THE NANDURA URBAN CO-OP BANK LTD.,BULDHANA vs. C.I.T-1, NAGPUR

5 IN THE INCOME TAX APPELLATE TRIBUNAL Nagpur Bench; Nagpur Before Shri P K Bansal, Vice President and Shri Pawan Singh, Judicial Member ITA No.lS4NAG/2015 (Assessment Year: 2010-11) The Nandura Urban Co- Commissioner of Incomc Tax-] op. Bank Ltd, Aayakar Bhavan Kalpataru'_ Station Road Vs . Civil Lines, Nagpur Nandura Dist Buldhana 443404 PAN AAAAT3041F Appellant Respondent Appellant by: Shri J.M, Ranade Respondent by: Shri Geetesh Kumar APPE,; 3 Date of Hearing: 20.11.2017 Date of Pronouncement: 20,11,2017 0 RD ER Per Pawan Bingh, JM This appeal under Section 253 of the Income Tax Act by the assessee is directcd against the order ol the Principal Commissioner of Income Tax- 1, Nagpur dated 26.03.2015 for A.Y. 2010-11, 2 Assessee has raised the following grounds of appeal: ~1 , The leamed CIT-[ Nagpur erred in passing order u/s 263 %f the Act dated 26.02.2014 without giving any opportunity of being heard to the assessee: 2 The learned CIT [ Nagpur erred in confirming the order of the AO denying Deduction of Rs.1,29,23,500 on the ground that the bank has made provision for Bad & doubtful debts which should be restricted to 7.59 of profits or I%k of rural advances u/ $ 36 (1} (viia} of the Act; 3 The leared CIT fuiled to appreciate that your assessee is @ co- operative bank govemed by RBI regulations; and during the year, bank hos made provision for bad doubtful debts for Rs. 1,29,23,500 a5 per RBI guidelines Also section 361Jviia} was not ITA mio_ 154/ ug;_017 ""Tie Nandura Urlan Co-op. Rok Ltd. applicable to dssessee CS it did not had any rral branches specified under the section 4 The leamed CIT ignored thle fact that the provision for bad and doubtful debts are made aS per RBl guidelines as per percentages prescribed depending 01[ quality 0f debts / advances The bud debt provisions pre created for borrowers wha had tured NVan Perforing Assets {NPAJ due to non payment of" interest and principal within due date; The intentiorl ef creating such provisions is to sel aside profits 0f bank to protect against losses due to bad debts, which may arise in future. Hence the bad and doubtful debt provision is regulat business Ioss in banking business recognized 05 per methodology prescribed by the regulator ie. RBI Hence the leared CIT erred in appreciating the abave fact in his order u/ 5 263. 5, The leamed CIT erred in disallowing the assessee claim of exemption or long termt capital gainis on sale of government securities: Assessee had infact incurred Loss On sale of govemment securities after claiming indexation: But the leamed CIT denied the assessee any opportunity of being heard $0 that 3S explanation and evidence could be produced before the leamed 5744 CIT in support of assessee claim At the outset of he hearing, WC have noted that the appeal i8 nol maintainable as the order is not appealable belore the Tribunal A; the present appeal i8 filed againgt the order passed by learned Pr.CIT under section 264 ol the Act The learned A.R: for the assessee could not show law to convince LS 18 to why the appeal is maintainable before any Tribunal, As there is no express reference [or maintaining appeal to the Tribunal under section 253 of the Act tp file appeal against the order passcd under section 264 of the Act, the appeal filed by the assessee is dismissed. 4 In the result; the appeal (iled by the assesgee i8 dismissed: Order pronounced in the open court on 20th November, 2017, - Sd}- (PK: Bansal) (Pawan Singh) Vice President Judicial Member Nopur. Dated: 20th November, 2017 '11 *0. 154 ~ag; _O1S Tu"' Nanda Urba! Co-on. TS1tk Lfc]. Copyto: 1_ The Appellant 2, The Responderit 3 The CITIA} Nagpur 4 The CIT [, Nagpur The DR, Bench, ITAT; Nagpur Utbl Ale APp By Order Hboyndec 4sAlA #@ytstrar ITAT; Burthuatetetdlapur &RuTr #itmt ir4 Income Tax _ F7 Tribun?/ T57 4c / :#J;ii[ Bench Copy} / 9 # JMN n,p.