I.T.O. Ward -2, BHANDARA(MH) V. THE BHANDARA DIST. CENTRAL CO.OP. BANK LTD, BHANDARA(MH)

ITA 14/NAG/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1299 (ITAT-NAGPUR)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 20-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Bad and doubtful debts
• Section: 143(3)

Judgement Text

1 ITA NOS. 14 & 15/NAG/2016. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER.. I.T.A.NO.14 / NAG/2016 ASSESSMENT YEAR : 2011 - 12 I.T.A.NO.15 / NAG/2016 ASSESSMENT YEAR : 2012 - 13 INCOME TAX OFFICER, THE BHANDARA DISTRICT CENTRAL WARD NO - 2 VS COOPERATIVE BANK LTD. BHANDARA, BHANDARA. PAN AAAAT0627K APPELLANT. RESPONDENT. APPELLANT BY : SHRI A.R. NINAWE. RESPONDENT BY : SHRI MUKESH AGRAWAL . DATE OF HEARING : 22 - 11 - 2016 DATE OF PRONOUNCEMENT : 25 TH NOV.., 2016 O R D E R. PER RAM LAL NEGI THESE APPEALS HAVE BEEN PREFERRED BY THE REVENUE AGAINST IMPUGNED ORDERS DATED 12/11/2015 PASSED BY THE CIT(APPEALS) - II, NAGPUR PERTAINING TO THE ASSESSMENT YEAR 2011 - 12 AND 2012 - 13 RESPECTIVELY, WHEREBY THE LEARNED CIT(APPEALS) PARTLY AL LOWED THE APPEALS FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDERS PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). SINCE, THESE APPEALS PERTAIN TO THE SAME ASSESSEE FOR THE DIFFERENT ASSESSMENT YEARS, BOTH WERE CLUBBED, HEARD TOGETHER AN D ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 ITA NOS. 14 & 15/NAG/2016. 2. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER ON THE FOLLOWING EFFECTIVE GROUNDS : - 1) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) HAS ERRED IN DI RECTING THE AO TO ALLOW THE DEDUCTIONU/S 36(1)(VII) OF THE IT ACT,1961 TO THE ACTUAL PROVISIONS MADE BY THE ASSESSEE FOR THE BAD AND DOUBTFUL DEBTS. 2) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A)IS CORRECT IN HOLDING THAT THE ASS ESSEE CO - OPERATIVE BANK BE TREATED AT PAR WITH SCHEDULED BANK FOR THE PURPOSE OF DEDUCTION U/S36(1)(VII) OF THE IT ACT,1961. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEES CASE IS COVERED BY THE DECISION DATED 25.2, 2016 RENDERED BY THE NAGPUR BENCH OF ITAT IN ASSESSEES OWN CASE (ITA NO 245/NAG/2014). IN THE SAID APPEAL THE ITAT HAS DISMISSED THE APPEAL OF THE REVENUE AND DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. HENCE, THE REVENUES APPEAL IS LIABLE TO BE DISMISSED. 4. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE RELYING ON THE ASSESSMENT ORDER SUBMITTED THAT THE LD. CIT(A) HAS WRONGLY ALLOWED THE DEDUCTION IN QUESTION TREATING THE ASSESSEE COOPERATIVE BANK AT PAR WITH SCHEDULED BANKS. 5 . WE HAVE HEARD THE PARTIES AND ALSO GONE THROUGH THE MATERIAL PLACED BEFORE US. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) HAS WRONGLY HELD THAT THE ACTUAL AMOUNT DEBITED ON ACCOUNT OF PROVISIONS FOR BAD AND DOUBTFUL DEBT IS ALLOWABLE DE DUCTION UNDER THE PROVISIONS OF SECTION 36(1)(VIIA) OF THE ACT. WE NOTICE THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE COORDINATE BENCH OF THE ITAT IN ASSESSEES OWN CASE(ITA NO345/NAG/2014 FOR THE ASSESSMENT YEAR 2010 - 11) THE COORDIN ATE BENCH HAS DECIDED THE IDENTICAL ISSUE HOLDING AS UNDER: - ON THIS SHORT ISSUE WE HAVE HEARD THE SUBMISSIONS OF BOTH THE SIDES. AT THE OUTSET WE HAVE BEEN INFORMED THAT R.B.I. HAS ISSUED A LIST OF BANKS 3 ITA NOS. 14 & 15/NAG/2016. TITLED AS LIST OF DCCBS IN MAHARASHTRAWEARING A T