Asstt. Commissioner of Income Tax, Jalandhar V. M/s Punjab Gramin Bank, Jalandhar

ITA 569/ASR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8721 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-01-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 18-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RANJAN SEHGAL
• Keywords: Business expenditure; Bad and doubtful debts
• Section: 43B; 37(1); 37; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JALANDH AR ) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NOS.583 & 584(ASR)/2015 ASSESSMENT YEAR: 2010-11 PAN: AAALP0309F M/S. PUNJAB GRAMIN BANK, JALANDHAR ROAD, KAPURTHALA. VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-IV, JALANDHAR (APPELLANT) (RESPONDENT) I.T.A NO.580 (ASR)/2015 ASSESSMENT YEAR: 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -IV, JALANDHAR. VS. M/S. PUNJAB GRAMIN BANK, JALANDHAR ROAD, KAPURTHALA (APPELLANT) (RESPONDENT) I.T.A NOS.569 (ASR)/2016 ASSESSMENT YEAR: 2012-13 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE -4, JALANDHAR. VS. M/S. PUNJAB GRAMIN BANK, JALANDHAR ROAD, KAPURTHALA. (APPELLANT) (RESPONDENT) I.T.A NOS.597 (ASR)/2016 ASSESSMENT YEAR: 2012-13 M/S. PUNJAB GRAMIN BANK, JALANDHAR ROAD, KAPURTHALA. VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE -4, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. PAWAN KUMAR, CIT (D R.) RESPONDENT BY: SH. RANJAN SEHGAL (CA) DATE OF HEARING: 23.01.2017 DATE OF PRONOUNCEMENT: 15.03.201 7 ITA NOS.583, 584 & 580(ASR)/2015 ASST. YEARS: 2010-11, 2011-12 ITA NOS.569 & 597(ASR)/2016 ASST.YEAR: 2012-13 2 ORDER PER T. S. KAPOOR (AM): THIS IS A BUNCH OF FIVE APPEALS FOR THREE ASSESSMEN T YEAR AGAINST THE SEPARATE ORDERS OF LD. CIT(A) DATED 18.08.2015 FOR ASST. YEAR 2010- 11 & 2011-12 AND DATED 30.09.2016 FOR ASST. YEAR: 2 012-13. ITA NO. 583(ASR)/2015 FOR ASST. YEAR2010-11 HAS BEEN FILED BY ASSESSEE WHEREAS THE OTHER FOUR APPEALS ARE CROSS APPEALS FILED BY A SSESSEE AS WELL AS BY REVENUE. 2. THESE APPEALS WERE HEARD ALTOGETHER AND COMMON I SSUES ARE INVOLVED IN THESE APPEALS AND THEREFORE FOR THE SAK E OF CONVENIENCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. 3. THE GRIEVANCE OF ASSESSEE IN ITS APPEALS IS THAT LD. CIT(A) HAD MADE OUT A NEW CASE AND HAD CONFIRMED THE ADDITION U/S 43B(F) OF THE INCOME-TAX ACT WITHOUT AFFORDING AN OPPORTUNITY TO THE ASSESSEE, WHEREAS THE ASSESSING OFFICER HAD MADE ADDITION U/S 37 OF THE ACT. 4. THE GROUNDS OF APPEAL RAISED BY ASSESSEE AS WELL AS BY REVENUE ARE REPRODUCED BELOW. APPEALS BY REVENUE (I) IN ITA NO. 580 (ASR)/ 2015. 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 48,26,000/- MADE BY THE ASSESSING OFFICER BY DISALLOWING THE PROVISI ON FOR STANDARD ASSETS. 