DCIT 1(3), MUMBAI V. NATIONAL CO-OPERATIVE BANK LTD, MUMBAI

ITA 1217/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88052 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 07-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 10-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Keywords: Revised return

Judgement Text

G IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JM AND SHRI RAJENDRA, AM ./ I.T.A. NO.1217 /MUM/2011 ( / ASSESSMENT YEAR : 2007-08 DY. COMMISSIONER OF INCOME TAX 1(3), ROOM NO. 540/564, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, NEW MARINE LINES, MUMBAI -400 020. / VS. M/S NATIONAL CO - OPERATIVE BANK LTD., VATSU APARTMENT, 2 ND FLOOR, JANMABHOOMI MARG, FORT, MUMBAI 400 001. ./ PAN : AAAAN1651M ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI VIJAY KUMAR BORA RESPONDENT BY SHRI RAHUL SARDA / DATE OF HEARING : 7-1-2015 / DATE OF PRONOUNCEMENT : 14-01-2015 [ !' / O R D E R PER VIJAY PAL RAO, J.M . : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 24-11-2010 OF LD. CIT(A)- 2, MUMBAI PERTAINING TO A .Y. 2007-08. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN DELETING THE ADDITION OF RS . 26,68,671/- IN RESPECT OF UNCLAIMED DEPOSITS. 2. THE LD. CIT(A) FURTHER ERRED IN DIRECTING TO ALL OW CLAIM OF ITA 1217/M/11 2 GRATUITY PAID AT RS. 77,89,642/- AGAINST ONLY RS. 7 1,89,642/- CLAIMED IN THE RETURN OF INCOME. 3. GROUND NO. 1 IS REGARDING THE ADDITION IN RESPEC T OF UNCLAIMED DEPOSIT. WE HAVE HEARD THE LD. D.R. AS WELL AS THE LD. COUNS EL FOR THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL AVAILABLE ON RECOR D. THE A.O. MADE AN ADDITION OF RS. 26,68,671/- BEING UNCLAIMED DEPOSIT S IN THE BOOKS OF ACCOUNT OF THE ASSESSEE BANK. THE A.O. HELD THAT TH E LIABILITY OF THE BANK IN RELATION TO THESE DEPOSITS HAVE CEASED TO EXIST DUE TO LAPSE OF CONSIDERABLE TIME SINCE THE DEPOSITS WERE MADE. ON APPEAL, THE L D. CIT(A) DELETED THE ADDITION ON THE FOLLOWING GROUNDS GIVEN PARA 4 OF H IS ORDER :- I HAVE PERUSED FACTS OF THE CASE. I FIND THAT THE SURPLUS AND INSTRUCTIONS OF THE RESERVE BANK OF INDIA ARE CATEG ORICAL THAT UNCLAIMED DEPOSITS HAVE TO BE MAINTAINED BY APPELLA NT AS BELONGING TO THE DEPOSIT HOLDERS ONLY. THERE CANNOT HE ANY DOUBT THAT APPELLANT HAS TO ADOPT THE - DIRECTIONS OF THE RESERVE BANK OF INDIA IN EVERY RESPECT INCLUDING THOSE OF MAINTENANCE OF UNCLAIMED DEPOSITS. HOWSOEVER OLD DEPOSITS MAY BE, BANK ON IT S OWN CANNOT CLAIM THESE AMOUNTS TO BE BELONGING TO THEM. IN SUC H A SITUATION TREATING THESE D\POSITS AS INCOME OF APPE LLANT IS NOT JUSTIFIED AT ALL. IN CRUX, THE LIABILITY OF THE BAN K TOWARDS DEPOSIT HOLDERS DOES NOT CEASED AT ALL AND THEREFORE SECTIO N 41(1)CANNOT BE INVOKED IN THE PRESENT FACTS OF THE CASE. THE ADDIT ION MADE BY THE ASSESSING OFFICER IS THEREFORE- NOT JUSTIFIED. THE GROUNDS OF APPEAL OF APPELLANT ARE CONSEQUENTLY ALLOWED. 4. THE LD. CIT(A) HAS DELETED THE ADDITION ON THE GROUND THAT HOWSOEVER OLD DEPOSITS MAY BE, BANK ON ITS OWN CANNOT CLAIM THESE AMOUNTS TO BE BELONGING TO THEM. ACCORDINGLY, THE PROVISIONS OF S ECTION 41(1) OF THE ACT CANNOT BE INVOKED IN THE CASE OF THE ASSESSEE. WE CONCUR THE VIEW OF THE LD. CIT(A) THAT THE DEPOSITS CANNOT BE CHARACTERIZED AS CREDIT AND THEREFORE EVEN IF THE DEPOSITS ARE NOT CLAIMED BY THE ACCOUNT HOLD ER, IT CANNOT PARTAKE THE CHARACTER OF THE INCOME OF THE BANK. THE LD. A.R. H AS INVITED OUR ATTENTION TO THE DEPOSITOR