Appeal details
Counselvise Citation
[2023] 103 COUNSELVISE.COM (IT) 3366 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
16-02-2023
Appeal Filed By
Assessee
Order Result
AllowedAllowed
Bench Allotted
C
Next Hearing Date
04-01-2023
Assessment Year
2006-2007
Appeal Filed On
09-02-2020
Judgement Text
आयकर अपील य अ धकरण, कोलकाता पीठ ‘‘सी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH: KOLKATA ी राजेश क ु मार, लेखा सद य एवं ी संजय शमा या यक सद य के सम [Before Shri Rajesh Kumar, Accountant Member & Shri Sonjoy Sarma, Judicial Member] I.T.A. Nos. 173 & 174/Kol/2020 Assessment Years: 2006-07 &2007-08 Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank) (PAN: AAALB 0462 D) Vs. ACIT, Circle-42, Murshidabad Appellant / (अपीलाथ ) Respondent / ( !यथ ) Date of Hearing / स ु नवाई क$ त&थ 05.01.2023 Date of Pronouncement/ आदेश उ)घोषणा क$ त&थ 17.02.2023 For the Appellant/ नधा /रती क$ ओर से Shri Soumitra Choudhury, Advocate For the Respondent/ राज व क$ ओर से Shri Vijay Kumar, Addl. CIT ORDER / आदेश Per Rajesh Kumar, AM: These are the appeals preferred by the assessee against the separate orders of the Ld. Commissioner of Income Tax (Appeals)-12, Kolkata (hereinafter referred to as the Ld. CIT(A)”] dated 30.10.2019 and 28.10.2019 for the AYs 2006-07 & 2007- 08 respectively . 2. First we shall adjudicate in ITA No. 173/Kol/2020 for AY 2006-07. 2 I.T.A. Nos. 173 & 174/Kol/2020 Assessment Years: 2006-07 & 2007-08 Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank) 3. The assessee has raised various grounds of appeal in which there are two effective issues. The first effective issue raised in ground no. 4 & 5 is against the order of Ld. CIT(A) confirming the order of AO wherein the AO assessed the income from other sources at Rs. 28,01,331/- by rejecting the exemption u/s 80P(2)(a)(i) of the Act. The said grounds nos. 4 &5 are reproduced as under: 4. For that on the facts and in the circumstances of the case the Ld. CIT(A) should have allowed the exemption u/s 80P(1)/80P(2)(a)(i) as the assessee is carrying on the business of banking and the total income has been computed by the AO not according to law, as such his finding is completely arbitrary, unjustified and illegal. 5. For that on the facts of the case, Ld. CIT(A) was wrong in determining the income from other sources at Rs. 28,01,331/- and not following the direction of Ld. ITAT in the case of Nadia Gramin Bank, as such his finding is completely arbitrary, unjustified and illegal. 4. Facts in brief are that the assessee is a Regional Rural Bank established by Govt. of India under the provisions Regional Rural Bank Act, 1976.Section 22 of the said Act provides that for the purpose of income tax , RRB’s will be treated as co- operative societies and accordingly the entire income of a RRB’s from banking operation would be exempted from payment of tax u/s 80P(2)(a)(i) of the Act. CBDT has also issued a circular No. 319 on 11.01.1982 clarifying that deduction u/s 80P(2)(a)(i) has to be allowed to the RRB’s while making income tax assessment of RRB’s in respect of banking operations as RRB are co-operative societies. During the year the assessee filed return of income on 31.10.2006 declaring total income at Nil after claiming deduction u/s 80P of the Act. Thereafter the case of the assessee was selected for scrutiny and income was assessed at Rs. 28,01,330/-. The computation of income by the AO is extracted below for the sake of convenience. According to the AO the earnings/income of the assessee from long term investments in shares, debentures etc. otherwise than under SLR and CRR scheme as per requirements of RBI guidelines are not eligible for deduction u/s 80P of the Act as claimed by the assessee. The AO also observed that from TDS certificate issued by the persons concerned responsible for paying such income, the said income are to be assessed as Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank) income from other sources. However the deduction by way of proportionate establishment operating and other incidental expenses and accordingly the income was computed as under: 5. In the appellate proceedings, the Ld. CIT(A) instead of allowing exemption u/s 80P(2)(a)(i) of the Act enhance calculated by the AO as income from business observed that since no written submission proceedings and therefore the Ld. CIT(A) presumed that assessee is engaged in the business of banking and providing credit facilities to even outsiders members of the bank. 6. We have heard the rival contentions and perusing the material on record, the undisputed facts are that the assessee is a Regional Rural Bank engaged in providing banking facilities. We