1(A). WHILE ALLOWING THE RELIEF OF RS. 48,26,000/- LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSING OFFICER HAS CLEARLY H ELD OUT OF PROVISION OF RS. 1,33,55,468/- ONLY RS. 85,29,468 WERE ON A/C OF BAD AND DOUBTFUL DEBTS AND THE BALANCE AMOUNT OF RS. 48,26,000/- WER E ON A/C OF ITA NOS.583, 584 & 580(ASR)/2015 ASST. YEARS: 2010-11, 2011-12 ITA NOS.569 & 597(ASR)/2016 ASST.YEAR: 2012-13 3 STANDARDS ASSETS AND AS PEER PROVISION OF SECTION 3 6 (1) (VIIA) ONLY PROVISION FOR BAD AND DOUBTFUL DEBTS WAS ALLOWABLE AS DEDUCTION. 1(B). WHILE ALLOWING THE RELIEF OF RS. 48,26,000/- LD. CIT(A) FAILED TO APPRECIATE THAT IT WAS CONTINGENT LIABILITY AND WAS NOT ALLOWABLE AS BUSINESS EXPENDITURE. 2. IT IS PRAYED THAT THE ORDER OF THE LD. COMMISSIO NER OF INCOME TAX (APPEALS) BE SET ASIDE AND THAT OF THE ASSESSING OF FICER BE RESTORED. 3. THE APPELLANT REQUESTS FOR LEAVE TO ADD OR AMEND OR ALTER THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. (II) IN ITA NO. 569(ASR)2016. 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 91,52,000/- MADE BY THE ASSESSING OFFICER BY DISALLOWING THE PROVISI ON FOR STANDARD ASSETS. 2. THAT WHILE ALLOWING THE RELIEF OF RS. 91,52,000/ - LD. CIT(A) HAS NOT APPRECIATED THAT THE ASSESSING OFFICER HAS CLEARLY HELD THAT OUT OF PROVISION OF RS. 5,88,36,000/- ONLY RS. 4,96,84,000 /- WERE ON ACCOUNT OF BAD AND DOUBTFUL DEBTS AND THE BALANCE AMOUNT OF RS . 91,52,000/- WAS ON ACCOUNT OF STANDARD ASSETS AND AS PER PROVISIONS OF SECTION 36(1) (VIIA) ONLY PROVISION FOR BAD AND DOUBTFUL DEBTS WAS ALLOW ABLE AS DEDUCTION. 3. THAT WHILE ALLOWING THE RELIEF OF RS. 91,52,000/ - LD. CIT(A) HAS FAILED TO APPRECIATE THAT IT WAS CONTINGENT LIABILITY AND WAS NOT ALLOWABLE AS BUSINESS EXPENDITURE. 4. IT IS PRAYED THAT THE ORDER OF THE LD. COMMISSIO NER OF INCOME TAX (APPEAL) BE SET ASIDE AND THAT OF THE ASSESSING OFF ICER BE RESTORED. 5. THE APPELLANT REQUESTS FOR LEAVE TO ADD OR AMEND OR ALTER THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. APPEAL BY ASSESSEE (I) IN ITA NO.583 & 584 (ASR)/ 2015. 1. THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING TH E FACTS OF THE CASE AND PROVISIONS OF LAW IN ITS ACTUAL SPIRIT. 2. THE LD. CIT(A) HAS ERRED IN CONFIRMING ADDITION OF PREMIUM PAID TO LIC UNDER GROUP LEAVE ENCASHMENT SCHEME POLICY UNDER SE CTION 43B(F) OF INCOME TAX ACT WITHOUT GIVING OPPORTUNITY BECAUSE A DDITION WAS MADE BY THE ASSESSING OFFICER UNDER SECTION 37 OF INCOME TA X ACT. 3. THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT REGARDING PAYMENT OF PREMIUM TO LIC UNDER GROUP LEAVE ENCASHMENT SCHE ME POLICY BY THE APPELLANT ASSESSEE FOR GETTING ITSELF INSURED AGAIN ST LIABILITY OF LEAVE ENCASHMENT TOWARDS IT EMPLOYEES. 4. THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE APPELLANT ASSESSEE HAS ACTUALLY PAID THE AMOUNT WHICH WILL BE COME PAYABLE TO ITS EMPLOYEES ON ACCOUNT OF LEAVE ENCASHMENT, TO LIC UN DER A VALID INSURANCE ITA NOS.583, 584 & 580(ASR)/2015 ASST. YEARS: 2010-11, 2011-12 ITA NOS.569 & 597(ASR)/2016 ASST.YEAR: 2012-13 4 POLICY AND PROVISIONS OF SECTION 43B(F) OF INCOME T AX ACT ARE NOT ATTRACTED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE APPELLANT ASSESSEE LEAVE TO RAISE AND URGE A NY OTHER GROUND OF APPEAL AS MAY BE DEEMED PROPER AT THE TIME OF HEARI NG. (III) IN ITA NO. 597(ASR)/ 2016 1. THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING TH E FACTS OF THE CASE AND PROVISIONS OF LAW IN ITS ACTUAL SPIRIT. 2. THE LD. CIT(A) HAS ERRED IN CONFIRMING ADDITION OF PREMIUM PAID TO LIC UNDER GROUP LEAVE ENCASHMENT SCHEME POLICY UNDER SE CTION 43B(F) OF INCOME TAX ACT WITHOUT GIVING OPPORTUNITY BECAUSE A DDITION WAS MADE BY THE ASSESSING OFFICER UNDER SECTION 37 OF INCOME TA X ACT. 3. THE LD. CIT(A) HAS ERRED IN NOTE APPRECIATING TH E FACT REGARDING PAYMENT OF PREMIUM TO LIC UNDER GROUP LEAVE ENCASHMENT SCHE ME POLICY BY THE APPELLANT ASSESSEE FOR GETTING ITSELF INSURED AGAIN ST LIABILITY OF LEAVE ENCASHMENT TOWARDS ITS EMPLOYEES. 4. THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE APPELLANT ASSESSEE HAS ACTUALLY PAID THE AMOUNT WHICH WILL BE COME PAYABLE TO ITS EMPLOYEES ON ACCOUNT OF LEAVE ENCASHMENT, TO LIC UN DER A VALID INSURANCE POLICY AND PROVISIONS OF SECTION 43B(F) OF INCOME T AX ACT ARE NOT ATTRACTED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE BRIEF FACTS OF THE CASES AS NOTED IN THE ASS ESSMENT ORDER ARE THAT THE ASSESSEE IS A COOPERATIVE SOCIETY AND IS E NGAGED IN THE BUSINESS OF BANKING. DURING ASSESSMENT PROCEEDINGS, THE ASSE SSING OFFICER OBSERVED THAT ASSESSEE HAD MADE A PROVISION FOR LEA VE ENCASHMENT AND HAD CLAIMED A DEDUCTION FOR PAYMENT OF INSURANCE PR EMIUM TO LIC OF INDIA AND BAJAJ ALIANZE. THE ASSESSING OFFICER HELD THAT THE PAYMENT OF POLICIES ISSUED BY LIC AND BAJAJ ALIANZE WERE AN IN VESTMENT PLANS THE PREMIUM OF WHICH HAS BEEN PUT INTO GROWTH FUND AND SMALL PART OF THE PREMIUM WAS FOR LEAVE ENCASHMENT AND MAJOR PORTION OF PAYMENT WAS IN GROWTH FUND, THEREFORE THE ASSESSING OFFICER HELD T HAT THE EXPENDITURE INCURRED AND CLAIMED AS BUSINESS EXPENDITURE HAS NO T BEEN EXPANDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BU SINESS OR PROFESSION, ITA NOS.583, 584 & 580(ASR)/2015 ASST. YEARS: 2010-11, 2011-12 ITA