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2017 (3) TMI 1385 - ITAT RAJKOTPenalty u/s 271(1)(c) - provision debited to Profit & Loss account in respect of the debt due from Madhavpura Mercantile Co-op Bank Limited - Held that:- The assessee’s claim was not allowable because assessee had not reduced the figure of advances in which the impugned amount was included, rather kept the said balance intact and made corresponding provision which was claimed as deduction. This treatment in account could not be said to be write off of the impugned amount and, therefore, the assessee’s claim was not allowable. However, it cannot be disputed that assessee had furnished all the necessary details in regard to FDR of ₹ 4,20,47,179/- placed with Madhavpura Mercantile Co-op Bank Limited which included the impugned amount. Assessee’s explanation that the amount was kept intact in the books is quite reasonable and bonafied considering the overall facts. At best, this can be said to be a claim not sustainable in law. However, that automatically does not lead to levy of penalty. - Decided in favour of assessee Disallowance of Reserve for schedule assets - Held that:- The assessee’s claim was based on RBI’s directive, however, admittedly RBI’s directive do not govern the provisions of Income Tax Act. The Ld.CIT(A) has also pointed out that in the case of Southern Technologies Ltd. Vs. JCIT [2010 (1) TMI 5 - SUPREME COURT OF INDIA ], the Hon'ble Supreme Court has also upheld this view. He further pointed out that the return of income was filed by assessee on 39.9.2008 and the issue got settled on 11.01.2010. Thus, prior to this date the issue was highly debatable. We do not find any reason to interfere with the order of the Ld.CIT(A) because assessee had disclosed all necessary facts in regard to its claim and at best, it could be said to be a claim not sustainable in law. - Decided in favour of assessee
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