ACIT, Jaipur V. STATE BANK OF BIKANER & JAIPUR, Jaipur

ITA 796/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5606 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 25-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Reopening of assessment; Business income; Tangible material; Bad and doubtful debts; Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 148; 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE:SHRI T.R. MEENA,AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NOS. 796 & 797/JP/2013 & FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2005-06 & 2006-07 THE ACIT CIRCLE- 6 JAIPUR CUKE VS. M/S. STATE BANK OF BIKANER & JAIPUR TILAK MARG, C-SCHEME, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AADCS 4750 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI SUNIL MATHUR , CIT -DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL , CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02/12/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 08/ 01/2016 VKNS'K@ ORDER PER LALIET KUMAR, JM BOTH THESE APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST SEPARATE ORDERS OF THE LD. CIT(A)-II, JAIPUR DATED 29-08-201 3 FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07 RAISING THEREIN COMMON GR OUNDS AS UNDER:- (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING REOPENING OF THE CASE AS ONLY CHANGE OF OPINION OF THE AO THOUGH IT IS APPARENT FROM THE RECORD THAT IT IS NO T MERE CHANGE OF OPINION BUT IT IS A CASE OF UNDER ASSESSM ENT AS PER THE PROVISIONS OF CLAUSE (C)(I) OF EXPLANATION 2 OF SECTION ITA NO. 796//JP/2013 ACIT, CIRCLE- 6, JAIPUR VS. M/S. SBBJ, JAIPUR . 2 147 OF I.T. ACT, 1961. (SIMILAR GROUND IS SAME IN A .Y. 206- 07) (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETIN G THE ADDITION OF RS. 3,25,68,926/-(7.5% OF RS. 43,42,52, 356) IN A.Y. 2005-06 AND RS. 1,76,73,498/-(7.5% OF RS. 23,56,46,644/- IN A.Y. 2006-07 MADE BY DISALLOWING CLAIM OF DEDUCTION U/S 36(1)(VIIA) AS THIS DEDUCTION IS N OT FOR INCOME FROM OTHER SOURCES. 2.1 FIRST OF ALL, WE TAKE UP THE GROUND NO. 1 OF APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR 2005-06 AS TO REOPENING OF THE ASSESSMENT 147/148 OF THE ACT. BRIEF FACTS OF THE CASE ARE T HAT THE ASSESSEE FILED THE RETURN DECLARING TOTAL INCOME OF RS.2,02,00,90,940/ -. ASSESSMENT WAS FRAMED U/S 143(3) ON 28.12.2007 AT INCOME OF RS.2,8 6,54,47,752/-. THE AO ISSUED NOTICE U/S 148 BY RECORDING THE FOLLOWIN G REASONS:- IT IS SEEN THAT DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2005-06, THE ASSESSEE RECEIVED A SUM OF RS.43,42,52,356/- ON ACCOUNT OF I NTEREST ON REFUND OF INCOME TAX PERTAINING TO DIFFERENT ASSESSMENT YEARS. THE A FORESAID INCOME WAS LIABLE TO BE COMPUTED UNDER THE HEAD INCOME FROM OTHER SOURC ES WHILE IN THE FINANCIAL STATEMENT ASSESSEE HAS GROUPED THE SAME WITH NORMAL INTEREST