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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 ..... ding financial year(s) - HELD THAT:- We note that this particular issue had arisen between the parties in earlier assessment year as well. [ 2012 (3) TMI 492 - ITAT PUNE] - We thus adopt judicial consistency qua this second issue as well as to reject the Revenue's corresponding substantive grounds in both these appeals. Set off of brought forward losses/unabsorbed depreciation in A.Y. 2007-08 wherein no such losses remain to be carried forward - HELD THAT:- The same admitting involves more a reconciliation than any substantive adjudication on our part. We thus restore the Revenue's instant third substantive ground back to the file of Assessing Officer his afresh computation as per law. Ordered accordingly. - ITA Nos. 2869 & 2871/PUN/2016 - - - Dated:- 12-5-2022 - SHRI S. S. GODARA , JUDICIAL MEMBER And DR. DIPAK P. RIPOTE , ACCOUNTANT MEMBER Appellant by : Shri S. P. Walimbe Respondent by : None ORDER Per S. S. Godara , JM These Revenue's twin appeals for AYs 2008-09 2012-13 arise against the CIT(A)-2, Kolhapur's separate orders both dated 06.10.2016 passed in case No. Kop/415/12-13 and Kul/39/15-16 involving proceedings under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces Rs. 75,82,752, from Appropriation Account Rs. 45,70,370. Prima facie it therefore appears that the appellant has made provisions in his P L A/c balance sheet and claimed a deduction u/s. 36(1)(viia) to the extent of the provision. I find that the appellant has debited the provisions for NPA Rs. 591.14 lakhs and for BDDR Rural Advances Rs. 75.82 lakhs in his P L A/c. Similarly the appellant has debited Rs. 45.70 lakhs towards BDDR in the P L Appropriation account. He has added back the sum of Rs. 75.82 lakhs in the total income computation, but not added back the provision of Rs. 591.14 lakhs. He has then reduced a figure of Rs. 121.53 lakhs from the computation of total income. This is the sum of Rs. 45.70 lakhs and Rs. 75.82 lakhs. This amount has been claimed as a deduction u/s. 36(1)(viia). The appellant has not added back nor reduced the figure of Rs. 591.14 lakhs in his computation of total income. In effect, the appellant is claiming these three provisions as deductions u/s. 36(1)(viia). The issue at hand is therefore whether these provisions so made qualify for a deduction or not. 10.4.1 To my mind, the AO has confused himself. The provisions of sec 36(1)(viia)(a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r bad and doubtful debts made in books of account and disallowed balance amount - Whether in terms of section 36(1)(viia), deduction was liable to be restricted to actual amount of provision for bad and doubtful debts in books of account and, therefore, claim of assessee was rightly restricted by Assessing Officer - Held, yes [Para 25] 25. Following the aforesaid reasoning in the case of Shri Mahalaxtni Coop. Bank Ltd. (supra) the claim of the assessee for deduction under section 36(1)(viia) of the Act is liable to be restricted to the actual amount of provision for bad and doubtful debts made in the books of account. As a result, the income-tax authorities have rightly allowed the deduction under section 36(1)(viia) of the Act to the extent of Rs. 5,15,50,000 and not Rs. 15,47,62,700, as contended by the assessee. Thus, on this ground the assessee fails. It is evident from the above that the deduction u/s. 36(1)(viia) is to be restricted to the amount of provision made in the books of the appellant. This read along with the section itself means that the deduction is to be allowed only if a provision is made by the appellant in his books and the same is to be restricted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y terms. This first and foremost substantive grievance is decided in assessee's favour. 4. Next comes the second common issue of bonus disallowance(s) of Rs. 1,37,24,484/- with ex-gratia bonus of Rs. 36,34,923/- and Rs. 2,76,876/- i.e. assessment year wise, respectively. The Revenue's case before us is that once the assessee follows mercantile system of accounting it was very much incumbent on its part to the claim the impugned relief on the very basis than merely making provision followed by its board's resolution passed in the succeeding financial year(s). We note that this particular issue had arisen between the parties in earlier assessment year as well. Learned co-ordinate bench order in ITA No. 617/PN/11 dated 02.03.2012 for AY 2007-08 has rejected the Revenue's identical contentions as follows. 14. In this background, we have carefully considered the rival stands. Firstly, the plea of the Revenue articulated before us that the assessee did not act in pursuance to such Resolution, in our view, is clearly unfounded. In fact, it is nobody's case that the assessee has not paid the amount in question. The material on record clearly shows the fact-situa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year under consideration itself. 16. For the aforesaid reasons, we therefore, deem it fit and proper to set aside the order of the Commissioner of Income-tax (Appeals) and direct the Assessing Officer to delete the impugned addition. Thus, on this aspect, assessee succeeds, as above. 5. The Revenue is very much fair in not bounding in distinction on fact of law in all these assessment years. We thus adopt judicial consistency qua this second issue as well as to reject the Revenue's corresponding substantive grounds in both these appeals. Its latter appeal ITA No. 2871/PUN/2016 in raising these two issues is rejected therefore. 6. The next comes the Revenue's third substantive ground in AY 2008-09 that the CIT(A) has erred in directing the Assessing Officer to allow set off of brought forward losses/unabsorbed depreciation in A.Y. 2007-08 wherein no such losses remain to be carried forward. The same admitting involves more a reconciliation than any substantive adjudication on our part. We thus restore the Revenue's instant third substantive ground back to the file of Assessing Officer his afresh computation as per law. Ordered accordingly. The Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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