NOS.569 & 597(ASR)/2016 ASST.YEAR: 2012-13 5 AS PER THE PROVISION OF SEC.37 OF THE INCOME TAX AC T, AND THEREFORE THE ASSESSING OFFICER MADE DISALLOWANCE OF THE SAID PAY MENT. THE ASSESSING OFFICER FURTHER OBSERVED THAT ASSESS EE MADE PROVISION FOR BAD AND DOUBTFUL DEBTS AND THE SAME W AS NOT BIFURCATED INTO PROVISION FOR BAD AND DOUBTFUL DEBTS AND PROVI SION ON STANDARD ASSETS. THE ASSESSEE WAS ASKED TO FILE THE DETAILS OF PROVISION CREATED DURING THE YEAR AGAINST STANDARD ASSETS AND WAS SHO W CAUSED AND AS TO WHY THIS AMOUNT MAY NOT BE ADDED TO THE INCOME. THE ASSESSEE SUBMITTED THAT SECTION 36(1) (VIIA) OF THE INCOME T AX ACT SPEAKS OF PROVISION FOR BAD AND DOUBTFUL DEBTS AS ALLOWABLE E XPENSES AND SPECIFIES ONLY DEDUCTION OF PROVISION FOR BAD AND DOUBTFUL DE BTS WITHOUT ANY DISTINCTION REGARDING NATURE OF ADVANCES AGAINST WH ICH THIS PROVISION HAS BEEN MADE. IT WAS SUBMITTED THAT THERE WAS NO CONCE PT OF STANDARD ASSETS OR NON STANDARD ASSETS IN THE INCOME TAX ACT . THE ASSESSING OFFICER, HOWEVER WAS NOT CONVINCED WITH THE REPLY O F THE ASSESSEE AND THEREFORE DISALLOWED THE DEDUCTION CLAIMED BY ASSES SEE ON ACCOUNT OF PROVISION FOR BAD AND DOUBTFUL DEBTS ON STANDARD AS SETS. 7. AGGRIEVED WITH THE ORDERS, THE ASSESSEE FILED AP PEAL BEFORE LD. CIT(A) AND THE LD. CIT(A) ALLOWED THE RELIEF TO THE ASSESSEE ON ACCOUNT OF PROVISION FOR BAD AND DOUBTFUL DEBTS ON STANDARD A SSETS, WHEREAS IN RESPECT OF PROVISION FOR LEAVE ENCASHMENT, THE LD. CIT(A) CONFIRMED THE ADDITION. WHILE CONFIRMING THE ADDITION THE LD. CIT (A) DID NOT CONSIDER THE CLAIM OF ASSESSEE U/S 37 OF THE ACT BUT CONFIRM ED THE ADDITION U/S 43B (F) OF THE ACT. ITA NOS.583, 584 & 580(ASR)/2015 ASST. YEARS: 2010-11, 2011-12 ITA NOS.569 & 597(ASR)/2016 ASST.YEAR: 2012-13 6 8. AGGRIEVED BOTH PARTIES ARE IN APPEAL BEFORE US. 9. AT THE OUTSET, THE LD. AR SUBMITTED THAT THE IS SUE OF PROVISION FOR BAD AND DOUBTFUL DEBTS ON STANDARDS ASSETS IS SQUAR ELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE ITSELF FOR ASST. YEAR: 2008-09 WHICH WAS DECIDED BY HON'BLE TRIBUNAL ON DATED 20.06.2016 AND IN THIS RESPECT INVITED OUR AT TENTION TO THE ORDER OF THE TRIBUNAL PLACED AT (PB 1 TO 6). THE LD. AR SUBM ITTED THAT THE CASE OF THE ASSESSEE WAS ALSO COVERED BY THE DECISION OF HO N'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF STATE BANK OF PATIALA VS. CIT REPORTED 272 ITR 54 AND IN THIS RESPECT INVITED OUR ATTENTION TO THE C OPY OF THE ORDER PLACED AT (PB 15 TO 16). 