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TMI Blog2012 (9) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... the provision for standard assets. 1(a) While allowing the relief of RS.36,75,000/- Ld. CIT(A) has failed to appreciate that the AO has clearly held that out of provision of Rs.50,00,000/- only Rs.13,25,000/- were on a/c of bad and doubtful debts and the balance amount of Rs.36,75,000/- was on account of standard assets and as per provisions of section 36(1)(viia) only provision for bad and doubtful debts was allowable as deduction. 2. It is prayed that the order of the ld. CIT(A) has failed to appreciate that it was contingent liability and was not allowable as business expenditure. 3. The appellant requests for leave to add or amend or alter the grounds of appeal before the appeal is heard and disposed of." 3. The brief facts as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause. We have fulfilled both the conditions mentioned above i.e. provision made for bad & doubtful debts is well within prescribed limits and the amount has been actually debited to the provision for bad & doubtful limits and the amount has been actually debited to the provision for bad & doubtful debts during the year. Hence, it is a very much allowable deduction in our case. As regards decision of Hon'ble Special Bench of ITAT, Delhi in the case of New India Industries Ltd. vs. ACIT 2007, 18 SOT 51, it was in the case of a non banking finance company in respect of deduction u/s 36(1)(vii) of the Income Tax Act. Whereas ours is a bank and our claim is u/s 36(1)(viia) of Income Tax Act. In para 12 at page 12 of the order, it has clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her hand the provision in respect of standard assets represents only a contingent liability not allowable as business expenses. Therefore, an addition of Rs.36,75,000/- is made to the total income of the assessee." 4. Before the Ld. CIT(A), the assessee submitted the explanation especially the meaning of standard, sub-standard and doubtful or loss depending upon the nature of advance and value of security available against such loan, which are the guidelines of Reserve Bank of India (In short 'RBI') and the assessee has followed those guidelines. The assessee submitted the explanation available at Ld. CIT(A)'s order at pages 1 to 7 in paras 7. The same was considered and accepted by the Ld. CIT(A) who allowed the claim of the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted before the Ld. CIT(A). 6. We have heard the rival contentions and perused the facts of the case. We are convinced with the arguments made by the Ld. DR, Sh. R.L. Chhanalia that the Ld. CIT(A) is not justified in accepting the explanation of the assessee which was not made before the A.O. The same should have either been admitted under Rue 46A of the I.T. Rules, 1962 and by having a remand report from the A.O. The same has not been done by the Ld. CIT(A). Therefore, the order of the Ld. CIT(A), at the outset, is against the principles of natural justice and deserves to be reversed. But in the interest of justice, the matter is set aside to the file of the A.O. who will examine the claim of the assessee and find out whether the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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