2014 (7) TMI 259

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..... n the facts and in the circumstances of the case the Ld.CIT(A) XXX, Kolkata has erred in law as well as in facts by sustaining the disallowance of Rs. 7,12,243/- debited in Profit & Loss a/c. as overdue interest reserve." 3. In this case the AO disallowed the overdue interest reserve by observing that the provision made by the assessee was not based on facts but merely on surmise and the figure has not been ascertained on actual basis. The AO further observed that the assessee failed to justify that the loans had become bad or for that matter interest receivable from those loans, the assessee was required to create such reserve and no details have been filed. The AO further mentioned that there was never such type of claim in any of the pa .....

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..... k. The ld. Counsel of the assessee further submitted that similar provision for overdue interest reserve has been made by the assessee in the prior period on the basis of RBI guidelines issued in this regard and the same was allowed.. We find that it is settled law that provisions made as per RBI guidelines are allowable. Furthermore we note that similar provision made in the previous period has been allowed to the assessee. In such circumstances we find that the assessee has a reasonable case and the orders of the authorities below deserve to be set aside on this issue. Hence accordingly we set aside the orders of the authorities below and decide the issue in favour of the assessee. 6. In the result the appeal of the assessee stands allow .....

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..... uced before the ld. CIT(A). Considering the same the ld. CIT(A) held that the payments to those persons did not attract liability of TDS u/s 194J of the Act. Therefore such payments did not warrant disallowance u/s 40(a)(ia) of the Act. 9. Against the above order the revenue is in appeal before us. 10. We have heard both the counsel and perused the records. We find that since the payment is related to the salary payment there is no question of deduction of TDS u/s 194J of the Act. Accordingly we do not find any infirmity in the order of the ld. CIT(A) and we uphold the same. 11. Apropos ground no.2 : On this issue the AO noted that the assessee was asked to furnish details of interest where the assessee is required to make TDS but no TDS .....

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