have also perused carefully the provisions of Bank Act, 1976 which provides that and consequently ,the income from banking operation also note that the CBDT 3 I.T.A. Nos. Assessment Years: Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank) income from other sources. However the AO held that the assessee is entitled to deduction by way of proportionate establishment operating and other incidental expenses and accordingly the income was computed as under: In the appellate proceedings, the Ld. CIT(A) instead of allowing exemption u/s 80P(2)(a)(i) of the Act enhanced the income by Rs. 1,30,12,08,122/ calculated by the AO as income from business as stated above. nce no written submissions were made during the herefore the Ld. CIT(A) presumed that assessee is engaged in the business of banking and providing credit facilities to even outsiders ave heard the rival contentions and perusing the material on record, the undisputed facts are that the assessee is a Regional Rural Bank engaged in providing We have also perused carefully the provisions of which provides that RRB’s would be treated as cooperative societies ,the income from banking operations of the would be exempt he CBDT vide circular No. 319 on 11.01.1982 clarified that the . 173 & 174/Kol/2020 : 2006-07 & 2007-08 Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank) assessee is entitled to deduction by way of proportionate establishment operating and other incidental In the appellate proceedings, the Ld. CIT(A) instead of allowing exemption u/s the income by Rs. 1,30,12,08,122/- which was The Ld. CIT(A) made during the appellate herefore the Ld. CIT(A) presumed that assessee is engaged in the business of banking and providing credit facilities to even outsiders and also to the ave heard the rival contentions and perusing the material on record, the undisputed facts are that the assessee is a Regional Rural Bank engaged in providing We have also perused carefully the provisions of Regional Rural cooperative societies of the would be exempt. We No. 319 on 11.01.1982 clarified that the 4 I.T.A. Nos. 173 & 174/Kol/2020 Assessment Years: 2006-07 & 2007-08 Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank) deduction u/s 80P(2)(a)(i) has to be allowed to the RRB’s while making income tax assessment of RRB’s in respect of income from banking operations as RRB are treated as co-operative societies. Therefore in our considered view, the assessee is entitled to claim exemption of income u/s 80P(2)(a)(i) of the Act. The Ld. Counsel for the assessee makes further pleas before us. First that even after any disallowance or adjustment is made in the computation of income of the assessee that could not impact the taxability of the said income as exemption is allowed to the assessee out of total gross income and therefore whatever has been added to the income of the assessee that has to be allowed as exemption of income. The contentions of the AR finds support from the decision of Co-ordinate Bench of Kolkata in the case of Sagar Gramin Bank (presently merged with Bangiya Gramin Vikash Bank) vs. DCIT in ITA No. 304/Kol/2012 for AY 2002-03. The relevant portion is reproduced as under: “3. We have heard rival contentions and gone through facts and circumstance ~ the case We find that the assessee is eligible for deduction u/s. 80P of the act and payment of gratuity is also out of eligible income and that also gross total income of the Co-operative Society. As pointed out by Ld. Counsel for the assessee to the provisions of section 80P(1) of the Act that the gross total income includes any income referred to in sub-section (2) means the deduction will be allowed from gross total income. The relevant provision of section 80P(1) reads as under: “(1) Where in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. ” It means the addition made by AO on account of provision for gratuity, eventually which was paid before filing of return of income u/s. 139(1) of the Act, is eligible for deduction u/s. 80P of the Act in view of the fact that deduction is to be allowed out of gross total income. Accordingly, this disallowance in any way will not affect on income for the reason that this will also be part of gross total income and will be eligible for deduction u/s. 80P of the Act. This issue of assessee’s appeal is allowed.” 