INCOME SHOWN AS ITS BUSINESS INCOME AND THE TOTAL INCOME OF THE ASSESSEE INCLUDING THE AFORESAID INCOME WAS ASSESSED UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION THE DEDUCTION U/S 36(1)(VIIA) WAS ALLOW ED IN RESPECT OF TOTAL INCOME WHICH INCLUDED THE INTEREST INCOME (ON I. T. REFUND) ALSO AS MENTIONED ABOVE. HOWEVER DEDUCTION UNDER THE PROVISION IBID W AS NOT ALLOWABLE IN RESPECT OF SUCH INTEREST INCOME OF RS.43,42,52,356/- BEING INCOME FROM OTHER SOURCES. THE ASSESSEE SHOULD HAVE SHOWN SUCH INTER EST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES AND ACCORDINGLY SHOULD HAVE WORKED OUT THE DEDUCTION U/S 36(1)(VIIA) EXCLUDING SUCH INTEREST. THEREFORE, THE ASSESSEE FAILED TO DISCLOSE FULLY AND TRULY, ALL MATERIAL FACT NECE SSARY FOR THE ASSESSMENT RESULTING IN EXCESS ALLOWANCE OF DEDUCTION OF RS.3, 25,68,926/- (7.5% OF ITA NO. 796//JP/2013 ACIT, CIRCLE- 6, JAIPUR VS. M/S. SBBJ, JAIPUR . 3 43,42,52,356/-) U/S 36(1)(VII) VIS A VIS UNDER COMP UTATION OF INCOME TO SUCH EXTENT. THIS HAS RESULTED IN UNDER COMPUTATION OF I NCOME BY RS.3,25,68,926/- WHICH HAS ESCAPED ASSESSMENT. 2.2 BEING AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEA L BEFORE THE LD. CIT(A) WHO HELD THAT THE REOPENING OF ASSESSMENT O N THE ISSUE ALREADY CONSIDERED BY AO IS NOT VALID BY HOLDING AS UNDER:- 2.2 I HAVE CONSIDERED THE FACTS OF THE CASE; ASSE SSMENT ORDER AND APPELLANT'S WRITTEN SUBMISSION. SAME ISSUE WAS INVO LVED IN THE CASE OF APPELLANT IN AY 2007-08 WHEREIN MY PREDECESSOR BY ORDER DATED 18.10.2012 HAD DECIDED THE ISSUE OF REOPENING. RELEVANT PORTION OF HER ORD ER IS QUOTED BELOW: 'REASONS FOR REOPENING AS CLEAR FROM THE ASSESSMEN T ORDER HAVE BEEN SUMMARIZED IN THE ABOVE PARA. THE WRITTEN SUBMISSION DATED 16-10-2012 OF THE APPE LLANT IS PLACED ON RECORD. 5. .. AFTER GOING THROUGH RIVAL SUBMISSIONS FOLL OWING POINTS EMERGE: 1. INTEREST ON INCOME TAX REFUND, INSURANCE COMMISS ION ETC. CONSISTENTLY BEEN DECLARED AS BUSINESS INCOME BY THE APPELLANT B ANK IN ITS RETURNS : ALL MATERIAL FACTS HAD BEEN DISCLOSED BY THE APPELLANT IN THE RETURN. THE APPELLANT IS A BANKING COMPANY WHERE THE ABOVE INCOME LIKE IN COME TAX REFUND INTEREST, INSURANCE COMMISSION, LEASE RENT HAVE CON SISTENTLY BEEN GROUPED IN THE AUDITED ACCOUNTS AS BUSINESS INCOME AND HAVE BE EN SO DECLARED AS BUSINESS INCOME. 2. SUCH BUSINESS INCOME CONSTANTLY BEEN ACCEPTED IN SCRUTINY ASSESSMENTS BY THE DEPARTMENT: SUCH INCOME HAS BEEN ALLOWED BY THE DEPARTMENT IN ALL EARLIER SCRUTINY ASSESSMENTS, INC LUDING SUBSEQUENT ASSESSMENTS OF AY 2008-09, 2009-10, 2010-11 & 2011- 12. THERE ARE SEVERAL CASE LAWS SUPPORTING THE PRINCIPLE OF CONSI STENCY. 3.CHANGE MADE BY BIFURCATING CERTAIN INCOME INTO IN COME FROM OTHER SOURCES ONLY IN AY 2007-08 THAT TOO U/S 147: IN ALL ASSESSMENTS INTEREST ON REFUNDS, LEASE RENTALS, INSURANCE COMMISSION HAVE B EEN ACCEPTED AND ASSESSED AS BUSINESS INCOME. 