M/s. NARMADA MALWA GRAMIN BANK, Indore V. The DCIT 1(1), Indore

ITA 687/IND/2014

• Counselvise Citation: 68722714 RSA 2014
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 05-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO. 680, 681/IND/2013 AND 687 & 688 /IND/201 4 A.Y. : 2008-09, 2010-11, 2011-12 & 2012-13 M/S.NARMADA MALWA GRAMIN BANK, ACIT, 2(1), 201, ARCADE SILVER, VS. INDORE. 56 - SHOPS, INDORE. APPELLANT RESPONDENT PAN NO.AACCN2847F APPELLANTS BY : SHRI S. S. DESHPANDE, CA RESPONDENT BY : SHRI R. A. VERMA, DR O R D E R PER D. T. GARASIA, J.M. THESE ARE FOUR APPEALS OF THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF THE LD. CIT(A)-I, INDORE, WHICH RELAT E TO ASSESSMENT YEARS 2008-09, 2010-11, 2011-12 AND 2012-13. DATE OF HEARING : 15. 10.2015. DATE OF PRONOUNCEMENT : 15 .10.2015 M/S.NARMADA MALWA GRAMIN BANK,INDORE, I.T.A.NOS.680 & 681/IND/2013 AND 687 & 688/IND/2014 A.YS. :2008-9, 2010-11, 2011-12 2 2 2. SINCE COMMON ISSUES ARE INVOLVED, ALL THESE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER. 3. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE:- I.T.A.NO. 680/IND/2013: A.Y. 2008-09: 1. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE DISALLOWANCE OF RS. 36,19,25,521/- ON ACCOUNT OF DEDUCTION CLAIMED U/S. 36(1)(VIIA)(A) OF THE INCOME - TAX ACT. 1.1 THE DEDUCTION CLAIMED BY THE ASSESSEE AT RS. 37.54 CRORES U/S 36(1) WAS MADE AS PER THE PROVISIONS OF THE ACT AND AS SUCH THE DISALLOWANCE OF SUCH CLAIM WAS ILLEGAL AND BAD IN LAW. 1.2 THE LD. CIT(A) HAS ERRED IN NOT FOLLOWING THE JUDGMENT OF HON'BLE BANGALORE BENCH IN THE CASE OF SYNDICATE BANK WHICH WAS DIRECTLY ON THIS POINT ON THE GROUND THAT THE SAME IS NOT OF A JURISDICTIONAL BENCH AND NOT BINDING. 1.3THE DISALLOWANCE OF THE CLAIM U/S 36(1)(VIIA)(A) IS BAD IN LAW AND MAY PLEASE BE DELETED. M/S.NARMADA MALWA GRAMIN BANK,INDORE, I.T.A.NOS.680 & 681/IND/2013 AND 687 & 688/IND/2014 A.YS. :2008-9, 2010-11, 2011-12 3 3 I.T.A.NO. 681/IND/2013: A.Y. 2010-11: 1. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE DISALLOWANCE OF RS. 60,45,76,810/- ON ACCOUNT OF DEDUCTION CLAIMED U/S 36(1)(VII)(A) OF THE ACT. 1.1 THE DEDUCTION CLAIMED BY THE ASSESSEE AT RS. 60.45 CRORES U/S 36(1) WAS MADE AS PER THE PROVISIONS OF THE ACT AND AS SUCH THE DISALLOWANCE OF SUCH CLAIM WAS ILLEGAL AND BAD IN LAW. 1.2 THE LD. CIT(A) HAS ERRED IN NOT FOLLOWING THE JUDGMENT OF HON'BLE BANGALORE BENCH IN THE CASE OF SYNDICATE BANK WHICH WAS DIRECTLY ON THIS POINT ON THE GROUND THAT THE SAME IS NOT OF A JURISDICTIONAL BENCH AND NOT BINDING. 1.3THE DISALLOWANCE OF THE CLAIM U/S 36(1)(VIIA)(A) IS BAD IN LAW AND MAY PLEASE BE DELETED. M/S.NARMADA MALWA GRAMIN BANK,INDORE, I.T.A.NOS.680 & 681/IND/2013 AND 687 & 688/IND/2014 A.YS. :2008-9, 2010-11, 2011-12 4 4 I.T.A.NO. 687 & 688/IND/2014 - A.Y.2011-12 & 2012-13: (COMMON GROUNDS): 1. THE DISALLOWANCE OF THE CLAIM U/S 36(1)(VIIA) (A) IS BAD IN LAW AND MAY PLEASE BE DELETED. 2. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE DISALLOWING THE CLAIM U/S 36(1)(VIIA) BEING 10% OF THE AGGREGATE AVERAGE ADVANCES MADE BY THE RURAL BRANCHES. 4. IN I.T.A.NO. 680/IND/2013 FOR THE ASSESSMENT YEAR 2008-09, THE ASSESSEE HAS CLAIMED IN THE ORIGINAL R ETURN DEDUCTION U/S 36(1)(VIIA)(A) AT RS. 37,54,26,162/-, WHICH IS THE TOTAL OF RS. 1,35,00,641/- BEING 7.5 % OF THE TOTAL INCOME COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLA USE AND CHAPTER VIA AND ON AMOUNT OF RS. 36,19,25,521/- BEI NG 10% OF THE AGGREGATE AVERAGE ADVANCES OF RS. 3,61,92,55,21 7.81 MADE BY THE RURAL BRANCHES OF THE BANK. 5. IN I.T.A.NO. 681/IND/2013 FOR THE ASSESSMENT YEAR M/S.NARMADA MALWA GRAMIN BANK,INDORE, I.T.A.NOS.680 & 681/IND/2013 AND 687 & 688/IND/2014 A.YS. :2008-9, 2010-11, 2011-12 5 5 2010 - 11, THE ASSESSEE HA D CLAIMED DEDUCTION U/S 36(1)(VIIA)(A) AT RS. 60,45,76,810/-, (CONSISTING OF RS. 2,30,07,9 08/- BEING 7.5% OF THE TOTAL INCOME COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THAT CLAUSE AND CHAPTER VIA + RS. 58,15,68,90 2/- BEING 10% OF THE AGGREGATE AVERAGE ADVANCES OF RS. 5,81,5 6,89,000/- MADE BY THE RURAL BRANCHES OF THE BANK.) 6. IN I.T.A.NOS. 687 & 688/IND/2014 FOR THE ASSESSMENT YEARS 2011-12 & 2012-13, THE ASSESSEE HAD CLAIMED D EDUCTION U/S 36(1)(VIIA)(A) AT RS. 70,45,60,291/- & RS. 64,5 2,95,053/-, (CONSISTING OF RS. 2,11,17,250/- & RS. 2,47,10,653/ -, RS. 2,11,17,250/- BEING 7.5% OF THE TOTAL INCOME COMPU TED BEFORE MAKING ANY DEDUCTION UNDER THAT CLAUSE AND CHAPTER VIA + RS. 68,34,43,042/- & RS. 62,05,84,400/- AND BEING 10% O F THE AGGREGATE AVERAGE ADVANCES OF RS. 6,83,44,420/- & R S. 6,20,58,44,000/- MADE BY THE RURAL BRANCHES OF THE BANK). 7. THE LD. AUTHORIZED REPRESENTATIVE CONTENDED THAT IN ALL THESE APPEALS POINT INVOLVED IS REGARDING DEDUCTION U/S 36(VIIA). THE APPEAL OF THE ASSESSEE HAS ALREADY BEEN REJECTE D BY THE I.T.A.T., INDORE BENCH FOR THE ASSESSMENT YEAR 2007 -08 AND THE M/S.NARMADA MALWA GRAMIN BANK,INDORE, I.T.A.NOS.680 & 681/IND/2013 AND 687 & 688/IND/2014 A.YS. :2008-9, 2010-11, 2011-12 6 6 MATTER IS PENDING BEFORE THE HON'BLE HIGH COURT ON THE POINT OF