SIKAR KENDRIYA SAHKARI BANK LTD., Sikar V. DCIT, Sikar

ITA 116/JPR/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7207 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 21-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 11-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VINOD JOHARI
• Assessee Lawyers: ANIL KAUSHIK
• Keywords: Principle of natural justice; Bad and doubtful debts

Judgement Text

1 ITA 116-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 116/JP/2011 ASSTT. YEAR : 2007-08. SIKAR KENDRIYA SAHKARI BANK LTD., VS. THE DCIT, CI RCLE SIKAR, H.O. BASANT VIHAR, SIKAR. SIKAR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIL KAUSHIK RESPONDENT BY : SHRI VINOD JOHARI DATE OF HEARING : 21.10.2011. DATE OF PRONOUNCEMENT : 04.11.2011 ORDER DATE OF ORDER : 04/11/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS FILED AN APPLICATION FOR ADMITT ING THE FOLLOWING ADDITIONAL GROUND UNDER :- THE BENEFITS OF DEDUCTION U/S 80P WERE WITHDRAWN FROM CERTAIN CO-OPERATIVE BANKS VIDE FINANCE ACT, 2006 W.E.F. 1. 04.2007 WHILE THE BENEFIT OF DEDUCTION U/S 36(1)(VIIIA) OF THE IT ACT, 1961 WERE EXTENDED TO SUCH CO-OPERATIVE BANKS BY THE AMENDMEN TS BROUGHT IN BY FINANCE ACT, 2007W.E.F. 1.4.2007, HOWEVER THE AP PELLANT GOT DEPRIVED OF BOTH THE BENEFITS I.E. BOTH U/S 80P AND U/S 36(1)(VIIIA) DURING THE ASSESSMENT YEAR 2007-08, WHICH IS AGAINS T THE PRINCIPLE OF EQUITY AND NATURAL JUSTICE AND ALSO IS AGAINST T HE INTENTION, SPIRIT AND WILL OF THE LEGISLATURE BEHIND THESE AMENDMENTS , AND IS HIGHLY UNJUSTIFIED, AND BIASED ACT. 2 3. THE ADDITIONAL GROUND FILED BY ASSESSEE IS LEGAL GROUND, THEREFORE, THE SAME IS ADMITTED AFTER TAKING OBJECTIONS FROM THE LD. D/R. 4. ON MERIT, GROUND NO. 1 IS AGAINST CONFIRMING THE ACTION OF THE AO REGARDING DISALLOWANCE FOR CONTRIBUTION TO BAD AND DOUBTFUL D EBT OF RS. 60,08,932/-. 5. IN THIS RESPECT THE LD. COUNSEL OF THE ASSESSEE HAS STATED THAT THE DISALLOWANCE CONFIRMED BY LD. CIT (A) MAY BE CONFIRMED AS, AS PE R PROVISIONS OF LAW PROVISION FOR DOUBTFUL DEBT CANNOT BE ALLOWED. ACCORDINGLY, WE C ONFIRM THE FINDING OF LD. CIT (A) WHICH ARE RECORDED IN PARA 3.3 AS UNDER :- 3.3. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS OF LD. AR. ON PERUSAL OF THE RELEVANT RECORDS, I FIND THAT THE MAIN ISSUE INVOLVED IN THIS GROUND OF APPEAL IS AS TO WHETHER THE APPELLANT BANK WAS ELIGIBLE FOR DEDUCTION, ON ACCOUNT OF THE PROVISION MADE FOR BAD AND DOUBTFUL DEBTS, U/S 36(1)(VIIA) OF THE I.T. ACT IN THIS YEAR I.E. A.Y. 2007- 708. IN THIS REGARD, IT IS OBSERVED THAT AS PER THE AMENDED PROVISIONS OF CLAUSE (VIIA) OF SUB SECTION 1 OF SECTION 36 OF THE I.T. ACT, THE COOPERATIVE BANKS HAVE BEEN EXTENDED THE BENEFIT OF DEDUCTION, IN RESPECT OF THE PROVISION FOR THE BAD AND DOUBTFUL DEBTS, W.E.F. 1. 4.2007 (AS AMENDED BY FINANCE ACT, 2007). THEREFORE, AS THE SAID AMENDMEN T HAS BEEN MADE BY THE FINANCE ACT, 2007 AND IS EFFECT FROM 1.4.2007, IT IS EVIDENT THAT THE APPELLANT COOPERATIVE BANK WOULD BE ELIGIBLE FOR DE DUCTION U/S 36(1)(VIIA) OF THE I.T. ACT, IN THE A.Y. 2008-09, FOR THE PROVI SION MADE FOR THE BAD AND DOUBTFUL DEBTS DURING THE ACCOUNTING YEAR 2007- 08 (STARTING FROM 1.4.2007). HENCE, I FIND THAT THE LD. AO WAS CORRE CT IN HOLDING THAT THE APPELLANT BANK WAS NOT ELIGIBLE FOR THE DEDUCTION U /S 36(1)(VIIA) OF THE I.T. ACT IN THE A.Y. 2007-08, UNDER CONSIDERATION OF THI S APPEAL. FURTHER, AS THE APPELLANT HAS, UNDISPUTEDLY, NOT WRITTEN OFF AN Y BAD DEBTS DURING THE F.Y. 2006-07, NO DEDUCTION FOR BAD AND DOUBTFUL DEB TS IS AVAILABLE TO THE APPELLANT U/S 36(1)(VII) OF THE I.T. ACT ALSO. THE REFORE, IN ACCORDANCE WITH 3 THE ABOVE DISCUSSION, IT IS HELD THAT THE APPELLANT WAS NOT ENTITLED TO THE DEDUCTION CLAIMED IN RESPECT OF THE PROVISION FOR B AD AND DOUBTFUL DEBTS, AMOUNTING TO RS. 60,08,932/-. CONSEQUENTLY, THIS GR OUND OF APPEAL IS REJECTED. 6. REGARDING DEDUCTION UNDER SECTION 80P, IN VIEW O F AMENDED PROVISIONS OF SECTION 36(1)(VIIA) SINCE AMENDMENT HAS TOOK PLACE FROM THE YEAR UNDER CONSIDERATION AND THIS AMENDED PROVISION COULD NOT BE CONSIDERED WHILE COM PLETING ASSESSMENT OR DECIDING THE ISSUE BY LD. CIT (A), THEREFORE, THIS ISSUE IS REST ORED BACK TO THE FILE OF AO TO CONSIDER THE SAME IN THE LIGHT OF AMENDED PROVISIONS OF SECTION 36(1)(VIIA). 7. ADDITIONAL GROUND OF THE ASSESSEE AND THE REMAIN ING GROUND RAISED IN THE GROUND OF APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES. 9. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 04. 11.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- SIKAR KENDRIYA SAHKARI BANK LTD., SIKAR. THE DCIT, CIRCLE SIKAR, SIKAR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 116/JP/2011) BY ORDER, AR ITAT JAIPUR. 4