4.EARLIER SCRUTINY ASSESSMENT OF AY 2007-08 MADE AF TER PROPER APPLICATION OF MIND BY THE AO AND ON DISCLOSURE OF ALL FACTS BY THE APPELLANT: IT IS SEEN THAT IN AY 2007-08 THE YEAR UNDER CONSIDERATION O RDER U/S 143(3) DATED 24- 12-2009 - DISCUSSED IN PARA 9 THE DEDUCTION ALLOWAB LE U/S 36(1)(VII) & 36(1)(VIIA) AND HELD THAT THE PROVISION FOR BAD AND DOUBTFUL DEBT DEDUCTION U/S 36(1)(VIIA) SHOULD NOT EXCEEDRS.2,20,50,86,829. IN THE COMPUTATION OF INCOME IT WAS STATED AS UNDER: ITA NO. 796//JP/2013 ACIT, CIRCLE- 6, JAIPUR VS. M/S. SBBJ, JAIPUR . 4 'ASSESSED BUSINESS INCOME BEFORE CLAIM U/S 36(1)(VI IA) RS.811,49,76,353 LESS: DEDUCTION U/S 36(1)(VIIA) 10% OF RURAL ADVANCE RS.1,69,81,40,688 7.5% OF TOTAL INCOME RS. 60,86,23,226 RS. 2,30,67,63,914 TO BE RESTRICTED UP TO RS.220,50,86,829 RS. 220,50,86,829' THIS SHOWS THAT THE DEDUCTION WAS ALLOWED AFTER PRO PER APPLICATION OF MIND AND HAS BEEN ALLOWED BY THE DEPARTMENT IN ALL EARLIER S CRUTINY ASSESSMENTS, INCLUDING SUBSEQUENT ASSESSMENTS OF AY 2008-09, 2009-10, 2010 -11 & 2011-12. ALL MATERIAL FACTS HAD BEEN DISCLOSED BY THE APPELLANT IN THE RETURN. THEREFORE THE REASSESSMENT NOTICE CONSTITUTES ONLY CHANGE OF OPIN ION ON THE PART OF THE AO. 5. ACTION OF THE AO OF REASSESSMENT CONSTITUTES CHAN GE OF OPINION AS PER APEX COURT DECISIONS : FOLLOWING DECISIONS OF HON'BLE SUPREME COURT RELIED UPON BY THE APPELLANT IN SUBMISSION DATED 16-10-2012 DO NOT JUS TIFY REOPENING: 1. CIT VS. KELVINATOR OF INDIA LTD. 320 ITR 561/ 187 T AXMAN 312 (SC) THE CONCEPT OF 'CHANGE OF OPINION' ON THE PART OF T HE ASSESSING OFFICER TO REOPEN AN ASSESSMENT DOES NOT STAND OBLITERATED AFTER THE SUB STITUTION OF SECTION 147 OF THE INCOME-TAX ACT, 1961, BY THE DIRECT TAX LAWS (AMEND MENT) ACTS, 1987 AND 1989. AFTER THE AMENDMENT, THE ASSESSING OFFICER HAS TO H AVE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, BUT THIS DOES NOT IMPLY THA T THE ASSESSING OFFICER CAN REOPEN AN ASSESSMENT ON MERE CHANGE OF OPINION. THE CONCEP T OF 'CHANGE OF OPINION' MUST BE TREATED AS AN INBUILT TEST TO CHECK THE ABUSE OF PO WER. HENCE AFTER APRIL 1, 1989, THE ASSESSING OFFICER HAS POWER TO REOPEN AN ASSESSMENT , PROVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASON MUST HAVE A LINK WITH THE FORMAT ION OF THE BELIEF. 2. CIT V. FORAMER FRANCE: 264 ITR 567 (SC) SUPREME COURT AFFIRMED THE DECISION OF THE ALLAHABA D HIGH COURT IN THE CASE OF FORAMER V CIT: 247 ITR 463, WHEREIN IT WAS, INTER A LIA, HELD BY THE COURT IN THE CONTEXT OF THE PROVISIONS OF SECTION 147/148 OF THE ACT, AS AMENDED WITH EFFECT FROM 1.4.1989, THAT THE REASSESSMENT CANNOT BE BASED ON A MERE CHANGE OF OPINION AND THAT THE LAW THAT AN ASSESSMENT COULD NOT BE REOPENED ON A CHANGE OF OPINION WAS THE SAME BEFORE AND AFTER THE AMENDMENT BY THE DIRECT TAX LA WS (AMENDMENT) ACT, 1987. ITA NO. 796//JP/2013 ACIT, CIRCLE- 6, JAIPUR VS. M/S. SBBJ, JAIPUR . 