THE SALEM URBAN CO-OP BANK LTD.,SALEM vs. ACIT CIRCLE-1, SALEM

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Salem, dated 26.04.2019 and pertains to assessment year 2014-15.

Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the Assessing Officer disallowed the claim of the assessee under Section 36(1)(viia) of the Income-tax Act, 1961 (in short 'the Act') on the ground that the provision was not made in the books of account. Referring to the Profit & Loss account, the Ld.counsel submitted that a provision was made to the extent of ₹8,70,000/- in the books of account for the year ending 31.03.2014. This was specifically brought to the notice of the CIT(Appeals). According to the Ld. counsel, the CIT(Appeals) without considering the same has confirmed the order of the Assessing Officer. The assessee has filed a copy of Profit & Loss account for the financial year 2013-14 relevant to the assessment year under consideration and submitted that the matter may be remitted back to the file of the Assessing Officer for reconsideration.

We heard Shri AR.V. Sreenivasan, the Ld. Departmental Representative also. The copy of Profit & Loss account filed before this Tribunal indicates that a provision was made to the extent of ₹8,70,000/-. The assessee claims that even though the copy of Profit & Loss account was filed before the Assessing Officer as well as the CIT(Appeals), they have not considered the same. This Tribunal is of the considered opinion that when the assessee made provision in the books of account and produced Profit & Loss account before the Assessing Officer as well as the CIT(Appeals), the same cannot be ignored by the authorities below. Both the authorities below are bound to examine the same and find out whether such a provision was made in the books of account or not, as claimed by the assessee. Therefore, this Tribunal is unable to uphold the orders of the lower authorities. Accordingly, orders of both the authorities below are set aside and the issue of disallowance made under Section 36(1)(viia) of the Act is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter in the light of the material that was filed by the assessee and bring on record whether any provision was made in the books of account as claimed by the assessee and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.