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TMI Blog2019 (8) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... and doubtful debts to the extent of Rs. 192,02,99,716/-. In the assessment proceeding U/s.143(3) of the Act, the assessee was allowed deduction U/s.36(1)(viia) of the Income-Tax Act, 1961 (in short 'the Act') to the extent of Rs. 125,43,91,016/- restricting the provision for non-performance asset debited to the P&L account. According to the Ld.AR, the Assessing Officer disallowed bad debts written off relating to rural debt amounting to Rs. 37.28 crore and allowed non-rural bad debts to the extent of Rs. 304.36 crore. According to the Ld.AR, the Assessing Officer reopened the assessment in order to completely deny bad debts written off relating to non-rural debts. According to the Ld.AR, the bad debt written off relating to non-rural debts is not affected by proviso to Section 36(1)(vii) of the Act. Therefore the reopening is not justified. 2.1.2 On the contrary, Shri Clement Ramesh Kumar, the Ld. Departmental Representative submitted that the assessment of the assessee was re-opened on identical circumstance for the assessment year 2006-07. According to the Ld.DR the re-opening of the assessment was based upon the subsequent information available with the Assessing Officer. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the lower authorities. Accordingly the orders of both the authorities below are set aside and the addition made U/s.36(1)(vii) of the Act is deleted. 3. Now coming to the Department appeal for the assessment year 2008-09 in ITA No.1894 of 2017. 3.1 The only issue arises for consideration is deduction U/s.36(1)(viia) of the Act based on advance outstanding and not on incremental advances. 3.1.2 Shri Clement Ramesh Kumar, the Ld. Departmental Representative submitted that for deduction U/s.36(1)(viia) of the Act, the Assessing Officer is expected to calculate the deduction based on incremental advance for each month and not on the outstanding advance on the last day of the relevant month. However the CIT(A) by following the order of this Tribunal in the assessee's own case for the assessment year 2010-11 in ITA No.2030/Mds/2013 dated 26.09.2014 allowed the claim of the assessee. We heard Shri C. Naresh, the Ld. Representative for the assessee also. Admittedly, the CIT(A) followed the order of this Tribunal in the assessee's own case for the assessment year 2010-11. Rule 6ABA of the Income Tax Rules clearly shows that any advance that has been made and outstanding at the end of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition made U/s.36(1)(vii) of the Act is deleted. 5.4 The next issue arises for consideration is charging of floating provision to tax. According to Shri C. Naresh, the Ld. Representative for the assessee provision for bad and doubtful debts is not liable to tax since the provision was already set off against the bad debts written off U/s.36(1)(viia) of the Act. Therefore according to the Ld.AR it amounts to double taxation. The CIT(A) directed the Assessing Officer to decide the issue instead of deciding himself. 5.4.1 On the contrary, Shri Clement Ramesh Kumar, Ld. Departmental Representative submitted that deduction U/s.36(1)(viia) of the Act shall alone be treated as income when floating provision was reversed. This provision was not allowed as deduction. Therefore it cannot be taken as income when the reversal is made. Since the required particulars are not available, the CIT(A) directed the Assessing Officer to verify whether floating provision was made exclusively U/s.36(1)(viia) of the Act and whether income by way of interest repayment received from Government as agricultural waiver was offered for taxation and thereafter decide the issue. 5.4.2 We have considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount which was already allowed U/s.36(1)(viia) of the Act was required to be brought for taxation. The CIT(A) directed the Assessing Officer to examine the details that may be furnished by the assessee and pass a speaking order either allowing or disallowing the claim of the assessee. Therefore the assessee may not have any grievance. 5.5.3 We have considered the rival submissions on either side and perused the material available on record. The assessee admittedly received Rs. 234.53 crores towards first installment on account of Agricultural Debt Waiver and Debt Relief Scheme 2008. The CIT(A) found that it is possible that the interest income would not be offered to tax whereas the principal portion would be included in the proviso account. Therefore CIT(A) directed the assessee to furnish the relevant information before the Assessing Officer and directed the Assessing Officer to examine the matter. Under the scheme of Income-Tax Act, the CIT(A) has no power to set aside the assessment for reconsideration. However this Tribunal is of the considered opinion, it has to be verified whether the interest income was offered for taxation earlier. Accordingly in exercise of jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Shri C. Naresh, the Ld. Representative for the assessee submitted that the Apex Court in the case of Vijaya Bank 323 ITR 166 and Catholic Syrian Bank Ltd., 343 ITR 270 examined this issue elaborately and allowed the claim of the assessee. This statement of facts was not disputed by the Ld.DR. Therefore respectfully following the Judgment of the Apex Court in the case of Vijaya Bank and Catholic Syrian Bank Ltd., supra the orders of both the authorities below are set aside and the appeal of the assessee is allowed. 7.5 The next issue arises for consideration is restriction of relief U/s.90 of the Act to the extent of tax paid in foreign country instead of tax charged on the foreign income which is included in total income. We heard Shri C. Naresh, the Ld. Representative for the assessee and Shri Clement Ramesh Kumar, the Ld. Departmental Representative. Admittedly this issue was decided against the assessee by this Tribunal for the assessment year 2011-12 in ITA No.77/Mds/2014 by order dated 03.04.2017. Moreover U/s.90 of the Act, only to the extent of tax paid in foreign country, the relief has to be granted. In this case, the Assessing Officer already granted relief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 95 of 2017. 9.1 The first issue arises for consideration is deduction U/s.36(1)(viia) of the Act based on advances outstanding and not on incremental advances. This issue was considered by this Tribunal elaborately for the assessment year 2013-14 and decided in favour of the assessee. In view of the above, this Tribunal do not find any reason to interfere with the order of the lower authority and the same is confirmed. 9.2 The next issue arises for consideration is loss on revaluation of trade derivatives. Accordingly to the Ld. Representative for the assessee on account of revaluation of trade derivatives the assessee estimated loss for the assessment year 2011-12, this Tribunal examined this issue elaborately and found that the loss on account of revaluation has to be allowed. We heard Shri Clement Ramesh Kumar, the Ld. Departmental Representative also. According to the Ld.DR this issue was decided in favour of the assessee for the assessment year 2011-12 by this Tribunal in ITA No.77/Mds/2014 by order dated 03.04.2017. In view of the above this Tribunal did not find any reason to interfere with the order of the lower authority and the same is confirmed. 9.3 Now coming to disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter may be remitted back to the file of the Assessing Officer. 9.5.3 We have considered the rival submissions on either side and perused the material available on record. No doubt, the Kolkata High Court in the case of S.K. Tekriwal supra found that in case of short deduction there cannot be any disallowance U/s.40(a)(ia) of the Act. However as rightly submitted by the Ld.DR, there are other High Court Judgments which is in favour of the Revenue also. In case of any Judgment by Madras High Court that is binding on the Assessing Officer. Since the Ld.DR could not produce the details immediately, the issue is remitted back to the file of the Assessing Officer. Accordingly the orders of both the authorities below are set aside and the issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the issue and bring on record all the available Judgments on the issue. If there is a Judgment by Madras High Court, the same has to be followed in preference to the other High Court Judgments. 9.6 The next issue arises for consideration is depreciation claimed by the assessee on the asset taken over from Bank of Tamilnadu. This issue was admittedly e ..... 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