5 IN VIEW OF THE POINTS SUMMARIZED IN THIS PARA 5, TH E AO WAS NOT JUSTIFIED IN REOPENING THE ASSESSMENT AS ALL MATERIAL FACTS HAD BEEN DISCLOSED BY THE APPELLANT LIKE IN EARLIER YEARS WHERE THE DEPARTMENT HAD ACCEPTED THE SAME AND THE ACTION OF THE AO CONSTITUTED ONLY CHANGE OF OPINION AS EARLIER DEDUC TION WAS ALLOWED AFTER PROPER APPLICATION OF MIND.' SINCE THE FACTS ARE IDENTICAL THIS YEAR ALSO, RESPE CTFULLY FOLLOWING THE AFORESAID ORDER OF MY PREDECESSOR, IT IS HELD THAT REOPENING OF ASSESSMENT ON THE ISSUE ALREADY CONSIDERED BY AO IS NOT VALID 2.3 NOW THE REVENUE IS BEFORE US WHEREIN THE LD. DR RELIED ON THE ORDER OF THE AO. 2.4 THE LD. AR OF THE ASSESSEE REITERATED THE ARGUM ENTS AS MADE BEFORE THE LD. CIT(A) AS UNDER:- 1. ASSESSMENT U/S 147 OF THE ACT CAN BE REOPENED ONLY WHEN THE AO HAS REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE H AS ESCAPED ASSESSMENT. INCOME CAN BE SAID TO HAVE ESCAPED ASSESSMENT IF THE INCOME FO R A PARTICULAR ASSESSMENT YEAR WENT UNNOTICED BY THE ASSESSING OFFICER OR THE INCO ME WAS NOT FULLY OR PROPERLY DISCLOSED BY THE ASSESSEE. IN THE PRESENT CASE, IN ORIGINAL ASSESSMENT PROCEEDINGS, ASSESSEE HAS FILED INNER GROUPING OF SCHEDULE 13 INTEREST EARNED WHERE IN THE DETAILS OF OTHER INCOME, INTEREST ON REFUND FROM IN COME TAX WAS SEPARATELY DISCLOSED . IN THE COMPUTATION, DEDUCTION U/S 36(I)(VIIA) WAS C LAIMED WITH REFERENCE TO THE TOTAL INCOME AS PROVIDED IN THAT SECTION. THE ASSESSMENT WAS COMPLETED U/S 143(3) WHERE DEDUCTION U/S 36(I)(VIIA) WAS ALLOWED AFTER CONSIDE RING THE FACT THAT THE ASSESSEE HAS RECEIVED INTEREST ON INCOME TAX REFUND AND THE DEDU CTION IS ALLOWABLE WITH REFERENCE TO THE TOTAL INCOME AND NOT WITH REFERENCE TO THE I NCOME UNDER THE HEAD PROFIT AND GAINS FROM BUSINESS. THEREFORE, BY INCORRECTLY INTE RPRETING SECTION 36(I)(VIIA), IT CANNOT BE SAID THAT ASSESSEE HAS FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS WHICH HAS RESULTED IN ALLOWING EXCESS DEDUCTION UND ER THIS SECTION. THEREFORE, ONLY ON CHANGE OF OPINION, WHICH IS ALSO NOT IN ACCORDAN CE WITH THE STATUTORY PROVISION OF SECTION 36(I)(VIIA), ASSESSMENT CANNOT BE REOPENED . 2. IT IS SETTLED LAW THAT REASON TO BELIEVE CAN NEV ER BE THE OUTCOME OF A CHANGE OF OPINION. IT IS ESSENTIAL THAT BEFORE ANY ACTION IS TAKEN BY THE AO, HE SHOULD SUBSTANTIATE HIS SATISFACTION. IN THE REASONS RECOR DED BY THE AO, HE HAS SIMPLY GIVEN HIS OPINION THAT INCOME REFERRED IN THE NOTICE ARE ASSESSABLE AS INCOME FROM OTHER SOURCES ON WHICH DEDUCTION U/S 36(1)(VIIA) IS NOT A LLOWABLE. WHAT ARE THE REASONS FOR COMING TO SUCH CONCLUSIONS IS NOT SPELT OUT. IN THE SE CIRCUMSTANCES ACTION TAKEN U/S 147/148 IS BAD IN LAW. RELIANCE IS PLACED ON THE FO LLOWING DECISIONS: (I) CIT VS. KELVINATOR OF INDIA LTD. 320 ITR 561/ 1 87 TAXMAN 312 (SC) ITA NO. 796//JP/2013 ACIT, CIRCLE- 6, JAIPUR VS. M/S. SBBJ, JAIPUR . 