7. We have also perused the judgment of the Special Bench in the case of Farrukhabad Gramin Bank vs. ACIT reported in 103 ITTD P-207 (Agra) wherein it has been held that the assessee RRB is a co-operative bank and is eligible for deduction u/s 80P(2)(a)(i) of the Act on the gross total income returned by the assessee. The case of the assessee is also squarely covered by the decision of Hon’ble Supreme Court in the case of CIT vs. Karnataka State Co-operative Apex Bank 5 I.T.A. Nos. 173 & 174/Kol/2020 Assessment Years: 2006-07 & 2007-08 Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank) reported in 251 ITR P-194. On the issue of interest/income earned on non-SLR and CRR Schemes , we find merit in the contentions of the Ld. A.R that the exemption u/s 80P(2)(a)(i) is available to the assesse. We have perused the decision of Co-ordinate Bench in the case of Sagar Gramin Bank (supra) wherein it was held as under: 5. At the outset Ld. Counsel for the assessee filed copy of Tribunal’s order in assessee’s own case in ITA No. 1771/K/2008 for AY 2005-06 and submitted that the issue is squarely covered in favour of assessee. We find that the Tribunal in ITA No. 1771/K/2008 for AY 2005-06 in assessee’s own case has held as under: "11. We have heard rived contentions and gone through facts and circumstances of the case. We find that the assessee bank has deployed total deposits into three types of income earning instruments i.e. CRR, SLR funds and non-SLR funds. The investments of the above funds are made as per RRB Act, 1976 and violations of the Act have been determined as SLR fund and non-SLR find. Income has been determined according to the funds deployed as per RRB Act We have gone through the above case laws and find that whether income is attributable to SLR or non-SLR funds would not make any difference for the purpose of quantifying deduction on interest by Cooperative Bank u/s. 80P(2)(a)(i) of the Act as deposits of surplus idle money available from working capital i.e. reserves, excess collection of interest and other incomes all attributable to banking business. Therefore, the interest earned on non-SLR finds will also qualify for deduction u/s. 80P(2)(a)(i) of the Act. Hon’ble Allahabad High Court in the case of CIT Vs. Muzaffarnagar District Co-operative Bank Ltd. (2013) 214 Taxman 498 (All) relying on the decision of Hon’ble Supreme Court in the case of Bihar State Cooperative Bank Ltd. Vs. CIT (I960) 39 ITR 114 (SC) and of Hon’ble Bombay High Court in the case of CIT Vs. Goa Urban Cooperative Bank Ltd.. (Tax Appeal Nos. 6 & 8 of 2005. and in Tax Appeal No. 54 of 2008, decided on 1.5.07.2009) have held that interest earned out of deposits of surplus fund and interest uearned on SLR or non-SLR funds will qualify for deduction u/s. 80P(2)(a)(i) of the Act. The relevant paras 8, 9 and 10 reads as under: “8. The Supreme Court in Bihar Slate Co-operative Bank Ltd. (supra) explained in para 12 and 13 that the interest earned out of deposits of surplus fund has to be treated asinterest earned in the banking business. Paras 11, 12 and 13 of the judgment are qu as below: "11. In the Surat Peoples ' Co-operative Bank Ltd vs. The Commissioner of Income- tax, Ahmedabad (2) the profit arose during the course of banking business out of the sale of Government securities which formed part of the stock-in-trade and as it was a co-operative bank the profits made Iron, such sales were held to be exempt from taxation under the Notification. 12. In the instant case the co-operative society (the appellant is a Bank. One of its objects is to carry on the general business of banking. Like other banks money is its stock-in-trade or circulating capital and its normal business is to deal in money and credit. It cannot be said that the business of such a Bank consists only In receiving deposits and lending money to its members or such other societies as are mentioned in the objects and that when it lays out its moneys so that they may be readily available in meet the demand of its depositors if and when they arise. it is not 6 I.T.A. Nos. 173 & 174/Kol/2020 Assessment Years: 2006-07 & 2007-08 Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank) a legitimate made of carrying on of its banking business. The Privy Council in the Punjab Cooperative Bank Ltd, v. The Commissioner of income-tax. Lahore [1940]8 ITR. 635 where the profits arose from the sale of Government securities pointed out at p.645 that in the ordinary cases the business of a Bank essentially consists of dealing with money and credit. Depositor put their money in the Bank at-a small rate of interest and in order in meet their demands if and when they arise the Bank has always to keep sufficient cash or easily realizable securities. That is a normal step in the carrying on of the banking business. In other words that is an act done in what is truly the carrying on or carrying out of a business, h may be added that another mode of conducting business of a Bank is to place its funds in deposit with other banks and that also is to meet demands which may be made an it. It was however argued dial in the instant case the moneys had been deposited with the Imperial Bank on long term deposits inasmuch as (they were depositedfor one year and were renewed from time to time, also for a year; but as is shown by the accounts these deposits fed due at short intervals and would have been available to the appellant had any need arisen. 