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Income Tax Appellate Tribunal, “D” Bench, Mumbai
Before: Shri Shamim Yahya (AM) & Shri Ravish Sood (JM)
O R D E R Per Shamim Yahya (AM):-
This appeal by the assessee is directed against the order of learned CIT(A) dated 20.4.2017 and pertains to A.Y. 2013-14.
Grounds of appeal
reads as under :-
1. On the facts & in the circumstances of the case the Ld. Commissioner of Income Tax (Appeals) erred in disallowing the amount of Rs. 53,35,112/- being in the nature of Bad Debts written off in the Profit & Loss Account without understanding the facts & circumstances of the case & the reasons assigned for doing so are wrong & contrary to the provisions of the Income tax Act & the rules made there under.
2. The appellant craves leave to add, alter, amend and/or modify all or any of the above ground of appeal on or before the date of hearing
Brief facts of the case are as under :- The Assessing Officer in this case made a disallowance of claim of bad debts written off by observing as under :- “From the computation of income it was also noticed that the assessee bank has not made any provision for bad debts except for A.Y. 2009-10 of Rs.90,00,000/- & A.Y.2010-11 Rs. 1,00,00,000/- the total thereafter
2 M/s. The Malad Sahakari Bank Ltd. comes to Rs. 1,90,00,000/-. Hence it can be seen from the above tables Table-III and Table-IV, which are rectified after verification of computation of income that assessee has made provision of Rs. 1,90,00,000/- only from A.Y. 2007-08 to 2013-14 and total Bad debts written off during these years i.e. 2007-08 to 2013-14 amounts to Rs.4,09,61,344/-. It can also be seen from the Table-Ill wherein the assessee bank has claimed deduction u/s 36(1)(viia) totaling to Rs. 1,55,23,514/-. During the assessment proceeding, the AR of the assessee was asked to justify the claim of Bad debts written off amounting to Rs.53,35,112/- during the relevant assessment year. The AR of the assessee had no explanation whatsoever to defend its claim of bad debts written off. From the above it is concluded that assessee has claimed bad debts write off more than the deduction u/s 36(1)(viia) to his credit. The assessee bank has already claimed deduction u/s 36(1)(viia) of Rs.1,55,23,514/- until the current year. Hence the assessee bank is not eligible to claim the Bad' Debts written off amounting to Rs. 53,35,112/-. In view of the above discussion, Bad Debts written off amounting to Rs. 53,35,112/- in the computation of income is disallowed and added back to the total income of the assessee.
Upon assessee’s appeal learned CIT(A) confirmed the same. Against the order of learned CIT(A), assessee is in appeal before us.
We have heard both the counsel and perused the records. Learned counsel of the assessee submitted that the Assessing Officer has not at all appreciated the issue. He submitted that the assessee has given due explanation to the Assessing Officer. But he pleaded that Assessing Officer has wrongly noted that no explanation was given by the assessee. Learned counsel pleaded that assessee’s claim is duly in accordance with the prescription of the provisions of the act. He claimed that the assessee has duly debited the impugned sum and the same is allowable as per the provisions of the act. Learned counsel pleaded that an opportunity may be given to the assessee before the Assessing Officer to explain the facts and provisions of law in this regard.
Learned Departmental Representative fairly agreed with the above proposition.
3 M/s. The Malad Sahakari Bank Ltd.
Upon carefully consideration, we are inclined to remit this issue to the file of the Assessing Officer. The Assessing Officer is directed to properly consider the submission of the assessee and thereafter decide the issue as per law. Needless to add the assessee should be granted adequate opportunity of being heard.
In the result, this appeal filed by the assessee stands allowed for statistical purposes.
Order has been pronounced in the Court on 1.7.2019.