10. AS REGARDS THE ISSUE OF DISALLOWANCE OF PREMIUM PAID TO LIC FOR COVERING LEAVE ENCASHMENT OF ITS EMPLOYEES, THE LD. AR SUBMITTED THAT THE PREMIUM PAID BY ASSESSEE WAS DEDUCTIBLE U/S 37 (1) OF THE ACT AS THE ASSESSEE HAD PAID THE PREMIUM TO INSURE ITS LIABILI TY FOR PAYMENT OF LEAVE ENCASHMENT TO ITS EMPLOYEES AT THE TIME OF THEIR RE TIREMENT OR DEATH. IT WAS SUBMITTED THAT ANY LIABILITY WHICH WILL ARISE I N FUTURE ON ACCOUNT OF LEAVE ENCASHMENT OF EMPLOYEES OF THE ASSESSEE WILL BE PAID BY THE LIC ONLY. IT WAS FURTHER SUBMITTED THAT ASSESSEE HAD MA DE ACTUAL PAYMENT AND AS SUCH PROVISION OF SECTION 43B (F) WERE NOT A TTRACTED AT ALL. IT WAS SUBMITTED THAT CLAUSE-F 43(B) AWAKES ONLY IF THE AS SESSEE HAD MADE PROVISIONS AND HAD NOT MADE THE ACTUAL PAYMENT WHER EAS IN THE INSTANT CASE, THE ASSESSEE HAS MADE PAYMENT TO LIC. ITA NOS.583, 584 & 580(ASR)/2015 ASST. YEARS: 2010-11, 2011-12 ITA NOS.569 & 597(ASR)/2016 ASST.YEAR: 2012-13 7 11. THE LD. DR, ON THE OTHER HAND, RELIED ON THE OR DERS OF AUTHORITIES BELOW IN RESPECT OF APPEALS FILED BY ASSESSEE WHERE AS HE RELIED ON THE ORDER OF ASSESSMENT IN RESPECT OF APPEALS FILED BY REVENUE. 12. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ISSUE O F PROVISION FOR DOUBTFUL DEBTS ON STANDARD ASSETS IS COVERED IN FAVOUR OF AS SESSEE BY THE ORDER OF THE TRIBUNAL DATED 22.06.2016 FOR ASSESSMENT YEAR: 2008-09, WHEREIN THE APPEAL OF THE REVENUE WAS DISMISSED WHICH WAS F ILED BY REVENUE ON SIMILAR GROUNDS. THE RELEVANT FINDINGS OF THE TRIBU NAL AS CONTAINED IN PARA 8 ONWARDS ARE REPRODUCED BELOW. 8. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAD C REATED A PROVISION OF RS. 50,00,000/- WHICH INCLUDED A SUM O F RS. 13,25,000/- AS PROVISIONS FOR BAD AND DOUBTFUL DEBT S AND THE BALANCE AMOUNT OF RS. 36,75,000/- WAS PROVISION AGA INST STANDARD ASSETS AND THE ENTIRE AMOUNT WAS CLAIMED AS DEDUCTI ON UNDER SECTION 36(1)(VIIA) OF THE ACT. THE ASSESSING OFFIC ER WAS OF THE OPINION THAT THE PROVISIONS MADE BY THE ASSESSEE AG AINST STANDARD ASSETS WAS A CONTINGENT LIABILITY AND WHICH WAS NOT ALLOWABLE AS BUSINESS EXPENDITURE. THE LD. CIT(A), HOWEVER, ALLO WED RELIEF TO THE ASSESSEE BY HOLDING THAT THE CLAIM OF THE ASSESSEE FALL INTO THE MAIN PROVISIONS OF SECTION 36(1)(VIIA). TO RESOLVE THE D ISPUTE IT IS IMPORTANT TO VISIT THE PROVISIONS OF SECTION 36(1)( VIIA) OF THE ACT AND WHICH FOR THE SAKE OF CONVENIENCE ARE REPRODUCED BE LOW. 36(1)(VIIA) IN RESPECT OF ANY PROVISION FOR BAD AN D 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 OUTSIDE INDIA] OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK, AN AMOUNT NOT EXCEEDING SEVEN AND ONE-HALF PERCENT OF THE TOTAL INCOME (COM PUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER VI-A) AND AN AMOUNT NOT EXCEEDING TEN PERCENT OF THE AGGREGATE A VERAGE ADVANCES MADE BY THE RURAL BRANCHES