13. Stress was laid on the use of the word surplus both by the tribunal as well as by the High Court and it was also contended before us that in the bye laws under the heading ‘business of the bank' it was provided that the bank could invest surplus funds when not required for the business of' die bank in one or more ways specified in Section 19 of the Bihar Act of the Bye-Laws. Whether funds invested as provided in s 19 of the Bihar Act would be surplus or not does not arise fur decision in this case, but h has, not been shown that the moneys which were in deposit with Other banks were surplus within that bye-law so as to take it out of banking business. As we have pointed out above, it is a normal mode of carrying on banking business to invest moneys in a manner that they are readily available and that is just as much a part of the mode of conducting a Bank's business as receiving deposits or lending moneys or discounting handies or issuing demand drafts. That is how the circulating capital is employed and that is the normal course of business of a hank. The moneys laid out in the farm of deposits as in the instant case would not cease to be a part of the circulating capital of the appellant nor would they cease to form part of its banking business. The returns flowing from them would form part of its profits from its business In a commercial sense the directors of the company owe if to the bank to make investments which earn them interest instead of letting money lie idle. It cannot be said that the funds of the Bank which were not lent to borrowers but were laid out the form of deposits in another bank to-add in the profits instead of lying idle, necessarily ceased to be a part of the stock-in-trade of the bank or that the interest arising therefrom did not form part of its business profits . Under the bye-laws 68 one of the objects of the appellant bank is to carry on the general business of banking and therefore subject to the Co-operative Societies Act. It has to carry on its business in the manner that ordinary banks do. It may be added (hat the various heads under s. 6 of the Income Tax Act and the provisions of the Act applicable to these various heads are mutually exclusive. Section 12 is a residuary section and does not come into operation until the preceding heads are excluded Commissioner of Income-tax v. Rasant Rai Takhat Singh [1933]1 I.T.R 197. " 9. The Bombay High Court in the Goa Urban Co-operative Bank Ltd.’s case (supra) has held in paras 2 and 3 as follows.- 2. The facts are hardly hi controversy. The investment by the assessee Bank is in excess of statutory liquidity ratio i.e. 25% of demand and liabilities in terms of Section 24 of the Banking Regulation Act. However, the excess investment made in SLR securities were subjected to taxation by the 7 I.T.A. Nos. 173 & 174/Kol/2020 Assessment Years: 2006-07 & 2007-08 Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank) .Assessing Officer vide his order dated 24fh February. 1999 which was upheld in appeal by the Commissioner of Income Tax (Appeals) was felt by the authorities that the income from any investments coming out of SLR would be entitled to deduction under Section 80P(2)(a)(i) in terms of the Judgment of the Supreme Court in M.P. Co-operative Bank Ltd v. Additional CITMANU/Sc/1085/1996: 218 ITR 438 only if it was income from the banking business. 'These amount had been invested in approved securities by the Assessee Bank i.e. the Central Bank and other trust securities. Noticing that the object of Section 80P(2)(a)(i) was to encourage, co-operative movement in the country and any income of the society from the investment which does not form part of the circulating capital or working capital or stock-in trade of the banking business cannot be said to be the profits and gains attributable to the business of banking and entitled to deduction under Section 80P(2)(a)(i) on these reasonings the Commissioner declined to interfere in the appeal. The Income Tax Appellate Tribunal while upholding both these orders whilst referring to the Judgment of the Gujarat High Court in the case of Commissioner of Income Tax v. Baroda Peoples Co-operative