State Bank of Hyderabad V. Additional Commissioner of Income Tax Range-3 Hyderabad

ITTA/61/2014

AI Insights

The case involves the State Bank of Hyderabad appealing against the decision of the Income Tax Appellate Tribunal concerning the assessment year 2008-09. The primary issues revolved around the provisions for bad and doubtful debts under Section 36(1)(viia) of the Income Tax Act. The Tribunal had restricted the claim for provisions made for rural branch advances to the actual provisions made in the books, referencing several Supreme Court judgments. The High Court of Andhra Pradesh, after hearing the appeal, decided to remand the matter back to the Assessing Officer, directing a fresh decision in accordance with the Supreme Court's rulings, without the influence of the Tribunal's previous observations.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 796292 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 19-02-2014
• Assessment Year: misc
• Other Referred Cases: Catholic Syrian Bank case (343 ITR 270), Vijay Bank case (323 ITR 166), TRF Limited case (323 ITR 397), Syndicate Bank case (78 ITD 103)
• Laws Referred To: Section 36(1)(viia) of the Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Keywords: Bad and doubtful debts; Remand; Supreme Court Judgments; Provision made in the books
• Section: 36(1)(viia)

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.61 OF 2014 DATED:19.2.2014 Between: State Bank of Hyderabad Hyderabad … Appellant And Additional Commissioner of Income Tax Range-3 Hyderabad … Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.61 OF 2014 JUDGMENT: (per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is preferred against the judgment and order of the learned Tribunal, dated 28.3.2013, in relation to the assessment year 2008-09 and sought to be admitted on the following suggested questions of law. A. “Whether the claim under Section 36(1)(viia) is to be made by the bank to the extent of provision made in the books or irrespective of provision made in the books? B. Whether the Tribunal is correct in restricting the claim for provision for bad and doubtful debts in respect of rural branch advances to be actual provision made in the books based on judgment of the Hon’ble Supreme Court in Catholic Syrian Bank case (343 ITR 270), Vijay Bank case (323 ITR 166) and TRF Limited case (323 ITR 397) when the said issue never arose for consideration in any of these cases? C. Whether the Tribunal erred in not following or referring to the decision of the Income Tax Appellate Tribunal, Bangalore Bench in Syndicate Bank case (78 ITD 103)?” We have heard the learned counsel for the appellant and gone through the impugned judgment and order of the learned Tribunal. The grievance of the appellant relates to doubtful and bad debts. The learned Tribunal has not decided the issue in the light of the Supreme Court judgments. It set aside the impugned judgment and order of the authorities below and remanded the matter to the file of the Assessing Officer to decide the same in the light of the judgments of the Supreme Court in the cases of (a) TRF Limited (323 ITR 397), (b) Vijaya Bank Limited (323 ITR 166 and (c) Catholic Syrian Bank Ltd (343 ITR 270). No argument can be accepted that the Tribunal has no power to remand the matter, but we are of the view that the matter is remanded rightly to decide afresh in the light of the Supreme Court judgments. The legal observation recorded in the impugned judgment and order by the learned Tribunal cannot be a binding factor for taking decision. As such, we clarify that the observation of the learned Tribunal will not be influencing and binding factor for rendering the decision by the Assessing Officer. Accordingly, we do not admit the appeal and direct the Assessing Officer to decide the matter in terms of the judgment of the learned Tribunal and as clarified by our judgment and order within a period of three months from the date of communication of this order. With the above direction, the appeal is dismissed. There will be no order as to costs. ________________________ K.J. SENGUPTA, CJ _______________________ SANJAY KUMAR, J 19.2.2014 bnr "