DEDUCTION U/S 36(1)(VIIA) OF THE INCOME-TAX ACT, 19 61. THE PHOTOCOPIES OF THE ORDERS OF THE I.T.A.T. IN I.T.A. NO. 162/IND/2011 ETC. AND THE ORDER PASSD IN M.A.NO.104/IND/2012 DATED 16.4.2103. (ARISING OUT O F I.T.A.NO. 162/IND/2011) WERE PLACED ON FILE. 8. THE LD. DR ALSO AGREED TO IT AND RELIED ON THE ORDER DATED 29.03.2012 PASSED BY THE I.T.A.T., INDORE BEN CH IN I.T.A.NOS. 162/IND/2011 AND M. A. NO.104/IND/2012 D ATED 16.4.2013. 9. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. WE HAVE PERUSED THE ORDER OF THIS BENCH PASSED IN I .T.A.NO. 162 /IND/2011 DATED 29.3.2012 AND ALSO ORDER PASSED IN M. A. NO.104/IND/2012 DATED 16.4.2013 (ARISING FROM I.T.A .NO. 162/IND/2012), WHEREIN THE TRIBUNAL HELD AS UNDER : - WE HAVE GONE THROUGH THE ORDER OF THE TRIBUNAL DATED 29.03.2013 WHEREIN THE ISSUE WITH REGARD TO ALLOWABILITY OF CLAIM OF DEDUCTION U/S 36(1)(VIIA) OF THE ACT WAS DECIDED AFTER DISCUSSING VARIOUS M/S.NARMADA MALWA GRAMIN BANK,INDORE, I.T.A.NOS.680 & 681/IND/2013 AND 687 & 688/IND/2014 A.YS. :2008-9, 2010-11, 2011-12 7 7 DECISIONS OF HON'BLE SUPREME COURT AS WELL AS HIGH COURT IN PARA 11 TO 16, THE ISSUE WITH REGARD TO QUANTIFICATION OF DEDUCTION U/S 36(1)(VIIA) WAS RESTORED TO THE FILE OF THE AO FOR RECOMPUTING THE CLAIM OF DEDUCTION TO THE EXTENT OF AMOUNT WRITTEN OFF IN THE BOOKS OF ACCOUNT, EVEN THOUGH SUCH WRITE OFF WAS NOT PARTY-WISE. THE CONTENTION OF LD. AUTHORIZE D REPRESENTATIVE WAS THAT FULL AMOUNT OF PROVISION FO R BAD AND DOUBTFUL DEBT SHOULD BE ALLOWED IRRESPECTIVE OF ENTRY MADE IN THE BOOKS OF ACCOUNT. WE ARE NOT IN AGREEMENT WITH THE ASSESSEES CONTENTION IN SO FAR AS PROVISION CONTAINED IN CLAU SE (VIIA) OF SECTION 36 CLEARLY STARTS WITH THE WORD IN RESPECT OF PROVISION FOR BAD AND DOUBTFUL DEBT MADE BY SCHEDULE BANK... THUS, TO THE EXTENT OF PROVISION MADE FOR BAD AND DOUBTFUL DEBTS IN THE BOOKS OF ACCOUNT, CAN BE ALLOWED. 10. SINCE NO PROVISION FOR BAD AND DOUBTFUL DEBT HAS BE EN M/S.NARMADA MALWA GRAMIN BANK,INDORE, I.T.A.NOS.680 & 681/IND/2013 AND 687 & 688/IND/2014 A.YS. :2008-9, 2010-11, 2011-12 8 8 MADE IN ALL THE ABOVE APPEALS OF THE ASSESSEE , WE, RESPECTFULLY FOLLOWING THE DECISION OF THE I.T.A.T. INDORE BENCH (SUPRA), DISMISS ALL THE APPEALS OF THE ASSESSEE. 11. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE O PEN COURT ON 15 TH OCTOBER, 2015, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 15 TH OCTOBER, 2015. CPU* 9.24 M/S.NARMADA MALWA GRAMIN BANK,INDORE, I.T.A.NOS.680 & 681/IND/2013 AND 687 & 688/IND/2014 A.YS. :2008-9, 2010-11, 2011-12 9 9