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TMI Blog2012 (10) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... r before finalizing the balance sheet. It is also seen that non performing assets are classified and quantified as per guidelines of RBI by the banks in respect of cases where recovery becomes difficult. Hence, the provision for NPA is integral part of the business of banking wherein such provision more or less corresponds to the bad debts. It is also true that the assessee, being a co-operative bank is eligible to claim deduction of its entire income from the business of banking u/s 80P. Keeping in view the above facts it could be safely held that there was not a deliberate attempt to claim deduction of provision for NPA. As decided in CIT Versus RELIANCE PETROPRODUCTS FVT. LTD.[2010 (3) TMI 80 - SUPREME COURT] a mere making of the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.10.2006 declaring loss of Rs. 93,31,795/-. The said return was processed under Section 143(1) of the Act on 14.03.2007. The assessment was framed under Section 143(3) of the Act by the Assessing Officer vide order dated 20.10.2008 (Annexure A-2) and the loss was assessed at Rs. 22,65,588/-. The assessee had claimed expenses of Rs. 70,66,207/- for NPA provision under Section 36(viia) of the Act. The Assessing Officer made addition of Rs. 70,66,207/- holding that the assessee was not entitled to the said deduction. Accordingly, the penalty proceedings under Section 271(1)(c) of the Act were initiated for furnishing inaccurate particulars of income and penalty amounting to Rs. 22 lacs being 100% of tax sought to be evaded was imposed vide or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not bring the case, there would be no question of inviting the penalty under section 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to the inaccurate particulars. 7. In the present case, the assessee had claimed expenses of Rs. 70,66,207/- for NPA provision under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the auditor before finalizing the balance sheet. It is also seen that non performing assets are classified and quantified as per guidelines of RBI by the banks in respect of cases where recovery becomes difficult. Hence, the provision for NPA is integral part of the business of banking wherein such provision more or less corresponds to the bad debts. In the instant case, the auditors have checked this aspect and finalized the balance sheet after claiming the deduction of provision for NPA in the profit and loss account. It is also true that the assessee, being a co-operative bank is eligible to claim deduction of its entire income from the business of banking u/s 80P of the Act. Keeping in view the above facts it could be safely held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the assessee . In our considered view, the ratio laid down by the Hon'ble Supreme Court in the case of CIT Vs. Reliance Petroproducts (P) Ltd. (supra), is squarely applicable to the facts of the present case. In the instant case also, wrong claim made by the assessee was held inadmissible. 7. In the case of CIT Vs. The Shahabad Coop. Sugar Mills Ltd. (2011) 322 ITR 73 (P H), the Hon'ble Punjab and Haryana High Court concluded that the assessee-society engaged in marketing of sugar by its members making of wrong claim under sections 80(2)(d) and 80P cannot be at par with concealment or giving of inaccurate information, which may invoke penalty under section 271(1)(c) of the Act. 8. In view of the above findings which have not been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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