OF SUCH BANK CO MPUTED IN THE PRESCRIBED MANNER. PROVIDED THAT A SCHEDULE BANK OR A NON-SCHEDU LED BANK REFERRED TO IN THIS SUB-CLAUSE SHALL, AT ITS OPTION, BE ALLO WED IN ANY OF THE RELEVANT ASSESSMENT YEARS DEDUCTION IN RESPECT OF A NY PROVISION MADE BY IT FOR ANY ASSETS CLASSIFIED BY THE RESERVE BANK OF INDIA ITA NOS.583, 584 & 580(ASR)/2015 ASST. YEARS: 2010-11, 2011-12 ITA NOS.569 & 597(ASR)/2016 ASST.YEAR: 2012-13 8 AS DOUBTFUL ASSETS OR LOSS ASSETS IN ACCORDANCE WIT H THE GUIDELINES ISSUED BY IT IN THIS BEHALF, FOR AN AMOUNT NOT EXCE EDING FIVE PERCENT OF THE AMOUNT OF SUCH ASSETS SHOWN IN THE BOOKS OF ACCOUNT OF THE BANK ON THE LAST DAY OF THE PREVIOUS YEAR. PROVIDED FURTHER THAT FOR THE RELEVANT ASSES SMENT YEARS COMMENCING ON OR AFTER THE 1 ST DAY OF APRIL, 2003 AND ENDING BEFORE THE 1 ST DAY OF APRIL, 2005, THE PROVISIONS OF THE FIRST PR OVISO SHALL HAVE EFFECT AS IF FOR THE WORDS FIVE PERCENT, THE WORDS TEN PERCENT HAD BEEN SUBSTITUTED. PROVIDED ALSO THAT A SCHEDULED BANK OR A NON- SCHEDULED BANK REFERRED TO IN THIS SUB-CLAUSE SHALL, AT ITS OPTION , BE ALLOWED A FURTHER DEDUCTION IN EXCESS OF THE LIMITS SPECIFIED IN THE FOREGOING PROVISIONS, FOR AN AMOUNT NOT EXCEEDING THE INCOME DERIVED FROM REDEMPTION OF SECURITIES IN ACCORDANCE WITH A SCHEM E FRAMED BY THE CENTRAL GOVERNMENT. PROVIDED ALSO THAT NO DEDUCTION SHALL BE ALLOWED UN DER THE THIRD PROVISO UNLESS SUCH INCOME HAS BEEN DISCLOSED IN TH E RETURN OF INCOME UNDER THE HEAD PROFITS AND GAINS BUSINESS O R PROFESSION. FROM THE ABOVE PROVISIONS IT CAN BE SEEN THAT DEDUCTION U/S 36(1) (VIIA) OF THE ACT IS ALLOWED IN RESPECT OF PR OVISIONS FOR BAD AND DOUBTFUL DEBTS. THIS SECTION DOES NOT DIFFERENTIATE BETWEEN PROVISION ON BAD ASSETS AND PROVISION ON STANDARD ASSETS. THI S DEDUCTION EXCLUSIVELY ALLOWS DEDUCTION IN RESPECT OF PROVISIO N FOR BAD AND DOUBTFUL DEBTS TO THE EXTENT MENTIONED IN THE VARIO US CLAUSES OF SUB-SECTION (1) OF SECTION 36 OF THE ACT. THE DEDUC TION UNDER SECTION 36(1)(VIIA) OF THE ACT IS ALLOWED ONLY IN RESPECT O F CERTAIN SPECIFIC CATEGORIES OF ASSESSEE MENTIONED IN THE CLAUSE LIKE BANKS, FINANCIAL INSTITUTIONS, ETC. WHO ARE IN BUSINESS OF LENDING M ONEY. IT IS NOT ALLOWED EVEN TO NON-BANKING FINANCIAL INSTITUTIONS SINCE THEY ARE NOT INCLUDED IN THIS CLAUSE. IT IS SEEN THAT THOUGH SEC TION 36(1) (VII) STATES THAT DEDUCTION FOR PROVISION IS ALLOWABLE IN RESPECT OF PROVISION FOR BAD AND DOUBTFUL DEBTS, THE COMPUTATI ON OF SUCH DEDUCTION IS MADE WITH REFERENCE TO TOTAL INCOME OF THE SPECIFIED BANKS BASED UPON QUANTUM OF AVERAGE ADVANCES. THE D EDUCTION OF THE PROVISIONS IS NEITHER LIMITED TO THE QUANTUM OF BAD DEBTS IN THE