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TMI Blog2022 (6) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... year wise, respectively. The CIT(A)'s identical detailed discussion to this effect reads as under: 10.4 Grounds 4 & 5: These two grounds relate to the restriction of deduction u/s. 36(1)(viia) and are therefore clubbed together for sake of convenience. I have already discussed the matter earlier in the order. The AO basically restricted the deduction u/s. 36(1)(viia) to 7.5% of the total income before set off of losses after comparing the same to the NPA provision. The AO also disallowed a sum of Rs. 45,70,370 holding that no such provision has been made by the appellant. On the other hand, the case of the appellant is that he has made the proper provisions to two accounts viz. NPA & BDDR in the P&L A/c totalling to Rs. 712.67 lakhs and therefore is eligible to claim the same as a deduction u/s. 36(1)(viaa) to the extent of provisions made as the ceiling imposed by the section, which according to the appellant is Rs. 2,985.88 lakhs, is far in excess of the provision. I have careful considered the submission of the appellant and the circumstances and reasons for which the impugned additions were made. In this case, one only has to find out the total sum of qualifying amount un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made to the extent of Rs. 712.67 lakhs and claimed this amount as a deduction u/s. 36(1)(viia)(a). The qualifying amount for the deduction is actually Rs. 2985.88 lakhs which is evident from the accounts of the appellant. The AO claims that the I" proviso to sec 36(1)(viia) bars the appellant from claiming the deduction towards NPA provision as the appellant has claimed a deduction u/s. 36(1)(viia). The AO has again confused himself and lost sight of the basic fact that the option is with the appellant whether to claim a deduction under the 1st proviso or under the main sub-section. Once again, the figures are in favour of the appellant. It has been discussed above that the limit set by sec 36(1)(viia)(a) in the case of the appellant is bare minimum Rs. 2985.88 lakhs (10% of the rural advances). Therefore the limit of 5% imposed by the 1st proviso would be at least 1492.94 lakhs which once again is far in excess of the provisions made and deductions claimed. I am therefore of the opinion that the AO has proceeded on misconceived facts as well as a misunderstanding of the legal provisions. At this stage I find that the matter is squarely covered in favour of the appellant by the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed is therefore deleted and grounds 4 & 5 allowed to the appellant. 10.5 Ground 6: This is against the denial of deduction of Rs. 1,37,24,484 being bonus. The facts are already discussed by me earlier in the order. I have carefully considered this ground and find that the matter is squarely covered in favour of the appellant in the decision of the Hon'ble ITAT Pune Bench in the appellants own case for the A Y 2007-08. The Hon'ble ITAT has discussed the matter from paras 11 to 16 in ITA No. 617/PN/2011 dated 02/03/2012. From a reading of this decision, it is seen that the ITAT has deleted a similar addition made in A Y 2007-08. As the issue is identical on facts in the present year also, the addition is to be deleted. Therefore respectfully following the decision of the Hon'ble ITAT, the addition of Rs. 1,37,24,484 is deleted and ground 6 allowed." 3. We have given our thoughtful consideration to Revenue's pleadings and find no merit in its stand. There would be hardly in dispute that a cooperative bank is very much entitled to write off its non performing advances in light of the foregoing statutory provision. The core question herein is indeed that of quan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acto lead to the disregarding of the same. No doubt, in the Resolution passed on 17.7.2006 pertaining to the liability for the preceding financial year there is a detailed narration with regard to the discussion/correspondence with the Employees' union, etc. However, it is also to be kept in mind that in the instant year the Resolution dated 13.3.2007 adopts the liability to pay ex-gratia on similar rates as paid by the assessee for the preceding financial year. In-fact, the reference to the bonus/ex-gratia paid in the preceding financial year of 2005-06 is clearly noted in the Resolution dated 13.3.2007 and thereafter, it has been resolved that the bonus/ex-gratia be paid at the same rates in the instant year also. Under these circumstances, in the absence of any other corroborative evidence led by the Revenue, we find that the Board Resolution No. 55 dated 13.3.2007 has been merely disbelieved by the Revenue authorities without demonstrating any falsity in the same. Therefore, in so far as the briefness of the Board Resolution No. 55 dated 13.3.2007 is concerned, we do not find any merit in the objections raised by the Revenue. 15. The only other aspect to be seen as to whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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