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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
आयकर अपीलीय अिधकरण “ए” �यायपीठ पुणे म� । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE �ी डी. क�णाकरा राव, लेखा सद�य एवं �ी िवकास अव�थी, �याियक सद�य के सम� BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM आयकर अपील सं. / ITA No.801/PUN/2017 िनधा�रण वष� / Assessment Year : 2013-14 Adarniya P.D. Patilsaheb Sahakari Bank Ltd., 15/3/C, Mangalwar Peth, Tilak Road, Karad, Satara-415110. .......अपीलाथ� / Appellant PAN : AAAJS0147E बनाम / V/s. ACIT, Satara Circle, ……��यथ� / Respondent Satara. Assessee by : Shri M. K. Kulkarni Revenue by : Shri S. P. Walimbe सुनवाई क� तारीख / Date of Hearing : 18.11.2019 घोषणा क� तारीख / Date of Pronouncement : 19.11.2019 आदेश / ORDER PER D. KARUNAKARA RAO, AM: This appeal is filed by the assessee against the order of CIT(A)-4, Pune dated 23.01.2017 for the Assessment Year 2013-14. 2. The effective ground raised by the assessee is as under :- “1) On the facts and in the circumstances of the case and in law the Ld. CIT(A) was not justified in sustaining the addition made by the A. O. of Rs. 4,40,000/- on account of rejection of claim of deduction of provision for depreciation on Standard Assets (BDDR). Such provisions are being annually made as per mandatory directions of the Reserve Bank of India issued under S. 45E? of the RBI Act, 1934. The direction are for to compensate the sudden erosion of the assets of the Bank with a view to improve the financial health of the Banks. The claim be allowed to the assessee.”
2 ITA No.801/PUN/2017 3. From the above extracted ground, it is evident that this is a case where the claim of the assessee is with regard to a provision made by the assessee by way of debit to Profit and Loss Account of Rs.4,40,000/- under the head ‘Provisions for depreciation on Standard Asset’. Explaining the said claim, it was stated before the Assessing Officer that a provision is made in the account books against a contingency which might occur in future with regard to Non-Performing Assets (NPAs). It was sought to be canvassed that the provision has been made in line with the RBI guidelines and, therefore, according to the assessee, the same was an allowable deduction within the meaning of section 36(1)(viia) of the Act. The Assessing Officer disallowed the same on the ground that it was only a contingent liability which cannot be allowed. The CIT(A) also sustained the disallowance following the judgment of the Hon’ble Supreme Court in the case of Southern Technologies Ltd. vs. JCIT, (2010) 320 ITR 577 (SC). 4. On hearing both the sides, we find it is undisputed fact that the impugned claim is disallowable “Contingent Provision” made on the basis of a percentage on the value of standard assets. The Provision does not reflect any particular debt which is doubtful or bad and it is only a general and non-specific Provision and it has been rightly classified as a contingent provision by the income-tax authorities. In-fact, the learned counsel for the assessee, at the time of hearing, fairly mentioned the contingent nature of the provision. Therefore, the lower authorities made no mistake in disallowing the same in view of the judgment of the
3 ITA No.801/PUN/2017 Hon’ble Supreme Court in the case of Southern Technologies Ltd. (supra). 5. Considering the above settled nature of the issue, we are of the opinion, the order of the CIT(A) is fair and reasonable on this issue and it does not call for any interference. Accordingly, the ground raised by the assessee is dismissed. 6. In the result, the appeal of the assessee is dismissed. Order pronounced on 19th day of November, 2019. Sd/- Sd/- (िवकास अव�थी /VIKAS AWASTHY) (डी. क�णाकरा राव/D. KARUNAKARA RAO) �याियक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 19th September, 2019. Sujeet आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A)-4, Pune. 4. The Pr. CIT-3, Pune. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.