9911796707
TMI Blog2018 (8) TMI 2027X X X X Extracts X X X X X X X X Extracts X X X X ..... ted without affording proper opportunity to the appellant thereby denying natural justice and, as such, the assessment completed is illegal and void ab initio and may please be quashed. G. 4: That the learned Assessing Officer has erred in adopting the Income assessed vide order dated 29-05-2003 at Rs. 176,88,74,677/- as against income returned in response to notice u/s 148 at Rs. 168,76,85,442/-." 3 That the learned Commissioner of Income-tax (Appeals) has erred in upholding the addition of Rs. 6,41,00,600/- on account of disallowance of deduction claimed u/s 36(1)(viia). 4 That the learned Commissioner of Income-tax (Appeals) has erred in dismissing ground No. 6, which reads as under, without assigning any reason: "Gr. 6: That the Assessing Officer has erred in assessing the income at Rs. 182,89,16,277/- as against the returned income of Rs. 168,76,85,442/-" 5 That the learned Commissioner of Income-tax (Appeals) has erred in upholding the charging of interest u/s 234D amounting to Rs. 60,94,221/-. 6 That the whole order is against the provisions of law and facts of the case and right is reserved to assail the same on such other grounds as may be advanced at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee claimed deduction u/s 36(l)(viia) on a/c of bad and doubtful debts and on a/c of aggregate rural advances as under:- (a) Deduction u/s 36(l)(viia) being 5% of total income 11,56,95,424/- (b) Deduction u/s 36(l)(viia) i.e. 10% of aggregate of rural advances 50.74,37.500/- Total 62,31,32,924/- 7. During the course of assessment proceedings for the assessment year 2004-05, it was noticed that the assessee has claimed deduction u/s 36(l)(viia) in respect of some branches treating them situated in the rural area although these branches are declared by the Census department situated in the Urban area or within the municipal limits. The detail is as under:- 8. Before the Assessing Officer the assessee submitted as under : "After reasons recorded details of branches are given which are either within 8 km of the municipal limits or have been shown as urban in the census report, We draw your kind attention to the definition of rural branch in section 36(l)(viia) which reads as under:- "Rural branch means a branch of a scheduled bank (or a non scheduled bank) situated in a place which has a population of not more than ten thousand according to the last preceding cens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Branch means - i) A branch of scheduled bank ii) Situated in a place which has a population of not more than 10,000 iii) As per last preceding census - Published before the first day of previous year 13. In the background of the above conditions stipulated the relevant facts pertaining to the assessee are hereby examined. i) A branch of scheduled bank : Yes - State Bank of Patiala incorporated under the Indian Laws ii) Situated in a place which has a population of not more than 10,000 The population of the places wherein the following branches situated. iii) As per last preceding census -published before the first day of previous year - For the previous year 1998-99 the first day being 1-4-1998, the last preceding census would be the census published in the year 1991. 14. In the contest of "place" what a place in relation to the rural branches has been deliberated upon by the Hon'ble High Court of Kerala in the case of The Lord Krishna Bank Ltd. in the ITA No. 234/2009 vide order dt. 07/10/2010 wherein it has been mentioned as under: 4. Next question raised pertains to assessee's claim for deduction of provision for bad debts in terms of Section 36(1)(viia) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... too, with reference to the last Census Report, we feel the basic unit as available for identification of rural area in the Census Report can be legitimately adopted. So much so, we feel the above meaning of rural area contained in the Census Report wherein revenue village is treated as a unit of rural area, can be rightly adopted. So much so, "place" referred to in the above definition clause for the purpose of identifying the branch of a Bank as a rural Branch with reference to it's location is the revenue village. Therefore, in our view, the finding of the Tribunal that "place" referred to in the definition is the Ward of a local authority like Panchayat or Municipality is incorrect and in our view, a rural Branch has to be always in rural areas and the place referred can easily be taken as a Village. Several Wards may come within a village, whether it be in Corporation, Municipality or Panchayats. There can be no Village in a Municipal or Corporation area where the population is less than 10000. So much so, rural Branches are such of the Branches located in a Village where the population in the Village as a unit is less than 10000. We, therefore, allow the appeal on this iss ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