6 (II) CIT V. FORAMER FRANCE: 264 ITR 567 (III) ASIAN PAINT LTD. VS. DCIT 2008-TIOL-698-HC-MU M 3. IN A.Y. 2007-08 ALSO THE AO ISSUED NOTICE U/S 1 48 ON THE SAME ISSUE AGAINST WHICH ASSESSEE FILED APPEAL BEFORE CIT(A). THE CIT(A) APPEAL VIDE ITS ORDER DATED 18-10-2012 IN APPEAL NO 289/11-12 HELD THAT THE ACTION OF THE AO CONSTITUTED ONLY CHANGE OF OPINION AS EARLIER DEDUCTION WAS ALL OWED AFTER PROPER APPLICATION OF MIND. IN VIEW OF THE ABOVE, THE ORDER PASSED BY TH E LD. ASSESSING OFFICER U/S 147 IS ILLEGAL, BAD IN LAW AND DESERVES TO BE QUASHED AND THE ORDER OF THE LD. CIT(A) DESERVES TO BE SUSTAINED.. 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD THA T THE SAME ISSUE IS INVOLVED FROM THE ASSESSMENT YEAR 2007-08 IN ASSESS EE'S OWN CASE WHEREIN THE LD. CIT(A) HAS GIVEN DUE CONSIDERATION TO HIS PREDECESSORS ORDER DATED 18-10-2012 (SUPRA) BY CONSIDERING THE A BOVE DECISIONS. THEREFORE, WE FIND NO REASON TO INTERFERER WITH THE ORDER OF THE LD. CIT(A) BEING THE SIMILAR DECISION IN ASSESSEE'S OWN CASE F OR THE ASSESSMENT YEAR 2007-08. THUS GROUND NO. 1 OF THE REVENUE IS DISMIS SED. 3.1 THE GROUND NO. 2 OF THE REVENUE IS REGARDING DE LETING THE ADDITION OF RS. 3,25,68,926/- (75% OF RS. 43,42,52,356/-) MA DE BY DISALLOWING CLAM OF DEDUCTION U/S 36(1)(VIIA). BRIEF FACTS OF T HIS GROUND ARE THAT AS PER INFORMATION AVAILABLE ON RECORD THE ASSESSEE HAD RE CEIVED A SUM OF RS. 43,42,52,356/- ON ACCOUNT OF INTEREST ON REFUNDS O F INCOME TAX PERTAINING TO DIFFERENT ASSESSMENT YEARS DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. ACCORDING TO THE AO, THERE IS CONCRE TE MATERIALS AVAILABLE ITA NO. 796//JP/2013 ACIT, CIRCLE- 6, JAIPUR VS. M/S. SBBJ, JAIPUR . 7 ON RECORD THAT INDICATES ESCAPEMENT. THE AO HELD TH AT HE HELD THAT INTEREST ON INCOME TAX REFUND IS ASSESSABLE UNDER T HE HEAD INCOME FROM OTHER SOURCES WHEREAS DEDUCTION U/S 36(1)(VIIA) IS ALLOWABLE IN RESPECT OF ANY PROVISION FOR BAD AND DOUBTFUL DEBTS IN RELATIO N TO THE BUSINESS ONLY AND THEREFORE THE SAME CANNOT BE ALLOWED WITH REFER ENCE TO INCOME ASSESSABLE UNDER OTHER HEADS OF INCOME. ACCORDINGLY , HE DISALLOWED CLAIM OF DEDUCTION U/S 36(1)(VIIA) BY RS. 3,25,68,9 26/- (7.5% OF 43,42,52,356/-). FURTHER THE AO HAS CONSIDERED THE AMOUNT OF INTEREST RECEIVED ON INCOME TAX REFUND AT RS. 43,42,52,356/- INSTEAD OF RS.13,42,78,929/-. 3.2 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL WHERE THE LD. CIT(A) HELD THAT DEDUCTION U/S 36(1)(VIIA) IS TO BE ALLOWE D TO THE ASSESSEE WITH REFERENCE TO THE TOTAL INCOME AND NOT WITH REFERENC E TO THE BUSINESS BY OBSERVING AS UNDER:- 3.2 I HAVE CONSIDERED THE FACTS OF THE CASE; ASSES SMENT ORDER AND APPELLANT'S WRITTEN SUBMISSION. SAME ISSU E WAS INVOLVED IN THE CASE OF APPELLANT IN AY 2007-08 WHEREIN MY PREDECESSOR BY ORDER DATED 18.10.2012 HAD DECIDED THE ISSUE IN FAVOR OF APPELLANT. RELEVANT PORTION OF HER ORDER IS QUOTED BELOW:: 'IT IS SEEN THAT THE ASSESSING OFFICER AS PER HIS D ISCUSSION AT PAGE 4-5 OF THE ORDER HELD THAT INSURANCE COMMISSIO N, LEASE RENTAL AND INTEREST ON INCOME TAX REFUND ARE ASSESS ABLE ITA NO. 796//JP/2013 ACIT, CIRCLE- 6, JAIPUR VS. M/S. SBBJ, JAIPUR . 8 UNDER THE HEAD INCOME FROM OTHER SOURCES. FURTHER B Y REFERRING TO SECTION 28, SEC. 36(1) AND CLAUSE (VII A) OF SECTION 36(1) HE HELD THAT IT CANNOT BE THE INTENTI ON OF LAW TO ALLOW DEDUCTION IN RESPECT OF PROVISION FOR BAD AND DOUBTFUL DEBTS WITH REFERENCE TO THE TOTAL INCOME. ACCORDING TO HIM THE DEDUCTION U/S 36(1)(VIIA) IS A LLOWABLE IN RESPECT OF ANY PROVISION FOR BAD AND DOUBTFUL DE BTS IN RELATION TO THE BUSINESS ONLY AND IT CANNOT BE ALLO WED WITH REFERENCE TO INCOME ASSESSABLE UNDER OTHER HEADS OF INCOME. ACCORDINGLY HE DISALLOWED CLAIM OF DEDUCTIO N U/S 36(1)(VIIA) BY RS.1,25,99,060/- (7.5% OF 2,87,37,35 3 + 2,57,47,000 + 11, 35,03,112 ). 7. THROUGH WRITTEN SUBMISSION AND ARGUMENTS IT WAS STATED THAT THE AO IS MISREADING SECTION 36(1)(VIIA ) AS THE SECTION STATES THAT THE DEDUCTION IS TO BE LIMITED TO AN AM OUNT NOT EXCEEDING SEVEN AND ONE-HALF PER CENT OF THE TOTAL INCOME (COMPUTED BEFORE MAKING AN DEDUCTION UNDER THIS CLA USE AND CHAPTER VIA) AND AN AMOUNT NOT EXCEEDING TEN PER CENT OF THE AGGREGATE AVERAGE ADVANCES MADE BY THE RURAL BRANCH ES OF SUCH BANK. 8. IT IS SEEN THAT SECTION 36(1)(VIIA) PROVIDES FOR THE DEDUCTION OF 7.5% OF THE TOTAL INCOME, AND THE SAME IS REPRODUCED AS UNDER: '36(1) (VIIA) IN RESPECT OF ANY PROVISION FOR BAD A ND DOUBTFUL DEBTS MADE BY- (A)A SCHEDULED BANK NOT BEING A BANK INCORPORATED BY OR UNDER THE LAWS -OF A COUNTRY OUTSIDE INDIA] OR A NON- SCHEDULED BANK OR A CO-OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATI VE AGRICULTURAL AND RURAL DEVELOPMENT BANK], AN AMOUNT NOT EXCEEDING SEVEN AND ONE-HALF PER CENT OF THE TOTAL INCOME (COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CL AUSE AND CHAPTER VIA) AND AN AMOUNT NOT EXCEEDING TEN PER CENT ITA NO. 796//JP/2013 ACIT, CIRCLE- 6, JAIPUR VS. M/S. SBBJ, JAIPUR . 9 OF THE AGGREGATE AVERAGE ADVANCES MADE BY THE RURAL BRANCHES OF SUCH BANK.' (EMPHASIS SUPPLIED) FROM THE USE OF THE WORD 'TOTAL INCOME' AND 'COMPUT ED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER VIA' IN THE SECTION MAKES IT CLEAR THAT DED UCTION TOWARDS PROVISION FOR BAD AND DOUBTFUL DEBTS IS ALL OWABLE WITH REFERENCE TO THE TOTAL INCOME AND NOT WITH REF ERENCE TO THE BUSINESS INCOME ALONE. FURTHER HON'BLE SUPRE ME COURT IN CASE OF PADMASUNDARA RAO AND OTHERS VS. STATE OF TAMIL NADU 255 ITR 147 HELD THAT THE COURT CANNOT READ ANYTHING INTO A STATUTORY PROVISION WHICH IS N OT MENTIONED. THE AO IN THE PRESENT CASE HAS TRIED TO INTERPRET THE LAW WHICH IS NOT TENABLE AS PER THE P LAIN AND SIMPLE READING OF THE LAW. TOTAL INCOME MEANS ALL I NCOME. INCOME FROM INSURANCE COMMISSION, INTEREST ON INCOM E TAX REFUND AND LEASE RENTAL ARE INTEGRAL PART OF BANKING ACTIVITIES AS PER THE SECTION 6(1) OF THE BANKING REGULATIONS ACT,1949. IN THE PAST YEARS DEDUCTION U/S36(1)(VIIA) HAS BEEN ALLOWED TO THE APPELLANT WI TH REFERENCE TO THE TOTAL INCOME AND NOT WITH REFERENC E TO THE BUSINESS INCOME. THEREFORE THE DISALLOWANCE MADE BY THE AO OUT OF THE DEDUCTION ALREADY ALLOWED U/S 36(1)(V IIA) IS NOT AS PER LAW. THEREFORE ON MERITS ALSO THE DISALL OWANCE MADE BY THE AO IN RE-ASSESSMENT UNDER APPEAL IS NOT MAINTAINABLE AND IS DIRECTED TO BE DELETED.' SINCE THE FACTS ARE IDENTICAL THIS YEAR ALSO, RESPE CTFULLY FOLLOWING THE AFORESAID ORDER OF MY PREDECESSOR, IT IS HELD THAT DEDUCTION U/S 36(1)(VIIA) IS TO BE ALLOWED TO THE APPELLANT WITH REFERENCE TO THE TOTAL INCOME AND NOT WITH REFERENCE TO THE BUSINESS INCOME. ACCORDINGLY, THE REDUCTION IN DEDUCTION U/S 36(1)(VIIA) MADE BY AO IS NOT SUST AINABLE ON MERIT ALSO. ITA NO. 796//JP/2013 ACIT, CIRCLE- 6, JAIPUR VS. M/S. SBBJ, JAIPUR . 10 3.3 THE LD. DR RELIED ON THE ORDER OF THE AO. 3.4 THE LD. AR OF THE ASSESSEE RELIED ON THE ORDER OF THE LD. CIT(A) AND REITERATED THE SUBMISSIONS AS MADE BEFORE THE LD. C IT(A). 3.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD THA T THE SAME ISSUE IS INVOLVED FROM THE ASSESSMENT YEAR 2007-08 IN ASSESS EE'S OWN CASE WHEREIN THE LD. CIT(A) HAS GIVEN DUE CONSIDERATION TO HIS PREDECESSORS ORDER DATED 18-10-2012 (SUPRA) BY CONSIDERING THE A BOVE DECISION OF HON'BLE SUPREME COURT. THEREFORE, WE FIND NO REASO N TO INTERFERER WITH THE ORDER OF THE LD. CIT(A) BEING THE SIMILAR DECIS ION IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2007-08. THUS GROUND N O. 2 OF THE REVENUE IS DISMISSED. 4.1 THE ISSUES AS RAISED BY THE REVENUE IN ITS APPE AL FOR THE ASSESSMENT YEAR 2005-06 ARE SIMILAR TO THE ISSUES FOR THE ASSE SSMENT YEAR 2006-07 WHEREIN ORDER OF THE LD. CIT HAS BEEN SUSTAINED. TH US THE DECISION TAKEN BY THIS BENCH IN THE APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR 2005- 06 SHALL APPLY MUTATIS MUTANDIS TO THE APPEAL OF TH E REVENUE FOR THE 2006-07 ALSO. HENCE, BOTH THE APPEALS OF THE REVENU E ARE DISMISSED. ITA NO. 796//JP/2013 ACIT, CIRCLE- 6, JAIPUR VS. M/S. SBBJ, JAIPUR . 11 5.0 IN THE RESULT, THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 /01/2 016. SD/- SD/- (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 08 /01/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE- 6, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S. STATE BANK OF BIKANER & JAIPU R 3. VK;DJ VK;QDRVIHY ) @ CIT(A), JAIPUR 3. VK;DJ VK;QDR@ CIT, JAIPUR 4. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 5. XKMZ QKBZY@ GUARD FILE (ITA NO.796/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR