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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
per the RBI norms cannot be treated as deductible expenditure u/s
36(1)(vii) or (viia) of the I.T. Act. The Reserve Bank norms have nothing
to do with computation of taxable income under I.T. Act. Therefore, the
assessee is before us.
Before us, the ld. Counsel for the assessee submitted that this
issue on similar facts and circumstances has already been decided
against the Revenue by this very Bench in the case of The District
Central Co-operative Bank Ltd. vs. ACIT vide order dated 26.9.2018 in
ITA No.47/Ind/2014 (copy of the order has been filed before us). On the
other hand, ld. CIT/DR conceded the fact that the issue is covered vide
aforesaid order of the ITAT against the Revenue.
Considering the rival submissions and the fact that the issue on
identical facts and circumstances is covered vide our order dated
26.9.2018 (supra) against the Revenue, we direct the Assessing Officer
to delete the addition. Accordingly, this ground of appeal of the assessee
is allowed.
So far as ground no.2 with regard to confirmation of the addition of
Rs.2 crores being the special reserve created by the assessee is
3 Jila Sahakari Kendriya Bank ITA No.562 of 2017
concerned, the brief facts giving rise to the ground are that the
Assessing Officer and ld. CIT(A) were of the view that the expenditure
claimed by the assessee as special provision amounting to Rs.2 crores
cannot be treated as expenditure in the normal course of the business.
There is no provision of allowability u/s 36 or u/s 37 of the I.T. Act. The
provision and expenses in the P & L account as per RBI norms cannot
be treated as deductible expenditure u/s 36(1)(viia) of the I.T. Act. The
section 36(1)(viia) allow the deduction of actual bad debts only not on
the basis of provision. Being aggrieved, the assessee is before us.
Before us, the ld. Counsel for the assessee submitted that this
issue on similar facts and circumstances has already been decided
against the assessee by this very Bench in assessee’s own case for the
assessment year 2012-13 vide order dated 17.8.2018 in ITA
No.386/Ind/2017 (copy of the order has been filed before us). On the
other hand, ld. CIT/DR conceded the fact that the issue is covered vide
aforesaid order of the ITAT against the assessee.
Considering the rival submissions and the fact that the issue on
identical facts and circumstances is covered in assessee’s own case for
the assessment year 2012-13 vide our order dated 17.8.2018 (supra)
against the assessee, we confirm the order of the ld. CIT(A) on this
issue. Accordingly, this ground of appeal of the assessee is dismissed.
4 Jila Sahakari Kendriya Bank ITA No.562 of 2017
Finally, the appeal of the assessee is partly allowed.
Order was pronounced in the open court on 23.10.2018.
Sd/- Sd/- (MANISH BORAD) ( KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated : 23.10.2018 !vyas! Copy to: Assessee/Respondent/CIT(A)/CIT/DR, Indore