BOOKS NOR IS COMPUTED WITH REFERENCE TO THE QUANTUM OF STANDARD ASSETS. THE DEDUCTION IN THIS CLAUSE REFERS TO ALLO WABLE PROVISIONS OF ANTICIPATED DEFAULT ON THE LOANS AND ADVANCES MADE IN RESPECT OF TOTAL ASSETS INCLUDING STANDARD ASSETS AND THE CLAI M OF THE ASSESSEE DOES NOT FALL INTO THE PROVISO TO SECTION 36(1) (VIIA) AS THE PROVISO DEALS WITH FURTHER DEDUCTION FOR PROVISIONS ON BAD AND DOUBTFUL DEBTS. THE CLAIM OF THE ASSESSEE IS COVERE D IN THE MAIN PROVISIONS OF SECTION 36(1)(VIIA) OF THE ACT. THE L D. CIT(A) HAS PASSED A VERY EXHAUSTIVE AND SPEAKING ORDER AND WE DO NOT FIND ANY INFIRMITY IN THE SAME. ITA NOS.583, 584 & 580(ASR)/2015 ASST. YEARS: 2010-11, 2011-12 ITA NOS.569 & 597(ASR)/2016 ASST.YEAR: 2012-13 9 THEREFORE FOLLOWING THE ABOVE TRIBUNAL ORDER, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF LD. CIT(A). 13. IN VIEW OF THE ABOVE FACT AND CIRCUMSTANCES THE GROUNDS OF APPEAL RAISED BY REVENUE IN ITA NO. 580 & 569 ARE DISMISSE D. 14. NOW COMING TO THE APPEALS FILED BY ASSESSEE, WE FIND THAT ASSESSING OFFICER HAD DISALLOWED THE PAYMENT MADE T O LIC AND BAJAJ ALIANZE U/S 37(1) OF THE ACT, HOLDING THE SAME TO B E NOT EXPANDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS. THE LD. CIT(A) WHILE CONFIRMING THE DISALLOWANCE HAS NOT CONSIDERED THE CLAIM OF THE ASSESSEE U/S 37(1) OF THE ACT AND HAS CONFIRMED THE ADDITION BY HOLDING THAT THE PROVISIONS OF SECTION 43B(F) WERE APPLICABLE TO THE ASSESSEE. HOWEVER, THE CLAIM OF THE ASSESSEE IN ITS WRITTEN SUBMISSIONS IS THAT ASSESSEE HAD NOT CREATED THE PROVISIONS AND IN FACT HAD MADE THE PAY MENT AND THEREFORE THE PROVISIONS OF SECTION 43B(F) OF THE ACT WERE NO T APPLICABLE, IT WAS ALSO REQUIRED THAT LD. CIT(A) HAD CONFIRMED THE DISALLOW ANCE U/S 43B (F) WITHOUT AFFORDING OPPORTUNITY TO THE ASSESSEE. THE REFORE, WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE TO THE OFFICE OF LD . CIT(A) WHO SHOULD EXAMINE THE CLAIM OF THE ASSESSEE U/S 37(1) OF THE ACT AS THE ASSESSING OFFICER HAD MADE THE DISALLOWANCE U/S 37(1) OF THE ACT. THE LD. CIT(A) SHOULD ALSO HEAR THE ASSESSEE ON THE APPLICABILITY OF PROVISIONS OF SECTION 43B(F) OF THE ACT. IN VIEW OF THE ABOVE, THE APPEAL S FILED BY ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.583, 584 & 580(ASR)/2015 ASST. YEARS: 2010-11, 2011-12 ITA NOS.569 & 597(ASR)/2016 ASST.YEAR: 2012-13 10 15. IN NUTSHELL, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES, WHEREAS THE APPEALS FILED BY REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.03.2017. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15.03.2017. /GP/SR. PS . COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER