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TMI Blog2017 (3) TMI 1781X X X X Extracts X X X X X X X X Extracts X X X X ..... a new case and had confirmed the addition u/s 43B(f) of the Income-tax Act without affording an opportunity to the assessee, whereas the Assessing Officer had made addition u/s 37 of the Act. 4. The grounds of appeal raised by assessee as well as by Revenue are reproduced below. Appeals by Revenue (i) In ITA No. 580 (Asr)/ 2015. "1. That on the facts and in the circumstances of the case Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 48,26,000/- Made by the Assessing Officer by disallowing the provision for standard assets. 1(a). While allowing the relief of Rs. 48,26,000/- Ld. CIT(A) has failed to appreciate that the Assessing Officer has clearly held out of provision of Rs. 1,33,55,468/- only Rs. 85,29,468 were on a/c of bad and doubtful debts and the balance amount of Rs. 48,26,000/- were on a/c of standards assets and as peer provision of section 36 (1) (viia) only provision for bad and doubtful debts was allowable as deduction. 1(b). While allowing the relief of Rs. 48,26,000/- Ld. CIT(A) failed to appreciate that it was contingent liability and was not allowable as business expenditure. 2. It is prayed that the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances of the case. 5. The appellant assessee leave to raise and urge any other ground of appeal as may be deemed proper at the time of hearing." (iii) In ITA No. 597(Asr)/ 2016 "1. The Ld. CIT(A) has erred in not appreciating the facts of the case and provisions of law in its actual spirit. 2. The Ld. CIT(A) has erred in confirming addition of premium paid to LIC under group leave encashment scheme policy under section 43B(f) of Income Tax Act without giving opportunity because addition was made by the Assessing Officer under section 37 of Income Tax Act. 3. The Ld. CIT(A) has erred in note appreciating the fact regarding payment of premium to LIC under group leave encashment scheme policy by the appellant assessee for getting itself insured against liability of leave encashment towards its employees. 4. The Ld. CIT(A) has erred in not appreciating the fact that the appellant assessee has actually paid the amount which will become payable to its employees on account of leave encashment, to LIC under a valid insurance policy and provisions of section 43B(f) of Income Tax Act are not attracted in the facts and circumstances of the case." 6. The brief facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 8. Aggrieved both parties are in appeal before us. 9. At the outset, the Ld. AR submitted that the issue of provision for bad and doubtful debts on standards assets is squarely covered in favour of the assessee by the order of the Tribunal in the case of the assessee itself for Asst. Year: 2008-09 which was decided by Hon'ble Tribunal on dated 20.06.2016 and in this respect invited our attention to the order of the Tribunal placed at (PB 1 to 6). The Ld. AR submitted that the case of the assessee was also covered by the decision of Hon'ble Punjab and Haryana High Court in the case of State Bank of Patiala Vs. CIT reported 272 ITR 54 and in this respect invited our attention to the copy of the order placed at (PB 15 to 16). 10. As regards the issue of disallowance of premium paid to LIC for covering leave encashment of its employees, the Ld. AR submitted that the premium paid by assessee was deductible u/s 37 (1) of the Act as the assessee had paid the premium to insure its liability for payment of leave encashment to its employees at the time of their retirement or death. It was submitted that any liability which will arise in future on account of leave encashment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an amount not exceeding ten percent of the aggregate average advances made by the rural branches of such bank computed in the prescribed manner. Provided that a schedule bank or a non-scheduled bank referred to in this sub-clause shall, at its option, be allowed in any of the relevant assessment years deduction in respect of any provision made by it for any assets classified by the Reserve Bank of India as doubtful assets or loss assets in accordance with the guidelines issued by it in this behalf, for an amount not exceeding five percent of the amount of such assets shown in the books of account of the bank on the last day of the previous year. Provided further that for the relevant assessment years commencing on or after the 1st day of April, 2003 and ending before the 1st day of April, 2005, the provisions of the first proviso shall have effect as if for the words "five percent", the words "ten percent" had been substituted. Provided also that a scheduled bank or a non-scheduled bank referred to in this sub-clause shall, at its option, be allowed a further deduction in excess of the limits specified in the foregoing provisions, for an amount not exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the payment made to LIC and Bajaj Alianze u/s 37(1) of the Act, holding the same to be not expanded 'wholly and exclusively" for the purposes of business. The Ld. CIT(A) while confirming the disallowance has not considered the claim of the assessee u/s 37(1) of the Act and has confirmed the addition by holding that the provisions of section 43B(f) were applicable to the assessee. However, the claim of the assessee in its written submissions is that assessee had not created the provisions and in fact had made the payment and therefore the provisions of section 43B(f) of the Act were not applicable, it was also required that Ld. CIT(A) had confirmed the disallowance u/s 43B (f) without affording opportunity to the Assessee. Therefore, we deem it appropriate to remit this issue to the office of Ld. CIT(A) who should examine the claim of the assessee u/s 37(1) of the Act as the Assessing Officer had made the disallowance u/s 37(1) of the Act. The Ld. CIT(A) should also hear the assessee on the applicability of provisions of section 43B(f) of the Act. In view of the above, the appeals filed by assessee are allowed for statistical purposes. 15. In nutshell, the appeals filed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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