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TMI Blog2021 (8) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal raised by the Revenue is dismissed. - ITA No.1811/DEL/2018 - - - Dated:- 27-8-2021 - Shri O. P. Kant, Accountant Member And Shri K. N. Chary, Judicial Member For the Appellant : Ms. Pramita M. Biswas, CIT DR For the Respondent : Sh. K. S. V. R. Krishna, CA ORDER PER O.P. KANT, AM: This appeal by the Revenue is directed against order dated 29/12/2017 passed by the Learned Commissioner of Income-tax (Appeals)-20, New Delhi [in short the Ld. CIT(A)] for assessment year 2013-14, raising following grounds: 1. On the facts and under the circumstances of the case, the ld. CIT(A) has erred in law and facts in deleting the addition of ₹ 18,00,00,000/- ignoring the facts produced by the Assessing officer that the said liability was not crystallized and was unascertained and assessee had only made a provision for the same whereas the outflow could be more or less. 2. The appellant craves to be allowed to add and alter any fresh ground(s) of appeal and / or delete or amend any of the ground (s) of appeal. 2. Briefly stated facts of the case are that the assessee is a nationalised bank and is engaged in the business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of ₹ 18,00,00,000/- as an allowable deduction which is as per RBI circular. The appellant has also claimed that in the appeal against the order u/s 143(3) of the Assessing Officer, the CIT(A)-36 vide its order dated 31.01.2017 in Appeal no. 238/2016- 17 has deleted the disallowance made by the Assessing Officer and while allowing this relief the CIT(A) has followed the previous order of A.Y. 2009-10 2010-11 and hold that the liability determined in respect of interest on overdue deposits is definite and ascertained liability and the disallowance made by the Assessing Officer on this account was deleted. 4.4.3 The contention of the Assessing Officer and the submission of the appellant has been considered. From the details filed by the appellant, it is apparent that an addition of ₹ 18,00,00,000/- was made as interest on overdue deposits in the A.Y. 2013-14 i.e. the year under consideration u/s 143(3) which was challenged by the appellant before CIT(A) and CIT(A) vide order dated 31.01.2017 in appeal no. 238/2016-17(new appeal) and appeal no. 204/2015- 16(old appeal) vide order dated 31.07.2017 has discussed this issue in para 6.4 and deleted the addition made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he time of renewal. 5.5.5. The assessee is a nationalized bank and governed by Banking Regulations Act, 1974. The assessee is bound to act as per RBI Circular. The RBI Circular No. DBOD No. Leg.BC.34/09.07.005/2008-09 dated 22.08.2008 in para 2 (xi) says:- (xi) Interest on savings bank accounts should be credited on regular basis whether the account is operative or not. If a Fixed Deposit Receipt matures and proceeds are unpaid, the amount left unclaimed with the bank will attract savings bank rate of interest. Further, the above RBI circular is neither inconsistent nor contrary to the provisions of the I.T Act. There is no dispute that the appellant debited the liability on account of overdue deposits at the rate of savings bank deposits as per RBI Circular in a bonafide manner. It is also fact that there is no change in the method of accounting but only change In accounting policy as guided by the RBI. 5.5.6 Hon'ble Supreme Court of India in Bharat Earth Movers Ltd. Vs CIT [245 ITR 428] held that if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credited on regular basis whether the account is operative or not. If a fixed Deposit Receipt matures and proceeds are unpaid, the amount left unclaimed with the bank will attract savings bank rate of interest. This issue has been discussed in detail by the Id. CIT(A) in his order. The assessee Bank is covered by the Banking Regulation Act, 1949 and it has to follow the directions of Reserve Bank of India which regulates all the banks operation in India. The books of accounts are to be maintained as per directions of the Reserve Bank of India and financial results of the banks are il'.o prepared by the banks as per the prescribed norms fixed by RBI. The deserve Bank of India has considered in its circular that interest should be paid at the rate of saving banks interest rate on overdue deposits. Accordingly, the assessee bank has made the provision of ₹ 83.00 crores as on the date of balance sheet, i.e., 31.03.2009. No such provision is proved to have been made * by the assessee bank prior to this circular. However, the AO has observed that. the assessee failed to identify the customers to whom such interest is payable and for which period and that the statutory a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in response to by Hon ble ITAT order dated 27.12.2016 by Assessing Officer's order dated 27.03.2017, subsequently passing the Rectification order u/s 154 dated 26.04.2016 which is a subject matter of appeal. In this light, as on merit, the appellant has already got relief vide the order of CIT(A) dated 31.01.2017, the appellant is entitled to get relief on the MAT provisions also since this has been treated as ascertained liability by the Assessing Officer himself vide order dated 27/12/2016. In this light, the Assessing Officer is directed to recalculate the book profit of the appellant. {5} Ground No. 3, 4, 5 6 are general in nature and do not require any separate adjudication. {6} In the result, the appeal is allowed. 5. We find that in assessment year 2009-10 the matter was restored by the Tribunal to the file of the Assessing Officer. The Assessing Officer in his order dated 27/03/2017 passed in compliance to the order of the Tribunal, has allowed the claim of the assessee of interest on overdue deposits. In the circumstances, when the Assessing Officer himself has accepted the claim of the assessee in assessment year 2009-10, then action ..... X X X X Extracts X X X X X X X X Extracts X X X X
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