EDUCATION AND AWARENESS FUND SCHEME, 2014 NOTIFIED BY RBI AS PER PARA NO. 3(III), THE AMOUNTS TO BE CREDITED TO THE FUND SHALL BE THE CREDIT BALANCE IN ANY DEPOSIT ACCOUNT MAINTAINED WI TH BANK WHICH HAS NOT BEEN OPERATED UPON FOR TEN YEARS OR MORE. THUS, IT IS CLEAR THAT ANY AMOUNT IN ANY SAVINGS BANK DEPOSIT ACCOUNT, FIXED OR TERM DEPOSIT ACCOUNT ETC. REMAINS UN-OPERATED OR UN-CLAIMED FOR TEN YEARS HAS TO BE DEPOSITED TO THE ITA 1217/M/11 3 DEPOSITOR EDUCATION AND AWARENESS FUND SCHEME, 2014 . HENCE, THE UN- CLAIMED AMOUNT IN THE DEPOSITORS ACCOUNT CANNOT BE TREATED AS INCOME OF THE BANK. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT F IND ANY ERROR IN THE ORDER OF LD. CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE A.O. 5. GROUND NO. 2 IS REGARDING THE DIRECTION GIV EN TO THE A.O. FOR CONSIDERING THE CORRECT AMOUNT OF GRATUITY PAYMENT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION AS WELL AS RELEVANT MATERIAL AVAILABLE ON RECORD. IN THE RETURN OF INCOME, THE A SSESSEE HAS CLAIMED GRATUITY PAYMENT OF RS. 71,89,642/-. DURING THE ASS ESSMENT PROCEEDINGS, THE ASSESSEE REVISED THE CLAIM AND SUBMITTED THAT THE C ORRECT AMOUNT OF THE GRATUITY PAYMENT IS RS.77,89,642/- INSTEAD OF RS. 7 1,89,642/-. THE A.O. DID NOT ACCEPT THE REVISED CLAIM OF THE ASSESSEE. ON A PPEAL, THE LD. CIT(A) HAS NOTED THAT THE A.O. HAS IGNORED THE REVISED CLAIM P UT-FORTH BY THE ASSESSEE WHILE FRAMING THE ASSESSMENT. ACCORDINGLY THE A.O. WAS DIRECTED TO VERIFY THE CONTENTION OF THE ASSESSEE ABOUT THE CORRECTNESS OF THE CLAIM AND GRANT DEDUCTION IN ACCORDANCE WITH LAW. THE GRIEVANCE OF THE REVENUE IS AGAINST THE IMPUGNED ORDER IS THE LD. CIT(A)S POWERS FOR D IRECTING THE A.O. TO CONSIDER THE CLAIM OF THE ASSESSEE AND FURTHER WHEN THE ASSESSEE HAS NOT MADE CLAIM IN THE RETURN OF INCOME, FRESH CLAIM CAN NOT BE MADE WITHOUT FILING THE REVISED RETURN. WE DO NOT AGREE WITH THE CONTE NTION OF THE LD. D.R. ON BOTH THE COUNTS BECAUSE THE APPELLATE AUTHORITY HAS THE JURISDICTION AND POWER TO ENTERTAIN THE FRESH CLAIM. IN THE CASE IN HAND, THIS IS NOT A FRESH OR NEW CLAIM RAISED BY THE ASSESSEE BUT IT HAS POINTED OUT ONLY A MISTAKE IN THE AMOUNT CLAIMED IN THE RETURN OF INCOME. ACCORDINGL Y, THE CORRECT AMOUNT OF GRATUITY WAS CLAIMED DURING THE ASSESSMENT PROCEEDI NG. IN VIEW OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF NT PC, 229 ITR 383, THE APPELLATE AUTHORITY HAS THE POWER TO ENTERTAIN EVEN FRESH CLAIM. THEREFORE, WE DO NOT FIND ANY ERROR IN THE ORDER OF LD. CIT(A) IN ENTERTAINING THE CORRECT ITA 1217/M/11 4 AMOUNT OF GRATUITY PAID BY THE ASSESSEE SUBJECT TO VERIFICATION BY THE A.O. THOUGH THE LD. CIT(A) HAS NO JURISDICTION TO REMAND THE MATTER AND COULD HAVE ORDERED A REMAND REPORT, HOWEVER, ON THE BASIS OF THIS TECHNICAL OBJECTION, THE CLAIM OF THE ASSESSEE CANNOT BE DENI ED. ACCORDINGLY, WE DIRECT THE A.O. TO VERIFY THE CORRECT AMOUNT OF GRATUITY A ND ALLOW THE SAME AS PER LAW. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH JAN. 2015 !' # $% &! ' 14-01-2015 ( ) SD/- SD/- (RAJENDRA) (VIJAY PAL RAO ) JUDICIAL MEMBER ACCOUNTANT MEMBER $ 5 MUMBAI ; &! DATED 1`4-1-2015 [ .=../ R.K. , SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. > () / THE CIT(A) 2, MUMBAI 4. > / CIT- -II, MUMBAI 5. AB( ==CD , CD , $ 5 / DR, ITAT, MUMBAI G BENCH 6. (FG H / GUARD FILE. ' / BY ORDER, A = //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 5 / ITAT, MUMBAI