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TMI Blog2022 (3) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. involving present A.Y. 2014-15 under consideration does not warrant any addition, meaning no tax on the reversal of BDDR in the subsequent year. A similar issue on same identical facts, the Co-ordinate Bench in assessee‟s own case [ 2020 (10) TMI 658 - ITAT PUNE] whether it is case of the period when the assessee was eligible for deduction u/s.80P or thereafter when the benefit of section 36(1)(viia) came to be conferred, the creation of BDDR and its simultaneous addition in the computation of total income has made it clear that, in fact, no deduction was claimed by the assessee in this regard. Once the assessee did not claim any deduction in respect of BDDR, there can be no question of taxing the reversal of BDDR in a subsequent year, as has been the case under consideration. We, therefore, overturn the impugned order on this score and hold that the ld. CIT(A) was not justified in upholding the addition - Decided in favour of assessee. - ITA No. 54/PUN/2020 - - - Dated:- 3-3-2022 - SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER Assessee by : Smt. Deepa Khare Revenue by : Shri Naveen Gupta ORDER PER S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the paper book, wherein, we note that sum of ₹ 8,54,42,557/- were added and the same amount were reversed, making it clear that the assessee did not claim any deduction on account of provision for bad and doubtful debts made for the year under consideration nor offered any income on account of write back of the provision for bad and doubtful debts for the earlier years in the computation of total income. As can be seen from the assessment order the details of disallowance of reversal provision for bad and doubtful debts reserves from A.Ys. 2004-05 to 2012-13 were reproduced wherein we note that the assessee started making provision for bad and doubtful debts from A.Ys. 2004-05 to 2014-15 to an extent of ₹ 71,88,98,173/-. It is also noted that the assessee made net of reversal for A.Y. 2013-14 to an extent of ₹ 2,10,39,033/- and ₹ 8,54,42,557/- for the year under consideration making the total reversal for A.Ys. 2013-14 and 2014-15 to an extent of ₹ 10,64,81,590/- (₹ 2,10,39,033/- + ₹ 8,54,42,557/-). It is also seen the total provision available as on 31-03-2014 is ₹ 61,24,16,583/-. 5. Further, as discussed above, the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tead of showing separate credit of ₹ 3.39 crore and a separate debit of ₹ 1.28 crore in its Profit and loss account, simply credited net of the two amounts at ₹ 2.10 crore. Copy of computation of total income has been placed at page 3 of the paper book, from which it can be seen that the starting point of the computation of income under the head `Profits and Gains from Business or Profession is Net Profit as per profit and loss account at ₹ 1,60,02,879/-. This figure matches with the amount of net profit shown in the Profit and loss account, which embraces the effect of net Bad and Doubtful Debts Reserve written back at ₹ 2.10 crore. Thereafter, the assessee, in the computation of total income, reduced a sum of ₹ 2,30,53,804/- with the narration Income considered separately . Break-up of this ₹ 2.30 crore is available at page 4 of the paper book, which includes provision for Bad Debts at ₹ 2,10,39,033/-, being, the net amount of the provision written back. Though the narration has been given as Income considered separately but, in fact, there is no separate declaration of net income in the computation of total income on this score ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quent years, cannot call for any addition. Here, it is relevant to mention that the claim of deduction u/s 36(1)(viia) of the Act is separate and independent of such provision created or reversed in the books of account as per the RBI norms. 6. The authorities below have also taken cognizance of the fact that the assessee claimed deduction u/s.80P for full amount of profit for the A.Y. 2006-07 and earlier years. Here, it is worthwhile to mention that prior to amendment by insertion of sub-section (4) by the Finance Act, 2006 w.e.f. A.Y. 2007-08 to section 80P making the provision u/s.80P as not applicable to any Cooperative Bank other than a Primary Agricultural Credit Society or a Primary Cooperative Agricultural and Rural Development Bank, the category in which the assessee falls, there was eligibility for deduction u/s.80P of the Act from its income. It can be seen from the assessee s return of income for the assessment year 2006-07, being the period, when it was eligible for deduction u/s 80P of the Act, that it added back BDDR and thereafter claimed deduction u/s 80P on the full amount of income. Again the net effect of this exercise is that the creation of BDDR in the b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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