The Pollachi Coop Urban Bank Ltd., CHENNAI V. ACIT, Coimbatore

ITA 1465/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57899 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-02-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 25-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R VIJAYARAGHAVAN

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI A BENCH, CHENNAI. BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER & SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1465/MDS/2011 ASSESSMENT YEAR: 2007-08 THE POLLACHI COOP URBAN BANK LTD. 79, UDUMALPET ROAD, POLLACHI 1. [PAN: AAAAT4284A] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, SALARY CIRCLE I, COIMBATORE. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R. VIJAYARAGHAVAN , ADVOCATE REVENUE BY : SHRI SHAJI P. JACOB, ADDL. CIT DATE OF HEARING : 06.02.2012 DATE OF PRONOUNCEMENT : 06.02.2012 ORDER PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A) II, COIMBATORE DATED 19.05.2011 PASSED IN IT APPEAL NO. 429C/09- 10 IN ASSESSMENT YEAR 2007-08. SHRI R. VIJAYARAGHAV AN, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI SHAJ I P. JACOB, ADDL. CIT REPRESENTED ON BEHALF OF THE REVENUE. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APP EAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (AP PEALS) IS CONTRARY TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF ` .5,13,157/ - THE APPELLANT BANK I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.14 1414 1465 6565 65/M/11 /M/11 /M/11 /M/11 2 HAVE PAID TO LIC TOWARDS GROUP GRATUITY INSURANCE O F ITS EMPLOYEES. 2.1 THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAD ALREADY FILED AN APPLICATION BEFORE THE ADMINISTRATIVE COMMISSIONER OF INCOME TA X-III FOR RECOGNITION OF FUND IN TERMS OF PART-C OF FOURTH SC HEDULE. HENCE THE ABOVE CLAIM OF THE APPELLANT SHOULD BE ALLOWED. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT ADJUDICATING THE CLAIM OF THE APPELLANT REGARDING T HE PAYMENT MADE TOWARDS GRATUITY TO THE EMPLOYEES AMOUNTING TO ` .7,72,200/- AS IT WAS NOT RAISED BEFORE THE ASSESSI NG OFFICER AT THE TIME OF ASSESSMENT. 3.1 THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE ADJUDICATED THE ABOVE GROUND RAISED BY THE APPELLAN T AT THE TIME OF APPELLATE PROCEEDING AND ALLOWED THE SAME AS BUS INESS EXPENDITURE. 4. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL G ROUNDS AT THE TIME OF HEARING. 3. GROUND NO. 1 AND 4 OF THE APPEAL ARE GENERAL IN NATURE AND HENCE REQUIRES NO ADJUDICATION BY US. 4. THE LD. AR OF THE ASSESSEE HAS RAISED ONLY ISSU E IN GROUND NO. 3 OF THE APPEAL, WHICH IS THAT THE LD. CIT(A) ERRED IN N OT ADJUDICATING THE CLAIM OF THE ASSESSEE REGARDING PAYMENT MADE TOWARDS GRATUIT Y TO THE EMPLOYEES AMOUNTING TO ` .7,72,200/-. 5. AT THE OUTSET, THE LD. AR OF THE ASSESSEE SUBMI TTED THAT THIS GROUND OF APPEAL WAS NOT RAISED BEFORE THE ASSESSING OFFICER, BUT WAS RAISED FIRST TIME BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAS NOT AD JUDICATE THE SAME. IT IS AN ADMITTED FACT THAT AN APPLICATION FILED BEFORE THE LD. CIT III, COIMBATORE FOR I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.14 1414 1465 6565 65/M/11 /M/11 /M/11 /M/11 3 RECOGNITION OF THE FUND, WHICH WAS NOT RECOGNIZED B Y THE LD. CIT(A). HE ARGUED THAT INSPITE OF THAT ACTUAL AMOUNT OF GRATUI TY PAID DURING THE YEAR TO THE RETIRED EMPLOYEES IS ALLOWABLE DEDUCTION TO THE ASSESSEE. HE PRAYED THAT THE ISSUE MAY BE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY FROM THE RECORDS OF THE ASSESSEE AND THEN DE CIDE THE ISSUE. 6. THE LD. DR DID NOT HAVE OBJECTION TO THE ABOVE SUBMISSIONS OF THE LD. AR. 7. AFTER CONSIDERING THE RIVAL SUBMISSION AND MATE RIALS AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE HAS RAISED THE GR OUND BEFORE THE LD. CIT(A) THAT PAYMENTS MADE FOR GRATUITY TO THE RETIRED EMPL OYEES AMOUNTING TO ` .7,72,200/- WAS ALLOWABLE DEDUCTION TO THE ASSESSEE ON ACTUAL PAYMENT OF THE SAME. THE LD. CIT(A) HAS NOT ADJUDICATED THE IS SUE AS THIS ISSUE WAS NOT RAISED BEFORE THE ASSESSING OFFICER. WE FIND THAT I T IS NOT IN DISPUTE THAT THE ASSESSEE CLAIMED DEDUCTION IN RESPECT OF ENTIRE AMO UNT RELATING TO THE GRATUITY. THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFI ED IN NOT ADJUDICATING THE ISSUE ONLY ON THE GROUND THAT SPECIFIC PLEA WAS NOT RAISED BEFORE THE ASSESSING OFFICER. THE LD. DR HAS NOT DISPUTED THE LEGAL POINT THAT THE GRATUITY ACTUALLY PAID TO THE EMPLOYEES, WHO RETIRE D DURING THE RELEVANT YEAR IS ALLOWABLE AS DEDUCTION. WE, THEREFORE, RESTORE T HE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR NECESSARY VERIFICATION AN D THERE AFTER ADJUDICATION AFRESH AS PER LAW AFTER ALLOWING REASONABLE OPPORTU NITY OF HEARING TO THE ASSESSEE. THUS, THIS GROUND OF APPEAL IS ALLOWED FO R STATISTICAL PURPOSE. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.14 1414 1465 6565 65/M/11 /M/11 /M/11 /M/11 4 8. NO OTHER POINT HAS BEEN URGED BY THE ASSESSEE E XCEPT THE ABOVE POINT. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED AT THE CLOSE OF THE HEARING IN THE PRESENCE OF THE PARTIES ON 06.02.2012. SD/- SD/- (GEORGE MATHAN) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER CHENNAI, DATED, THE 06.02.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.