Bank Ltd. MANU/GJ/0493/2005 : (2006) 280 ITR 282 followed the principle while referring to the Special Bench Judgment of the Ahmedahad High Court in the case of Surat District Co-operative Bank Ltd. case MANU/lB/5017/2002 : (2003) 262 ITR (AT) 1 and held as under: In this case it was held by the. Special Bench of the Tribunal that, the interest income on investment in government securities, fixed deposits, KVPs and IVPs. Investments with the Unit Trust of India, etc:, out of surplus/idle money available from working capital including voluntary reserves, excess collection of interest-lax and locker rent are all income attributable So business of banking and are eligible for grant of deduction Under Section 80P(2)(a)(i) of the Act. Respectfully following the decision of the- Special Bench of the Tribunal, we allow the appeal of the assessee. In the result, the appeal filed by the assesses is allowed. " 3. The learned Counsel appearing for the Department has relied upon the Judgment of the Division Bench of the Bombay High Court in the caw ofi'll' v. Bumagin District Central Co-operative Bank Ltd. MANUMH/0578/2001: (2002) Vol 254 Income Tax Reports page 696 to contend that this deduction was not permissible, lie are not inclined to accept this submission primarily in new vital is held in the case of ( 7 l v. Ratnagiri District Central Cooperative Bank Ltd. (supra) as the issues are no way different. In fact in that case while referring to the Judgment of the Supreme Court in the case of Bihar Stale Co-operative Bank Ltd vs. CIT MANU/SC/ 0139/1960 : (1960) 39 ITR 114 where the Apex Court -clearly held that short term deposits by the Bank was income from normal banking business and was. therefore, exempt from the liability to pm Income Tax. It was further specifically held in that case that since tin-society in that case was engaged in banking activity, its normal business was to deal in money and credit and. therefore, the. money laid out in tin form short-term deposit did not cease to be a circulating capital and interest earned, thereon, could not be other than income generated from the business of banking, and. was therefore exempt from tax. In the present case, the investments have been made by the Bank in government securities, fixed deposits, etc. and the income is utilized for business. There is nothing on record to show that this case of the assessee is 8 I.T.A. Nos. 173 & 174/Kol/2020 Assessment Years: 2006-07 & 2007-08 Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank) not acceptable in view of the law dearly stated by the Bench of this Court, for which we have no reasons to disagree. We dismiss the appeal while answering the questions in favour of the assessee. By this order we dispose of the appeal with reference to the facts of the case." 10. The question as to whether the business is derived from or attributable to SLR or non-SLR funds would not make any difference for the purposes of qualifying the interest earned by the cooperative bank under Section 80P (2) (a) (i) as the deposits of surplus-idle money available from working capital, including reserves, excess collection of interest tax and other incomes are all attributable to the business of banking. The interest from such deposits cannot he said to be beyond the legitimate business activities of the bank. " In view of the above, we are of the view that the issue is squarely covered in favour of and assessee is eligible for deduction u/s. 80P(2)(a)(i) of the Act on interest earned on non-SLR funds. This issue of revenue's appeal is dismissed.” In view of the above facts and circumstances and ratio laid down as discussed above , we set aside the order of Ld. CIT(A) and direct the AO to delete the addition. The ground no 4 & 5 are allowed accordingly. 8. The second issue raised in respect of enhancement of income by the Ld. CIT(A) by Rs. 1,30,12,812/- vide ground no. 6 & 7.We have already discussed and decided the issue supra wherein we have decided that the claim of exemption is to be allowed out of gross total income and therefore any enhancement of income by the ld CIT(A) would not have any impact on the taxable income as deduction u/s 80P(2)(a)(i) of the Act would be allowed on the gross total income. ITA no. 174/Kol/2020 for AY 2007-08. 9. The sole issue raised is against the confirmation of order of AO by Ld. CIT(A) wherein the AO has wrongly added and disallowed a sum of Rs. 2,51,76,148/- from the head “Provisions and contingencies” claimed by the assessee. 