The Nilambur Co-op Urban Bank Ltd, Malappuram V. DCIt, Tirur

ITA 162/COCH/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7752 (ITAT-COCHIN)
• Duration Of Justice: 3 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 01-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Keywords: Question of law; Bad and doubtful debts

Judgement Text

ITA NO 162/COCH/20213 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH KOCHI BEFORE S/ SHRI B P JAIN , AM & GEORGE GEORGE K, JM ITA NO 162/COCH/2013 (A SST YEAR 2009 - 10 ) THE NILAMBUR COOPERATIVE URBAN BANK LTD NILAMBNUR MALAPPURAM DIST KERALA VS THE DYCOMMR OF INCOME TAX CIR CLE 2(2), TIRUR ( APPELLANT) (RESPONDENT) PAN NO. AAATT2863N ASSESSEE BY NONE - WRITTEN SUBMISSIONS FILED REVENUE BY SH A DHANARAJ, SR DR DATE OF HEARING 2 ND AUG 2016 DATE OF PRONOUNCEMENT 2 ND AUG 2016 ORDER PER GEORGE GEORGE K, JM; THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DIRECTED AGAINST THE CIT(A)S ORDER DATED 4.1.2013. THE RELEVANT ASSESSMENT YEAR IS 2009 - 10. 2 AT THE TIME OF HEARING, THE ASSESSEE HAD FILED A LETTER DATED 25 TH JULY 2016 STATING THAT THE APPEAL MAY BE DISPOSED OFF BY THIS TRIBUNAL ON MERITS AFTER CONSIDERING THE WRITTEN SUBMISSIONS FURNISHED BY THE ASSESSEE. THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE READ AS UNDER: 1 THE APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , KOZHIKODE IN ITA - 17 S / TR I CIT / CL T / 2011 - 12 DATED 4 - 1 - 2013 CONFIRMING THE DISA LL OWANCE MA D E IN THE ASSESSMENT OF THE PROVISION MADE FOR BAD AND ITA NO 162/COCH/20213 2 DOUBTFUL DEBTS OF RURAL BRANCHES UNDER SECTION 36(1)(VIIA) OF THE INCOME TAX ACT WAS DECIDED AGAINST THE APPELLANTS B Y THE HO N ' BLE TRIBUNAL IN ORDER IN LT . A . NO. 162 / COCH / 2013 DATED 7 - 6 - 2013 . THE HON ' BLE TRIBUNAL HAD DECIDED THE APPEAL ON THE BASIS OF THE JUDGMENT OF THE HON'BLE HIGH COURT OF KERALA IN THE CASE OF CIT V. THE LORD KRISHNA BANK LTD. REPORTED IN 339 ITR 606. TH E HON ' BLE HIGH COURT HAS HELD THAT THE TERM 'PLACE' MENTIONED IN THE EXPLANATION (IA) TO SECTION 36(1)(VIIA) IS TO BE INTERPRETED AS THE RE V ENUE V ILLAGE AND NOT AS WARD. THE COCHIN BENCH OF THE HON ' BLE TRIBUNAL HAS LAT E R HELD IN THE CASE OF KANNUR DISTR ICT CO - OPERATIVE BANK LT D. V. ACIT REPORTED IN L36 ITD 102 THAT THE DECI S ION OF T HE HIGH COURT OF KERALA IN THE CASE OF CI T V . THE LORD KRISHNA BANK LTD. APPLIE S ALSO TO CO - OPERATI V E BANKS. THE APPELLANTS ' CASE IS COVERED B Y THESE T W O DECISIONS WHICH AR E AGAINST THEM. 2 THE APPE L LANTS HAD FILED AN APPEAL BEFORE THE HON ' BLE HIGH CO U RT OF KERALA AGAINST THE ORDER OF THE HON ' BLE TRIBUNAL . THE QUESTION OF LAW RAISED IN THE APPEAL 'W HETHER THE DEDUCTION C LAIMED B Y THE AS S ES S EE , A CO - OPERATIVE BANK ASSESSED AS CO - OPERATI V E SOCIET Y , IS NOT PERMI S SIBLE UNDER SECTION 36(1 )( V IIA) ' HAS BEEN REMITTED FOR RECONSIDERATION B Y THE HON ' BLE TRIBUNAL IN THE LIGHT OF THE JUDGMENT OF THEHON ' B L E COURT THAT DEDUCTION UNDER S ECTIO N SOP IS ADMISSIBLE TO PRIMARY AGRICULTU R AL CR E D IT SOCIETIES 3 THE APPELLANTS ARE A CO - OPERATIVE URBAN BANK HOLDING A LICENCE FROM THE RESERVE BANK OF INDIA FOR CARR Y ING ON BANKIN G BUSINESS. BEING A CO - OPERATIVE BANK AS DEFINED IN CLAUSE (CCI) OF SECTION 5 OF PART V OF BANKING REGULATION ACT , 1949 , T HE APPELLANTS ARE NOT ELIGIBLE FOR THE DEDUCTION UNDER SECTION 80P (2) (A) (I) OF THE INCOME TAX ACT FOR THE INCOME FROM BANKING BUSINESS. 