Assistant Commissioner of Income Tax, Circle-2(1)(1), Vadodara Vs. The Bharuch Dist. Central Co-op. Bank Ltd.

Parties Involved

Facts Summary

The assessee filed its income tax return on September 23, 2015, declaring a total income of Rs. 16,56,42,050/-. The assessee, a co-operative bank, claimed a deduction of Rs. 2,88,40,841/- under section 36(1)(viia) of the Income Tax Act for bad and doubtful debts. The assessing officer disallowed the excess deduction, leading to a reassessment of the total income at Rs. 18,44,82,886/-. The assessee appealed against this decision, and the Commissioner of Income Tax (Appeals) allowed the appeal, directing the assessing officer to delete the disallowance. The Department further appealed to the Income Tax Appellate Tribunal, which dismissed the appeal.…

Legal Issues

• 1. Whether the Ld. CIT(Appeals) is justified in deleting the addition of Rs. 1,88,40,841/- made on account of disallowance of deduction u/s 36(1)(viia) of the Act?
• 2. Whether the Ld. CIT(Appeals) is justified in holding that the assessee co-operative bank falls under the category of non-scheduled bank and thus eligible for deduction of 10% of aggregate advances made by rural branches?
• 3. Whether the Ld. CIT(Appeals) is justified in directing the assessing officer to allow deduction of Rs.45,00,000/- u/s 36(1)(viia) of the Act claimed by the assessee during the assessment proceedings?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

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