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TMI Blog2012 (8) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... annot exercise his jurisdiction u/s 263 on that aspect of the matter. However, revisionary order is upheld in respect of erroneous deduction provided by AO in case for provision for bad and doubtful debts. Matter is restored back to file of AO for the purpose of computation of deduction u/s 36(1)(viii) - Appeal partly allowed. since more than 51% shares of the assessee-bank were held by the Central Government, it was a “government company” as defined u/s 617 of the Companies Act and as such it became financial corporation within the meaning of proviso to section 36(1)(viii). On the contrary, the ratio in the case before the Cochin Bench of the Tribunal is not attracted because there the assessee was a foreign bank, namely, Federal Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion has been defined in clause (a) of section 36(1)(viii) to include public company and also a government company. Submitting that the assessee is a bank established under a Central Act, was covered within the term Indian company as per 2(26)(ia), hence the same qualified as a financial corporation engaged in the activities of providing long term finance for industrial and agricultural development and development of infrastructure development in India. The assessee also relied on the amendment made by the Finance Act, 2007, to section 36(1)(viii) which specifically includes a banking company . The learned CIT did not accept this contention as in his opinion the inclusion of banking company within the definition of Rs.specified entity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and doubtful debts includes a sum of Rs.405,17,20,944 made with reference to standard assets, which has been held to be not in the nature of provision for Rs.bad and doubtful debts within the meaning of section 36(1)(viii), only the provision for Rs.bad and doubtful debts made by the assessee, excluding the above sum, may be considered for determining the deduction admissible under section 36(1)(viii) of the Act. 3. We have heard the rival submissions and perused the relevant material on record. It is noticed that the learned CIT exercised his power u/s 263 in respect of assessment year 2005-2006 as well. That case came up for adjudication before the Tribunal, in which the issue similar to the one set out at (iii) above was raised. Vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 2004-2005. 5. We are not convinced with the view point canvassed by the learned Departmental Representative against the allowing of deduction in the year under consideration on the ground that the Tribunal in the case of Union Bank of India (supra) has held that since more than 51% shares of the assessee-bank were held by the Central Government, it was a government company as defined u/s 617 of the Companies Act and as such it became financial corporation within the meaning of proviso to section 36(1)(viii). On the contrary, the ratio in the case before the Cochin Bench of the Tribunal is not attracted because there the assessee was a foreign bank, namely, Federal Bank Limited, which obviously is not a Government company as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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