Income Tax Appellate Tribunal - Mumbai
Shree Sidhivinayak Nagari Sahakari ... vs Asst Cit Cir Panvel, Panvel on 16 June, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "E ", MUMBAI
Before Shri P K Bansal, VP & Shri Pawan Singh, JM
ITA No. 5855/Mum/2015
Assessment Year : 2009-10
Shree Sidhivinayak Sahakari ACIT Circle- Panvel
Bank Ltd.,
Prabal, Mohopada, Rasayani, Vs.
Dist. Raigad
PAN AAAAS0937P
(Appellant) (Respondent)
Appellant By : Shri Piyush Chhajed
Respondent By : Dr A K Nayak
Date of Hearing : 14.06.2017 Date of Pronouncement : 16.06.2017
ORDER
Per P K Bansal, Vice-President:
This appeal has been filed by the assessee against the order of the CIT(A), dated 30.10.2015, for assessment year 2009-10. The assessee has raised the following effective grounds of appeal:
"The learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.1,81,000/- being amount debited to profit and loss account towards provision for standard assets in accordance with the RBI Circular."
2. We have heard the rival submissions and have carefully considered the same along with the orders of the authorities below. We noted that the assessee has debited a sum of ` 1,81,000/- being provision for standard 2 ITA No. 5855/Mum/2015 Shree Sidhivinayak Sahakari Bank Ltd assets in its profit & loss account. The assessee claimed that the said provision has mandatorily being made in view of the RBI guidelines. The Assessing Officer did not agree with the assessee, as in his opinion no provision except as provided u/s. 36(1)((viia) of the I.T Act can be allowed to the assessee. The assessee went in appeal before the CIT(A). The CIT(A) confirmed the order of the Assessing Officer observing as under:
"I have carefully considered the facts of the case, finding of the A.O., submission of the Ld. A.R. provisions of the above referred sections and material placed on record. In the case of banking assessee's , there is specific provision in the Act, where the banking assessee's can claim the provisions, provided the same has made as per term and condition, laid down u/s 36(l)(viia) of the Act. In this case I find that the claim of the appellant, for deduction of the provision of Rs1,81,000/-, @0.25% of outstanding standard assets may be allowed, either u/s36(l)(vii) read with section 36(2) or in an alternatively u/s37(l) of the Act, is not tenable, as the phraseology used therein is "provision for bad and doubtful debts" and not for any other provision. In the case of the Thane Dist. Central Co-op. Bank Ltd., the Hon'ble ITAT Mumbai Bench, Mumbai, vide appeal decided in ITA No.7135/MUM/2012, has decided the issued under appeal, by observing as under:-
The assessee had made provision on account of bad and doubtful debts of Rs 6 Crores as against its claim of deduction at Rs 31,49,57,717/-. The AO had allowed the claim of deduction u/s 36(l)(viia) of the Act to the extent of Rs 6 Crores. However, the other provision made on account of standard assets of Rs 2,69,70, OOO/- and One Time Settlement of Rs 1 Crores was held to be not allowable under the provisions of Sec 36(l)(viia) of the Act. The claim of the assessee before us is that the opening portion of Sec 36(l)(viia) of the Act states any provision for bad and doubtful debts and both the provisions made on account of Standard Assets and OTS were covered under the said language of the said section. We find no merit in the plea of the assessee in this regard. In view of the ratio having been laid down by the Tribunal in The Karad Janata Sahakari Bank Ltd Vs The TRO (Supra) and 3 ITA No. 5855/Mum/2015 Shree Sidhivinayak Sahakari Bank Ltd following the same parity of reasoning, we hold that the assessee is not entitled to claim of deduction u/s 36(l)(viia.) of the Act on account of provision made for Standard Assets."
3. The learned AR even though before us vehemently contended that since the provision has to be made in accordance with the RBI guidelines, the assessee must be allowed deduction u/s. 36(1)(viia) or, alternatively, u/s. 37(1) of the Act.
4. We do not agree with the submissions of the learned AR as, in our opinion, any deduction for the provision for standard assets can be allowed to the assessee u/s. 36(1)(viia) not otherwise. We do not find any illegality in the order of the CIT(A). In our opinion the CIT(A) has rightly relied on the order of the Mumbai Bench of this Tribunal in ITA No. 7135/Mum/2002. No contrary decision was brought to our knowledge. We, therefore, confirm the order of the CIT(A). Respectfully following the decision of this Tribunal (supra), the ground raised by the assessee is dismissed.
5. In the result, the appeal is dismissed.
Order pronounced in the open court on 16th day of June, 2017.
Sd/- Sd/-
(Pawan Singh) (P K Bansal)
JUDICIAL MEMBER VICE-PRESIDENT
Mumbai; Dated: 16th June, 2017
SA
4
ITA No. 5855/Mum/2015
Shree Sidhivinayak Sahakari Bank Ltd
Copy of the Order forwarded to :
1. The Appellant.
2. The Respondent.
3. The CIT(A),Mumbai
4. The CIT
5. DR, 'E ' Bench, ITAT, Mumbai
BY ORDER,
#True Copy #
Assistant Registrar
Income Tax Appellate Tribunal, Mumbai