESS EE IS BEFORE US. 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THIS ISSUE ON SIMILAR FACTS AND CIRCUMSTANCES HAS ALREAD Y BEEN DECIDED AGAINST THE ASSESSEE BY THIS VERY BENCH IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2012-13 VIDE ORDER DATED 17.8.2018 IN ITA NO.386/IND/2017 (COPY OF THE ORDER HAS BEEN FILED B EFORE US). ON THE OTHER HAND, LD. CIT/DR CONCEDED THE FACT THAT THE I SSUE IS COVERED VIDE AFORESAID ORDER OF THE ITAT AGAINST THE ASSESSEE. 7. CONSIDERING THE RIVAL SUBMISSIONS AND THE FACT T HAT THE ISSUE ON IDENTICAL FACTS AND CIRCUMSTANCES IS COVERED IN ASS ESSEES OWN CASE FOR THE ASSESSMENT YEAR 2012-13 VIDE OUR ORDER DATED 17 .8.2018 (SUPRA) AGAINST THE ASSESSEE, WE CONFIRM THE ORDER OF THE L D. CIT(A) ON THIS ISSUE. ACCORDINGLY, THIS GROUND OF APPEAL OF THE AS SESSEE IS DISMISSED. JILA SAHAKARI KENDRIYA BANK ITA NO.562 OF 2017 4 FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 23.10.20 18. SD/- (MANISH BORAD) ACCOUNTANT MEMBER SD/- ( KUL BHARAT) JUDICIAL MEMBER DATED : 23.10.2018 !VYAS! COPY TO: ASSESSEE/RESPONDENT/CIT(A)/CIT/DR, INDORE