The Revdanda Co-op. Urban Bank Ltd, Raigad V. Deputy Commissioner of Income-tax, Panvel Circle, Panvel

ITA 1161/PUN/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6781 (ITAT-PUNE)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 29-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bad and doubtful debts
• Section: 20

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE , BEFORE SHRI VIKAS AWASTHY, JM . / ITA NO . 11 61 /P U N/201 8 / ASSESSMENT YEAR : 20 15 - 16 THE REVDANDA CO - OP. URBAN BANK LTD., AT POST REVDANDA, TALUKA ALIBAUG, DISTT. RAIGAD 402202 PAN : AAAJT0606R ....... / APPELLANT / V/S. THE DY. COMMISSIONER OF INCOME TAX, PANVEL CIRCLE, PANVEL / RESPONDENT ASSESSEE BY : SHRI DEVENDRA JAIN REVENUE BY : SHRI RAJESH GAWALI / DATE OF HEARING : 01 - 02 - 2019 / DATE OF PRONOUNCEMENT : 24 - 0 4 - 2019 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 2, THANE DATED 15 - 05 - 2018 FOR THE ASSESSMENT YEAR 20 15 - 16. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : THE ASSESSEE IS A CO - OPERATIVE SOCIETY ENGAGED IN BANKING BUSINESS. IN SCRUTINY ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER MADE ADDITION OF 2 ITA NO . 11 61/PUN/2018, A.Y. 2015 - 16 RS.4,87,229/ - AFTER DISALLOWING PROVISION FOR BAD AND DOUBTFUL DEBTS U/S. 36(1)(VIIA) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) . AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 23 - 10 - 2017, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THE ASSESSEE HAS DIRECTLY CLAIMED P ROVISION FOR B AD AND D OUBTFUL DEBTS @ 7.5% OF THE TOTAL INCOME IN COMPUTATION OF INCOME, WITHOUT ACTUALLY CREATING THE PROVISION IN THE PROFIT AND LOSS ACCOUNT. THE FIRST APPELLATE AUTHORITY UPHELD THE FINDINGS OF ASSESSING OFFICER AND DISMISSED THE APPEAL OF ASSESSEE. HENCE, THE PRESENT APPEAL. 3. SHRI DEVENDRA JAIN APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS CLAIMED P ROVISION FOR B AD AND D OUBTFUL DEBTS U/S. 36(1)(VIIA) OF THE ACT. THE ASSESSEE BEING A CO - OPERATIVE BANK IS ELIGIBLE TO CLAIM DEDUCTION IN RESPECT OF SUCH PROVISION @ 7.5% O F THE TOTAL INCOME. THE LD. AR IN SUPPORT OF HIS CONTENTIONS PLACED RELIANCE ON THE DECISION OF DELHI BENCH OF TRIBUNAL IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX VS. PRATHMA BANK REPORTED AS 88 TAXMANN.COM 572. 4. ON THE OTHER HAND SHRI RAJESH GAWALI REPRESENTING THE DEPARTMENT PLACED RELIANCE ON THE IMPUGNED ORDER. 5. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERUSED. UNDISPUTEDLY, THE ASSESSEE IS A CO - OPERATIVE SOCIETY ENGAGED IN THE BANKING BUSINESS. THE ASSESSEE IS ELIGIBLE FOR CLAIMING DEDUCTION U/S. 36(1)(VIIA) IN RESPECT OF P ROVISION FOR B AD AND D OUBTFUL DEBTS @ 7.5% OF THE TOTAL INCOME COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE UNDER CHAPTER VIA. HOWEVER, SUCH BENEFIT CAN BE GRANTED TO THE ASSESSEE 3 ITA NO . 11 61/PUN/2018, A.Y. 2015 - 16 ONLY IF ACTUA L PROVISION IS CREATED AND DEBITED TO THE PROFIT AND LOSS ACCOUNT. IN THE INSTANT CASE, BOTH THE LOWER AUTHORITIES HAVE GIVEN CONCURRENT FINDING OF FACT THAT THE ASSESSEE HAS NOT CREATED ANY PROVISION AND NO AMOUNT IS DEBITED TO PROFIT AND LOSS ACCOUNT TO WARDS THE SAID PROVISION. THE LD. AR HAS NOT BEEN ABLE TO CONTROVERT THE FINDING OF FACT RETURNED BY THE AUTHORITIES BELOW. IN THE ABSENCE OF ANY ACTUAL P ROVISION FOR B AD AND D OUBTFUL DEBTS IN THE BOOKS OF ACCOUNT, NO BENEFIT U/S. 36(1)(VIIA) CAN BE GRAN TED TO THE ASSESSEE. I DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDER. ACCORDINGLY, THE SAME IS UPHELD AND THE APPEAL OF ASSESSEE IS DISMISSED BEING DEVOID OF ANY MERIT. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON WE DNESDAY, THE 24 TH DAY OF APRIL, 2019 . SD/ - ( / VIKAS AWASTHY) / JUDICIAL MEMBER / PUNE; / DATED : 24 TH APRIL, 2019 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 2, THANE 4. THE PR. COMMISSIONER OF INCOME TAX - 2, THANE 5. , , - , / DR, ITAT, SMC BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE