ITAT grants partial relief to ICICI Bank
Mumbai bench of Income Tax Appellate Tribunal has allowed ICICI Bank Ltd to avail ₹1,855 crore bad debt write-off as deduction, but dismissed the private bank's appeal seeking ₹502-crore worth long-term capital loss allowance. The appellate tribunal was hearing ICICI Bank's appeal against an order of principal commissioner of Income tax (PCIT) for 2015-16. The PCIT had ruled that an allowance of long-term capital loss of ₹996 crore was irregular and that the bank had claimed an excess capital loss of ₹502 crore.
The bank had calculated capital gain and capital loss while acquiring and selling shares, applying the cost of inflation index on foreign currency rather than Indian currency, it said.
The ITAT bench of Sandeep Singh Karhail and Prashant Maharishi upheld the order of PCIT and observed that ICICI Bank transacted in Indian currency and, therefore, it could not have indexed the cost of inflation on foreign currency.
«By computing long-term capital gain by incorrect method, the assessee has got the benefit of foreign exchange fluctuation as well as cost inflation index both, which is not in accordance with Income-Tax Act,» the tribunal said in its recent order. On written off bad debt, PCIT had concluded that ICICI Bank had not written off any bad debt during the year as the amount provided for non-performing assets (NPAs) differed in the books of accounts.
But the appellate tribunal held that the assistant commissioner had verified the bank's claims and the bad debt was written off during the year in its
