| आयकर अपीलीय अिधकरण (cid:12)ायपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT &

SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 424/Mum/2020 Assessment Year: 2015-16 Union Bank of India DCIT, LTU(2), Mumbai Union Bank of India Bhavan Vs

6th Floor, 239, Vidhan Bhavan Marg Nariman Point Mumbai - 400021 [PAN: AAACU0564G]

अपीलाथ(cid:22)/ (Appellant) (cid:23)(cid:24) यथ(cid:22)/ (Respondent)

I.T.A. No. 882/Mum/2020 Assessment Year: 2015-16 ACIT, LTU(2), Mumbai Union Bank of India Vs Union Bank of India Bhavan

6th Floor, 239, Vidhan Bhavan Marg Nariman Point Mumbai - 400021 [PAN: AAACU0564G]

अपीलाथ(cid:22)/ (Appellant) (cid:23)(cid:24) यथ(cid:22)/ (Respondent)

Assessee by : Shri C Naresh, A/R Revenue by : Shri Vivek Perampurna, CIT D/R सुनवाई की तारीख/Date of Hearing : 05/08/2025 घोषणा की तारीख /Date of Pronouncement: 11/08/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM:

I.T.A. No. 424/Mum/2020 & I.T.A. No. 882/Mum/2020 are cross-

appeals by the assessee and the revenue preferred against very same order of the ld. CIT(A) – 2, Mumbai [hereinafter ‘the ld. CIT(A)’] dated

05/11/2019 pertaining to AY 2015-16.

2. The cross-appeals were heard together and are disposed of by this common order for the sake of convenience and brevity.

3. We first take up the assessee’s appeal in ITA No. 424/Mum/2020.

The grounds of the appeal raised by the assessee read as under:-

“Disallowance of bad debts written off

1.1 The CIT(A) erred in directing the AO to recompute deduction for bad debt written off by reconstructing provision for bad and doubtful account in a manner different from what was already decided by Id. CIT(A) for Asst year 2014-15.

1.2 Without prejudice to the above even as per CIT(A)'s own method of arriving balance in the provision account a credit entry of Rs 1362.02 crores against a debit entry of Rs 909.41 crores would result in a credit balance of Rs 452.61 crore and not a credit balance of 1362.0 crore as erroneously arrived by him.

Taxability of recovery in respect of bad debts written off which was not allowed as deduction.

2.1 The CIT(A) failed to note that when bad debts written off were not allowed, the question of charging to tax the amount recovered therefrom does not arise. Reliance is also placed on the decision of Hon'ble ITAT Bangalore in case of State Bank of Mysore (33 SOT 7) in this regard.

2.2 Without prejudice to the above the contention of Ld CIT(A) that any recovery towards bad debt written off shall be charged to tax merely because a deduction against provision made for bad and doubtful debts is allowed u/s 36(1)(viia), is contrary to the provisions of the Act since the two terms are not interchangeable. Further charging to tax such sum amounts to disallowing same amount twice once by charging the recovery and the other by reducing allowable bad debt by such recovery.

Deduction u/s 36(1) (viia)

3.1The Ld CIT(A) ought to have noted that provision made in books of accounts in line with RBI direction towards loans having arrears up to 90 days (though classified as standard assets) is eligible for deduction u/s 36(1)(viia) which is made by all banks in the matter of provisioning as per prudential norms prescribed by RBI.

Applicability of provisions of section 115JB

4.1 The CIT(A) erred in holding that the provisions of section 115JB are applicable to appellant relying on Explanation 3 without appreciating that the said Explanation will apply only to those entities established under Companies Act and will not apply to appellant which is established under Banking (Companies Transfer Of Undertakings) Act, 1970 as held by Hon'ble ITAT Kolkata in the case of UCO Bank.”

4. Briefly stated the facts of the case are that the assessee filed its return of income on 27/11/2015 declaring total income of Rs. 33,49,62,49,038/- and book profits of Rs. 28,85,73,24,680/-. The return was selected for scrutiny assessment and accordingly statutory notices were issued and