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TMI Blog2023 (9) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... t corporation, the income by way of interest in relation to such categories of bad and doubtful debts as may be prescribed by the Reserve Bank of India in relation to such debts, may be taxed in the previous year in which it is credited to profit and loss account or in which it is actually received, whichever is earlier. The said provision is also in accord with the Accounting Standard-9 (Revenue Recognition) issued by the Institute of Chartered Accountants of India. The banks and FIs account for interest on standard assets on accrual basis, while interest on non- performing assets is recorded on realisation. Thus, they follow hybrid system of accounting as per RBI's prudential norms, which is definitely contrary to the provision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) has erred in deleting the addition made by the AO at Rs. 1,65,72,820/ - for making fresh provision of NPA out of the current year's income; without appreciating the fact that the assessee has declared loss and that none of the branches of the assessee are 'rural branches' within the meaning of Explanation (l)(ia) to Section 36 of the Act being population of none of the stations where such branches of the assessee-bank are situated is below 10,000 as per the census published before the 1st day of the previous year. ii) On the facts and in the circumstances of the case; the Ld.CIT (Appeals) has erred in deleting the addition made by the AO at Rs. 57,13,820/- without appreciating the fact that the assessee has regularly bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the same and also was also asked the section under which the assessee can be allowed to make provision of NPA. On receiving no plausible reply the AO made the addition of Rs. 1,65,72,820/-. 7. Proceeding further the AO noticed that the assessee had made provision on account of suspense interest at Rs. 5,91,95,669/-. Assessee was asked to explain this provision to explain as to why the same should not be disallowed. 8. Assessee filed a detailed reply which is extracted in the body of the assessment order but was not found tenable and the AO concluded the assessment proceedings by making the impugned disallowance of Rs. 1,65,72,820/-and Rs. 5713820/-. 9. Assessee challenged the assessment before the CIT(A) and filed a detailed sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is as follows Particulars Amount (In Rs.) Opening Balance of NPA Provision(l) 10,97,67,934.00 Add: Provision made during the year (2) 1,65,72,820.00 Less: Provision reversed during the year (3) 2,21,15,886.00 Net amount credited to P/L A/c (4)=(3)-(2) 55,43,066.00 Closing balance as on 31.03.2013. (5)=(1)-(4) 10,42,24,868.00 The AO only considered the credited amount of the ledger and ignored the debited amount, despite the fact that the debit amount was more than the cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court in the case of State Bank of Travancore Vs. CIT (1986) 158 ITR 102 (Supreme Court) is applicable to the case of the assessee and facts of the case of Keshav Ji Ravji Co. Vs. CIT (1990) 183 ITR 1 (Supreme Court) relied upon by the learned CIT(A) are distinguishable. 3. The appellant craves leave to add, or amend the grounds before the appeal is heard and disposed off. 13. And the Coordinate Bench inter alia, held as under :- 6.2 The Id. DR appearing before us did not even whisper as to whether or not the said circular dated 9.10.1984 issued by the CBDT has been withdrawn nor stated as to why decision in UCO Bank(supra) is not applicable in this case. In view of the aforesaid decision in the case of UCO Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X
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