2012 (7) TMI 330 - AT - Income Tax

Decline of claim of deduction u/s 36(1)(viia) of the Act with reference to the advance made by rural branches - assessee has classified rural branches on the basis of 1991 census whereas as per the Assessing Officer, census of 2001 was published in public domain on 26.3.2001 as mentioned in Census of 2001 Series 1 issued by Registrar General and Census Commissioner, India, at Part-V page XII of the said report Held that - Assessing Officer to recompute the amount of deduction eligible u/s 36(1)(viia) of the Act as per Census of 1991 rather than as per Census of 2001 which was not available in the public domain as on the first day of the relevant assessment years under consideration - appeals of the assessee are partly allowed for statistical purposes

Summary

Issues:
1. Claim of deduction u/s 36(1)(viia) based on Census data of rural branches.
2. Classification of rural branches based on Census figures of 1991 vs. 2001.
3. Applicability of Census data for deduction u/s 36(1)(viia) for assessment years 2002-03 and 2003-04.
4. Judicial precedent on the relevance of Census data for rural branch classification.

Analysis:
1. The appeals were filed against the Commissioner of Income Tax (Appeals) order for the assessment years 2002-03 and 2003-04 regarding the deduction claim u/s 36(1)(viia) based on rural branch advances. The Assessing Officer declined the claim as the rural branches were classified using 1991 Census data instead of the 2001 Census data available before the relevant assessment years. The Commissioner upheld this decision, leading to the appeal.

2. The main contention revolved around the classification of rural branches based on Census data. The Assessing Officer argued that since the 2001 Census data was available before the assessment years, the classification should have been based on it. The appellant, citing a similar case, emphasized that final Census figures were only available in 2004, making the 1991 Census data more appropriate for the deduction claim u/s 36(1)(viia).

3. The Tribunal analyzed the relevance of Census data for the deduction claim u/s 36(1)(viia) for the assessment years in question. Relying on the Chandigarh Bench's decision, the Tribunal concluded that since the final 2001 Census data was not available before the assessment years, the 1991 Census data should be used for rural branch classification. The Tribunal directed the Assessing Officer to recalculate the deduction based on the 1991 Census data.

4. The Tribunal referred to the Chandigarh Bench's judgment, which clarified that the final Census figures are crucial for determining rural branch classification for the deduction claim u/s 36(1)(viia). The decision highlighted that provisional Census data is not suitable for such computations, emphasizing the importance of using published final figures. The Tribunal's decision aligned with this interpretation, leading to the partial allowance of the appeals for statistical purposes.

In conclusion, the Tribunal's decision emphasized the importance of using final Census figures for rural branch classification in determining the deduction claim u/s 36(1)(viia) for the relevant assessment years, ultimately leading to the partial allowance of the appeals.