4 THE HON ' BLE HIGH COURT OF KERALA HAS HELD IN ORDER DATED 15 - 2 - 2016 IN ITA . NO.162 / COCH / 20 13 AND OTHER CONNECT E D A PPEAL S THAT PRIMARY AGRICULTURAL SOCIETIES ARE ELIGIBLE FOR THE DEDUCTION UNDER SECTION 80P AND REMITTED THE QUESTION OF DEDUCTION FOR BAD AND DOUBTFUL DEBTS OF RURAL BRANCHES TO THE HON ' BLE TRIBUNAL IN THE LIGHT OF THAT DECISION. THE APPELLANTS HAVE NOT MADE A CLAIM FOR DEDUCTION UNDER SECTION 80P AT ANY STAGE IN THE ASSESSMENT OR APPEALS AND, THEREFORE , THE APPELLANTS RESPECTFULLY SUBMIT THAT THEIR APPEAL WAS BUNCHED BY MISTAKE WITH APPEALS REGARDING EXEMPTION UNDER SECTION 80P . 5. THE APPELLANTS , THER EFORE , PRAY THAT THEIR APPEAL AS RESTORED BY THE HON ' BLE HIGH COURT MAY BE CONSIDERED AND DISPOSED OF BY TI L E H ON ' BL E T RIBUNAL O N MERITS. 6 THE APPELLANTS REQUEST THAT THE HON ' BLE TRIBUNAL MAY PLEASE EXCUSE THE APPELLANTS FROM APPEARANCE IN PERSON BEFORE THE BENCH FOR THE HEARING. 3 WE HAVE HEARD THE LD DR AND PERUSED THE MATERIAL ON RECORD. 4 FROM THE ABOVE WRITTEN SUBMISSION OF THE ASSESSEE, IT IS CLEAR THAT THE ONLY ISSUE FOR OUR CONSIDERATION IS WHETHER THE DISALLOWANCE MADE IN THE ASSESSMENT ITA NO 162/COCH/20213 3 ORDE R OF PROVISIONS MADE FOR BAD AND DOUBTFUL DEBTS OF RURAL BRANCHES U/S 36(1)(VIIA) OF THE I T A CT IS JUSTIFIED OR NOT. 5 THE ABOVE ISSUE WAS DECIDED BY THE TRIBUNAL AGAINST THE ASSESSEE FOLLOWING THE JUDGMENT OF THE HONBLE KERALA HIGH COURT IN THE CA SE OF CIT VS LORD KRISHNA BANK LTD REPORTED IN 339 ITR 606. THE HONBLE KERALA HIGH COURT IN THE CASE OF LORD KRISHNA BANK HAD HELD THAT THE TERMS PLACE MENTIONED IN THE EXPLANATION(IA) TO SECTION 36(1)(VIIA) IS TO BE INTERPRETED AS THE REVENUE VILLAGE A ND NOT AS WARD. THE TRIBUNAL, IN THE CASE OF KANNUR DIST. COOP BANK LTD VS ACIT REPORTED IN 136 ITD 102 HAD HELD THAT THE JUDGMENT OF THE HON BLE KERALA HIGH COURT, IN THE CASE OF LORD KRISHNA (SUPRA) APPLIES ALSO TO THE CO - OPERATIVE BANKS. ADMITTEDLY, TH E ASSESSEES CASE IS COVERED BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF LORD KRISHNA (SUPRA). IN VIEW OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT, CITED SUPRA, WE HOLD THAT THE ASSESSEE IS NOT ENTITLED TO THE BENE FIT OF DEDUCTION U/S 36(1)(VIIA) OF THE ACT AS THE BRANCHES OF THE ASSESSEE CANNOT BE TERMED AS RURAL BRANCHES . IT IS ORDERED ACCORDINGLY. 6 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 ND DAY OF AUG 2016 . SD/ - S D / - ( B P JAIN ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN: DATED 2 ND AUG 2016 RAJ* ITA NO 162/COCH/20213 4 COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT, 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN