SHREE SIDHIVINAYAK NAGARI SAHAKARI BANK LTD, RAIGAD V. ASST CIT CIR PANVEL, PANVEL

ITA 5855/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0398 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR A K NAYAK
• Keywords: Bad and doubtful debts
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE SHRI P K BANSAL, VP & SHRI PAWAN SINGH, JM ITA NO. 5855/MUM/2015 ASSESSMENT YEAR : 2009-10 SHREE SIDHIVINAYAK SAHAKARI BANK LTD., PRABAL, MOHOPADA, RASAYANI, DIST. RAIGAD PAN AAAAS0937P VS. ACIT CIRCLE - PANVEL (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PIYUSH CHHAJED RESPONDENT BY : DR A K NAYAK DATE OF HEARING : 14 .0 6 .2017 DATE OF PRONOUNCEMENT : 16 .0 6 .2017 O R D E R PER P K BANSAL, VICE-PRESIDENT: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINS T THE ORDER OF THE CIT(A), DATED 30.10.2015, FOR ASSESSMENT YEAR 2009- 10. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN CONFIRMING THE ADDITION OF RS .1,81,000/- BEING AMOUNT DEBITED TO PROFIT AND LOSS ACCOUNT TOWARDS PROVISION FOR STAND ARD ASSETS IN ACCORDANCE WITH THE RBI CIRCULAR. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAR EFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE AUTHORITIES BELOW . WE NOTED THAT THE ASSESSEE HAS DEBITED A SUM OF ` 1,81,000/- BEING PROVISION FOR STANDARD ITA NO. 5855/MUM/2015 SHREE SIDHIVINAYAK SAHAKARI BANK LTD 2 ASSETS IN ITS PROFIT & LOSS ACCOUNT. THE ASSESSEE CLAIMED THAT THE SAID PROVISION HAS MANDATORILY BEING MADE IN VIEW OF THE RBI GUIDELINES. THE ASSESSING OFFICER DID NOT AGREE WITH THE ASSESSEE, AS IN HIS OPINION NO PROVISION EXCEPT AS PROVIDED U/S. 36(1)((VIIA) OF T HE I.T ACT CAN BE ALLOWED TO THE ASSESSEE. THE ASSESSEE WENT IN APPEAL BEFORE T HE CIT(A). THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER OBSERV ING AS UNDER: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, FINDING OF THE A.O., SUBMISSION OF THE LD. A.R. PROVISIONS OF THE ABOVE REFERRED SECTIONS AND MATERIAL PLACED ON RECORD. IN THE CASE OF BANKING ASSESSEE'S , THERE IS SPECIFIC PROVISION IN THE ACT , WHERE THE BANKING ASSESSEE'S CAN CLAIM THE PROVISIONS, PROVIDED THE S AME HAS MADE AS PER TERM AND CONDITION, LAID DOWN U/S 36(L)(VIIA) O F THE ACT. IN THIS CASE I FIND THAT THE CLAIM OF THE APPELLANT, FOR DEDUCTION OF THE PROVISION OF RS1,81,000/-, @0.25% OF OUTSTANDING STANDARD ASSETS MAY BE ALLOWED, EITHER U/S36(L)(VII) READ WITH SECTION 36(2) OR IN AN ALTERNATIVELY U/S37(L) OF TH E ACT, IS NOT TENABLE, AS THE PHRASEOLOGY USED THEREIN IS 'PROVIS ION FOR BAD AND DOUBTFUL DEBTS' AND NOT FOR ANY OTHER PROVISION. IN THE CASE OF THE THANE DIST. CENTRAL CO-OP. BANK LTD., THE HON'BLE I TAT MUMBAI BENCH, MUMBAI, VIDE APPEAL DECIDED IN ITA NO.7135/M UM/2012, HAS DECIDED THE ISSUED UNDER APPEAL, BY OBSERVING A S UNDER:- THE ASSESSEE HAD MADE PROVISION ON ACCOUNT OF BAD A ND DOUBTFUL DEBTS OF RS 6 CRORES AS AGAINST ITS CLAIM OF DEDUCTION AT RS 31,49,57,717/-. THE AO HAD ALLOWED THE CLAIM OF DEDUCTION U/S 36(L)(VIIA) OF THE ACT TO THE EXTENT OF RS 6 CRORES . HOWEVER, THE OTHER PROVISION MADE ON ACCOUNT OF STANDARD ASSETS OF RS 2,69,70, OOO/- AND ONE TIME SETTLEMENT OF RS 1 CRORES WAS HE LD TO BE NOT ALLOWABLE UNDER THE PROVISIONS OF SEC 36(L)(VII A) OF THE ACT. THE CLAIM OF THE ASSESSEE BEFORE US IS THAT THE OPE NING PORTION OF SEC 36(L)(VIIA) OF THE ACT STATES ANY PROVISION FOR BAD AND DOUBTFUL DEBTS AND BOTH THE PROVISIONS MADE ON ACCOUNT OF ST ANDARD ASSETS AND OTS WERE COVERED UNDER THE SAID LANGUAGE OF THE SAID SECTION. WE FIND NO MERIT IN THE PLEA OF THE ASSESS EE IN THIS REGARD. IN VIEW OF THE RATIO HAVING BEEN LAID DOWN BY THE TRIBUNAL IN THE KARAD JANATA SAHAKARI BANK LTD VS THE TRO (S UPRA) AND ITA NO. 5855/MUM/2015 SHREE SIDHIVINAYAK SAHAKARI BANK LTD 3 FOLLOWING THE SAME PARITY OF REASONING, WE HOLD THA T THE ASSESSEE IS NOT ENTITLED TO CLAIM OF DEDUCTION U/S 36(L)(VII A.) OF THE ACT ON ACCOUNT OF PROVISION MADE FOR STANDARD ASSETS. 3. THE LEARNED AR EVEN THOUGH BEFORE US VEHEMENTLY CONTENDED THAT SINCE THE PROVISION HAS TO BE MADE IN ACCORDANCE WI TH THE RBI GUIDELINES, THE ASSESSEE MUST BE ALLOWED DEDUCTION U/S. 36(1)(VIIA) OR, ALTERNATIVELY, U/S. 37(1) OF THE ACT. 4. WE DO NOT AGREE WITH THE SUBMISSIONS OF THE LEAR NED AR AS, IN OUR OPINION, ANY DEDUCTION FOR THE PROVISION FOR STANDA RD ASSETS CAN BE ALLOWED TO THE ASSESSEE U/S. 36(1)(VIIA) NOT OTHERWISE. WE DO NOT FIND ANY ILLEGALITY IN THE ORDER OF THE CIT(A). IN OUR OPINION THE CIT(A) HAS RIGHTLY RELIED ON THE ORDER OF THE MUMBAI BENCH OF THIS TRIBUNAL IN ITA N O. 7135/MUM/2002. NO CONTRARY DECISION WAS BROUGHT TO OUR KNOWLEDGE. WE , THEREFORE, CONFIRM THE ORDER OF THE CIT(A). RESPECTFULLY FOLLOWING THE DE CISION OF THIS TRIBUNAL (SUPRA), THE GROUND RAISED BY THE ASSESSEE IS DISMI SSED. 5. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH DAY OF JUNE, 2017. SD/- SD/- (PAWAN SINGH) (P K BANSAL) JUDICIAL MEMBER VICE-PRESIDENT MUMBAI; DATED: 16 TH JUNE, 2017 SA ITA NO. 5855/MUM/2015 SHREE SIDHIVINAYAK SAHAKARI BANK LTD 4 COPY OF THE ORDER FORWARDED TO : 1. THE APP ELL ANT. 2. THE RESPONDENT. 3. T HE CIT(A), MUMBAI 4. THE CIT 5. DR, E BENCH, ITAT, MUMBAI BY ORDER, #TRUE COPY # ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI