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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
PER MANISH BORAD, AM.
This appeal of Assessee pertaining to A.Y. 2014-15 is directed
against the order of Ld. Commissioner of Income Tax(Appeals)-I,
Indore (in short ‘CIT(A)’), dated 22.05.2017 which is arising out of
the order u/s 143(3) of the Income Tax Act 1961(hereinafter called
as the ‘Act’) framed on 17.03.2016 by dcit-3(1), Indore.
The assessee has raised following grounds; 1
Narmada Jhabua Gramin Bank ITA No.549/Ind/2017 “1. That Ld.CIT(A) has erred in maintaining the disallowance of the claim of the assessee made u/s 36(1)(vii)(a). 2. It was proved before the Ld.AO and the Ld.CIT(A) that the assessee is entitled to the deduction u/s 36(1)(vii)(a) even if no reserve is created. The assessee relied on the decision of the Hon'ble Supreme Court in the case of M/s. Southern Technologies Ltd. Vs CIT and the decision of the Bangalore Bench in the case of Syndicate Bank Vs. DCIT.”
At the outset Learned Representative for the assessee
conceded to the fact that the issue raised in the instant appeal
stands already decided against the assessee by the Co-ordinate
Bench, Indore in the case of M/s. Narmada Malwa Grameen Bank
V/s ACIT 2(1), Indore M.A.No.104/Ind/202 (arising out I.T.A.
No.162/Ind/2011).
Per contra Ld. Departmental Representative supported the
orders of lower authorities as well as the order of Tribunal in the
case of M/s. Narmada Malwa Grameen Bank V/s ACIT 2(1),
Indore.
We have heard rival contentions and perused the records
placed before us. The assessee’s grievance is regarding the
disallowance of claim u/s 36(1)(vii)(a) of the Act. It is contended in
Narmada Jhabua Gramin Bank ITA No.549/Ind/2017 the grounds of appeal that the assessee is entitled to the deduction
u/s 36(1)(vii)(a) even if no reserve is created. We however find that
the same issue stands decided against the assessee’s appeal by the
Co-ordinate Bench in the case of M/s. Narmada Malwa Grameen
Bank V/s ACIT 2(1), Indore(supra) holding as follows that the
deduction u/s 36(1)(vii)(a) of the Act is to be allowed only to the
extent of amount written off in the books of accounts:-
“2. Through this petition it was contended by Learned A.R. that Tribunal has not decided the ground raised with respect to allowability of claim of deduction u/s 36(1)(viia) of the I.T. Act, however, the matter has been restored to the file of the Assessing Officer to recomputed the claim of deduction to the extent of amount written off in the books of account though such write off was not partywise. 3. We have gone through the order of the Tribunal dated 29/03/2013 wherein the issue with regard of allowability of claim of deduction u/s 36(1)(viia) of the Act was decided after discussing various decisions of Hon'ble Supreme Court as well as High Court in para 11 to 16, the issue with regard of quantification of deduction u/s 36(1)(viia) was restored to the file of the Assessing Officer for recomputing the claim of deduction to the extent of amount written off in the books of account, even though such write off was not partywise. The contention of Learned A.R. was that full amount of provision for bad and doubtful debt should be allowed irrespective of
Narmada Jhabua Gramin Bank ITA No.549/Ind/2017 entry made in the books of account. We are not in agreement with the assessee’s contention in so far as provision contained in clause (viia) of section 36 clearly starts with the word ”in respect of provision for bad and doubtful debt made by schedule bank….” Thus, to the extent of provision made for bad and doubtful debts in the books of account, can be allowed. We do not find any mistake in the order of the Tribunal, which can be rectified u/s 254(2) of the Act. On the contrary, the Tribunal has given a favourable finding and direction to the Assessing Officer to allow the claim of deduction to the extent of amount written off in the books of account notwithstanding the fact that such write off was not partywise. This observation was made keeping in view the verdict of Hon'ble Supreme Court in the case of Vijaya Bank 323 ITR 166”.
We therefore in the facts and circumstances of the case and
respectfully following the decision of Co-ordinate Bench dismiss the
grounds of appeal raised by the assessee.
In the result the appeal of the assessee is dismissed.
The order pronounced in the open Court on 12.10.2018.
Sd/- Sd/-
( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER �दनांक /Dated : 12 October, 2018 /Dev 4
Narmada Jhabua Gramin Bank ITA No.549/Ind/2017
Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By order Asstt.Registrar,I.T.A.T., Indore