10. Facts in brief are that the assessee is a gramin bank incorporated on 24.04.1980 to function as RRB in south and north , 24 Parganas and is fully engaged in the business of banking. The return was filed on 02.11.2007 declaring loss of Rs. 12,31,45,863/- after adjustment of brought forward loss of Rs. 30,80,54,519/- and accordingly ,the accumulated loss of Rs. 43,12,00,383/- was carried forward to the 9 I.T.A. Nos. 173 & 174/Kol/2020 Assessment Years: 2006-07 & 2007-08 Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank) subsequent year. The assessee bank was amalgamated with Regional Rural Bank called Bangiya Gramin Vikash Bank w.e.f 21.02.2007 by notification published from Department of Economic Affairs under Ministry of Finance, New Delhi. The case of the assessee was selected for scrutiny. Pertinent to state that during the year, the assessee has created provisions in the profit and loss account to the tune of Rs. 251.76 lakhswith respect to 01.04.2006 to 20.02.2007 in respect of Sagar Gramin Vikash Banku/s 36(1)(vii) of the Act which were as per the RBI guildelines , the details whereof is given at page 25 of the PB. The AO rejected and disallowed the same and added the same to the income of the assessee. 11. The Ld. CIT(A) simply affirmed the order of AO by stating that the assessee has not made any submissions on the issue to explain the nature of provisions charged to the profit and loss account as how these are allowable u/s 36(1)(vii) of the Act. 12. After hearing the rival submissions and perusing the material on record including page 24 & 25 of the PB which contained the calculation of provisions created of Rs. 251.76 Lakhs under the head provisions and contingencies as per RBI guidelines u/s 36(1)(vii) of the Act. We observe that the assessee was carrying on banking activities as per Banking Regulation Act and that the banking license has not been cancelled till date and therefore the rejection of provisions and contingencies amounting to Rs. 251.76 lakhs claimed in respect of bad and doubtful debts in the balance sheet is contrary to the provisions of Section 36(1)(vii) of the Act. As well as RBI guidelines that the assessee bank makes the provision u/s 36(1)(vii) in respect of rural branches. The action of the authorities below is in violation of the decision of Hon’ble Apex Court in the case of Catholic Syrian Bank in CA No. 1134 of 2011, 343 ITR P-270 wherein it has been held that the provisions created u/s 36(1)(viia) can only be adjusted against rural loans write off. The said view has been upheld by various High Court and Tribunal in the following decisions : 1. South Indian Bank Ltd Vs CIT 262 ITR 579 [KER] 2. CIT Vs Bank of Rajasthan Ltd [2002] 255 ITR 599 (Raj) 10 I.T.A. Nos. 173 & 174/Kol/2020 Assessment Years: 2006-07 & 2007-08 Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank) 3. Syndicate Bank Vs. DCIT 78 ITD 103 (Bang-Trib) 4. United Bank of India Vs. DCIT 68 ITD 332 (Cal Trib) 5. The Karur Vysya Bank Ltd. Vs. DCIT (Chennai Bench) (unreported) 6. Karnataka Bank Ltd. Vs. ACIT (Bangalore Bench) (unreported) 7. Allahabad Bank Vs. ACIT (ITAT 'B’ Bench, Kolkata)-A.Y.2003-04 8. Allahabad Bank Vs. ACIT (ITAT A’ Bench, Kolkata)-A.Y.2001-02 Accordingly we set aside the order of Ld. CIT(A) and direct the AO to delete the disallowance of Rs. 2,51,76,148/-. The appeal of the assesse is allowed. 13. In the result, both the appeals of the assessee are allowed. Order is pronounced in the open court on 17 th February, 2023 Sd/- Sd/- (Sonjoy Sarma /संजय शमा ) (Rajesh Kumar/राजेश क ु मार) Judicial Member/ या यक सद य Accountant Member/लेखा सद य Dated: 17 th February, 2023 SB, Sr. PS 11 I.T.A. Nos. 173 & 174/Kol/2020 Assessment Years: 2006-07 & 2007-08 Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank) Copy of the order forwarded to: 1. Appellant- Murshidabad Gramin Bank (Presently merged with Bangiya Gramin Vikash Bank), NH-34, BMC House, P.O.- Chuanpur, Berhampore, Murshidabad-742101. 2. Respondent – ACIT, Circle-42, Murshidabad 3. Ld. CIT(A)-12, Kolkata (Sent through e-mail) 4. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata
AI Insights
The case involves appeals by Murshidabad Gramin Bank against the orders of the Commissioner of Income Tax (Appeals) which confirmed the additions made by the Assessing Officer to the bank's income for the assessment years 2006-07 and 2007-08. The primary issues were the rejection of the bank's claim for exemption under Section 80P(2)(a)(i) for income from banking operations and the disallowance of provisions made for bad and doubtful debts under Section 36(1)(vii). The Tribunal examined the applicability of Section 80P(2)(a)(i) to the bank's income and the nature of the provisions made under Section 36(1)(vii), ultimately finding in favor of the bank.
