CANARA BANK,BENGALURU vs. DEPUTY COMMISSIONER, BENGALURU

ITA 499/BANG/2025Status: DisposedITAT Bangalore25 August 2025AY 2016-17Bench: SHRI PRASHANT MAHARISHI, VICE – PRESIDENT\nAND\nSHRI PRAKASH CHAND YADAV, JUDICIAL MEMBER\nITA No. 499/Bang/2025\nAssessment Year : 2016-17\nM/s. Canara Bank,\nFM Wing, Head Office,\n112, J C Road,\nBengaluru – 560 002.\nPAN: AAACC6106G\nAPPELLANT\nThe Deputy\nCommissioner of\nIncome Tax,\nCircle - 2(2)(1),\nVs. Bengaluru.\nRESPONDENT\nAssessee by\n: Shri S. Ananthan, CA\nRevenue by\n: Shri Shivanand Kalakeri,\nCIT-DR\nDate of Hearing\n: 24-06-2025\nDate of Pronouncement\n: 25-08-2025\nORDE8 pages
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What did the Tribunal hold?

The Tribunal allowed depreciation on note counting and weighing machines based on consistency. The issue of penalty paid to RBI was remanded to the AO for verification of its nature. The disallowance of software expenses was also restored to the AO for further examination. The issue of recovery of bad debts was also remanded to the AO.

What were the facts?

The assessee, Canara Bank, appealed against disallowances made by the Assessing Officer (AO) and partly allowed by the CIT(A) for AY 2016-17. The disallowances included bad debts, unrealized gains on forward contracts, CSR expenditure, trust expenses, depreciation, penalty, and software expenses.

What were the issues?

The key issues were the rate of depreciation on certain machines, the nature of payments made to RBI, and the allowability of software expenses. The Tribunal also considered the taxability of recovered bad debts.

Which sections of the Income-tax Act were involved?

Section 36(1)(vii),Section 37(1),Section 14A,Section 36(1)(viii)

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Income Tax Appellate Tribunal, A BENCH: BANGALORE

Before: SHRI PRASHANT MAHARISHI, VICE – & SHRI PRAKASH CHAND YADAV

For Appellant: Shri S. Ananthan, CA
For Respondent: Shri Shivanand Kalakeri

PER PRAKASH CHAND YADAV, JUDICIAL MEMBER:

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1.

Present appeal of the assessee is arising from the order of the Ld.CIT(A) dated 10/01/2025 having DIN & Order No: ITBA/NFAC/S/250/2024- 25/1072081191(1) and relates to the A.Y. 2016-17. 2. The brief facts of the case as coming out from the orders of authorities below are that the assessee is bank, filed its return of income for the impugned year on 29.11.2016 declaring an income of Rs.2183.78 crores. This return of income was taken up for scrutiny and thereafter assessment u/s.143(3) was completed by making following disallowances: SI. No. Nature of additions/disallowances Amount in Rs. 1 Disallowance of Bad

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