SR.NO. 6 THE NAME OF THE ASSESSEE IS MENTIONED. IT HAS ALSO BEEN PLACED ON RECORD THAT IN EXERCISE OF THE SAID POWERS CONFERRED ON THE RESERVE BANK OF INDIA ACCORDING TO BANKING REGULATION ACT THE ASSESSEE HAD BEEN GRANTED LICENCE TO COMMENCE AND CARRY O N BANKING BUSINESS SUBJECT TO CERTAIN CONDITIONS. IN ADDITION TO THE ABOVE INFORMATION, OUR ATTENTION HAS BEEN DRAWN ON AN ORDER OF ITAT, NAGPUR BENCH, NAGPUR PRONOUNCED IN THE CASE OF AICT VS. ARAVIND SAHAKARI BANK LTD.,KATOL(ITA NO376&377/NAG/2012,ASSTT. YEARS 2009 - 10 AND 2010 - 11) ORDER DATED 16 TH SEPT., 2015 WHEREIN AFTER CONSIDERING THE PROVISIONS OF SECTION 36 (1)(VII)(A) AND THE BANKING REVELATION ACT, THE COORDINATE BENCH HAS HELD AS UNDER: - UPON THE CAREFUL CONSIDERATION WE NOTE THAT THE AO HAS MADE THE DISALLOWANCE UNDER SECTION 36 (1)(VIIA) BY HOLDING THAT THE ASSESSEE BANK IS NEITHER A SCHEDULED BANK NORA COOPERATIVE BANK. NOW FROM THE FINDING OF THE LEARNED CIT (APPEALS) ABOVE AND THE SUBMISSION OF THE LEARNED COUNSEL OF THE ASSESSEE IT TRANSPIRES THAT A CONJOINED READING OF THE BANKING REVELATION ACT AND THE COMPANIES ACT MAKES IT CLEAR THAT ALL THE COOPERATIVE BANKS OPERATING UNDER THE DIRECT SUPERVISION AND REGISTRATION OF RBI ARE COMPANIES WITHIN THE MEANING OF SECTION 5 (C) OF THE BANKING REVE LATION ACT,1949. THE ASSESSEE BANK I.E. ARAVIND SAHAKARI BANK LTD.KATOL HAS BEEN DULY REGISTERED AND APPROVED BY THE RESERVE BANK OF INDIA AND HAS BEEN SO NOTIFIED AS PER THE LIST SUBMITTED BY THE LEARNED COUNSEL OF THE ASSESSEE THAT ONCE THE RESERVE BANK OF INDIA RECOGNISES AND NOTIFIES A COOPERATIVE BANK IS A KNOWN SCHEDULED BANK, THE REVENUE CANNOT CONTEND OTHERWISE. ADMITTEDLY UPON FULFILLING ALL THE NECESSARY CONDITIONS OF THE RBI, THE ASSESSEE BANK HAS BEEN DULY NOTIFIED AS A NON SCHEDULED BANK AND H ENCE BEING A NONSECURE BANK IT IS ENTITLED TO DIRECTION U/S 36 (VIIIA) OF THE IT ACT. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (APPEALS). HENCE WE UPHOLD THE SAME 5 RESPECTFULLY FOLLOWING THE ABOVE DECISION AND CONSIDERI NG THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE HEREBY AFFIRM THE FINDING OF LEARNED CIT(APPEALS). GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 4 ITA NOS. 14 & 15/NAG/2016. 6. HENCE, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH WE UPHOLD THE FINDINGS OF THE LD. CIT(A) AND DISMISS THE GROUNDS RAISED BY THE REVENUE. I.T.A.NOS.15 / NAG/2016 AY 2012 - 13 THE FACTS OF THIS APPEAL AND GROUNDS RAISED BY THE REVENUE ARE SIMILAR TO THE ASSESSEES OWN CASE ITA NO 14/NAG/2016, AY 2011 - 12 (SUPRA). SINCE WE HAVE UP HELD THE ORDER PASSED BY THE LD. CIT(A) AND DISMISSED THE REVENUES APPEAL, ITA NO 14/NAG/2016 FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL, WE UPHOLD THE ORDER PASSED BY THE LD. CIT(A) IN THE PRESENT CASE AND DISMISS THE APPEAL OF THE R EVENUE FOR THE SAME REASONS. IN THE RESULT, THE APPEAL FILED BY THE REVENUE FOR THE AY 2011 - 12 AND 2012 - 13 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF NOV., 2016. SD/ - SD/ - ( SHAMIM YAHYA) (RAM LAL NEGI) ACOUNTANT MEMBER. JUDICIAL MEMBER. NAGPUR, DATED: 25 TH NOV. , 2016. COPY FORWARDED TO : 1. THE BHANDARA DIST. CENT R AL COOP. BANK LTD., CIVIL LINES, J.M. PATEL COLLEGE ROAD, BHANDARA.. 2. I.T.O., WARD - 2, BHANDARA. 3. C.I.T. - II NAGPUR. 4. CIT(APPEALS), - II, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.