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TMI Blog2020 (11) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... ban Co-operative Bank Ltd [ 2014 (10) TMI 740 - KARNATAKA HIGH COURT ] and Special Leave Petition against the aforesaid order has been dismissed by Supreme Court keeping the question of law open. The aforesaid aspect of the matter could not be disputed by the learned counsel for the revenue. For the reasons assigned above the first substantial question of law is answered against the revenue and in favour of the assessee. Deduction for provision for bad and doubtful debt - Benefit under Section 36(1)(viia) - assessee has to first set off the bad debt written off against the provision made under Section 36(1)(viia) of the Act - HELD THAT:- This court in Canfin Homes Ltd. [ 2011 (8) TMI 178 - KARNATAKA HIGH COURT] after taking note of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under consideration despite the assessee maintaining mercantile system of accounting. (ii) Whether on the facts and circumstances of the case, the Tribunal is right in law in holding that the provision for non performing assets made by assessee is proper as it is done as per RBI guidelines without appreciating that RBI guidelines cannot override the mandatory provision of Section 145 of the I.T. Act which is a specific provision dealing with the method of accounting for determining income of particular year and the decision in the case of UCO Bank Vs. CIT (reported in 237 ITR page 889), the Supreme Court has not given findings regarding this issue and as such the Tribunal is not right in relying on this ruling of Apex Court. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de the issue in the light of the decision of the Supreme Court in the case of UCO Bank Vs. CIT, 237 ITR 889 . The Commissioner of Income Tax (Appeals) allowed the provision made for non performing assets to the extent of ₹ 1,50,00,000/- by following the decision of the Supreme Court in UCO Bank supra and with regard to addition made under Section 40(a)(ia) of the Act of ₹ 17,38,222/-, the Commissioner of Income Tax (Appeals) has given direction to the Assessing Officer to call details of previous payment and to check the return. Accordingly, the appeal was partly allowed the appeal preferred by the assessee. The revenue thereupon approached the Income Tax Appellate Tribunal (hereinafter referred to as 'the tribunal' f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(vii). It is also argued that allowing the provision under Section 36(1)(viia) of the Act and on actual write off under Section 36(1)(vii) of the Act would amount to double deduction and the same is in contravention of the law laid down by the Supreme Court in CATHOLIC SYRIAN BANK LTD. VS. CIT (SC) 343 ITR 270. It is further submitted that the principle laid down in the aforesaid decision has not been taken note of by the tribunal and therefore, the matter requires re consideration. It is also urged that reliance placed on decision of this court in COMMISSIONER OF INCOME-TAX VS. CANFIN HOMES LTD., 347 ITR 382 is of no assistance to the assessee as in the aforesaid decision, the effect of Section 36(1)(viia) of the Act has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he details of non performing assets as well as provisions made were provided. The Commissioner of Income Tax (Appeals) held that deduction for provision for bad and doubtful debt is allowed under Section 36(1)(viia) of the Act in the light of the decision of the Supreme Court in UCO Bank Ltd. supra. The tribunal in its order dated 10.10.2014 inter alia has held that though the assessee has used the nomenclature as provision for non performing assets but in pith and substance, the provision has been created for bad and doubtful debts and in doing so the assessee has followed the guidelines framed by Reserve Bank of India. The tribunal has therefore, affirmed the finding recorded by the Commissioner of Income Tax (Appeals). 8. This court i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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