THE GREATER BOMBAY CO OP BANK LTD, MUMBAI V. DCIT 1(3), MUMBAI

ITA 1824/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0679 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 20-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Assessee Lawyers: A L SHARMA
• Keywords: Business income; Opportunity of being heard; Bad and doubtful debts
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 1824/MUM/2013 ( / ASSESSMENT YEAR : 2008 - 09 THE GREATER BOMBAY CO.OP. BANK LTD., 89,GBCB HOUSE, BHULESHWAR, MUMBAI - 400 002 / VS. THE DCIT 1(3), AAYAKAR BHAVAN, MUMBAI - 400 020 ./ ./ PAN/GIR NO. : AABAT 4479N ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI A.L. SHARMA / RESPONDENT BY : SHRI VIJAY KUMAR BORA / DATE OF HEARING : 20 . 0 5 .2015 / DATE OF PRONOUNCEMENT : 20 .0 5 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS IS AN APPEAL BY THE ASSESSEE PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 7 , MUMBAI DT. 6.11.2012 PERTAINING TO ASSESSMENT YEAR 200 8 - 0 9 . 2. THE FIRST GRIEVANCE OF THE ASSESSEE RELATES TO THE ADDITION OF RS. 2,31,31,043/ - BEING PROVISION FOR BAD AND DOUBTFUL DEBTS. ITA. NO. 1824/M/2013 2 3. BEFORE US, THE LD. COUNSEL F OR THE ASSESSEE DREW OUR ATTENTION TO PAGE - 2 OF THE PAPER BOOK AND POINTED OUT THAT THE ASSESSEE HAD ITSELF ADDED BACK THE PROVISION FOR BAD AND DOUBTFUL DEBTS TO THE BUSINESS INCOME OF THE ASSESSEE. THE AO WHILE COMPLETING THE ASSESSMENT ORDER HAS TAKEN THE RETURNED INCOME FROM THE COMPUTATION OF INCOME AND ONCE AGAINST DISALLOWED THE PROVISION FOR BAD AND DOUBTFUL DEBTS WHICH HAS RESULTED INTO DOUBLE ADDITION. 4. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT TO THIS SUBMISSION MADE BY THE LD . COUNSEL. 5. WE HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER. WE HAVE ALSO CONSIDERED THE COMPUTATION OF INCOME PLACED AT PAGE - 2 OF THE PAPER BOOK. WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL. THE ASSESSEE ITSELF HAS ADDED BACK THE PROVISION F OR BAD AND DOUBTFUL DEBTS TO THE RETURNED INCOME THEREFORE ADDITION MADE BY THE AO AGAIN IN RESPECT OF THE PROVISION FOR BAD AND DOUBTFUL DEBTS HAS RESULTED INTO DOUBLE ADDITION. WE THEREFORE, DIRECT THE AO TO DELETE THE ADDITION OF RS. 2,31,31,043/ - . GR OUND NO. 1 IS ALLOWED. 6. GROUND NO. 2 RELATES TO THE ADDITION OF RS. 95,08,175/ - MADE U/S. 14A OF THE ACT. THE AO HAS MADE THE ADDITION AS PER COMPUTATION OF DISALLOWANCE U/S. 14A R.W. RULE 8D PROVIDED BY THE ASSESSEE. 7. BEFORE THE LD. CIT(A) IT WA S STRONGLY CONTENDED THAT THE ASSESSEE HAS COMPUTED THE DISALLOWANCE ONLY AT THE REQUEST OF THE AO. HOWEVER, THE ASSESSEE HAS NOT MADE ANY DISALLOWANCES U/S. 1`4A R.W. RULE 8D. IT WAS FURTHER BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT THE ASSESSEE WAS HAVING SUFFICIENT OWN FUNDS FOR MAKING INVESTMENTS IN THE SHARES. THE ITA. NO. 1824/M/2013 3 LD. CIT(A) DISMISSED THE SUBMISSION MADE BY THE ASSESSEE. THE LD. CIT(A) WAS OF THE VIEW THAT THE AO HAS DISALLOWED THE AMOUNT AS COMPUTED BY THE ASSESSEE. 8. AGGRIEVED BY THIS THE ASSESSEE IS BEFORE US. 9. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY SUBMITTED THAT THE CLAIM OF THE ASSESSEE HAS NOT BEEN PROPERLY APPRECIATED BY THE LD. CIT(A). THE LD. COUNSEL ONCE AGAIN SUBMITTED THAT THE ASSESSEE HAD SUFFICIENT OWN FUNDS FOR MAKIN G THE INVESTMENTS WHICH IS A FACT AND CAN BE VERIFIED. IN SUPPORT, THE LD. COUNSEL RELIED UPON VARIOUS JUDICIAL DECISIONS FILED IN THE FORM OF PAPER BOOK. 10. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDERS OF THE REVENUE A UTHORITIES AND IN SUPPORT RELIED UPON THE DECISION OF THE TRIBUNAL, MUMBAI BENCH IN THE CASE OF HDFC BANK LTD. VIDE ITA NO. 3465 AND 4367/M/2012. 11. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS AN UNDISPUTED FACT THAT AT THE REQUEST OF THE AO, THE ASSESSEE COMPUTED THE DISALLOWANCE AS PER THE FORMULA GIVEN IN RULE 8D BUT IT IS ALSO A FACT THAT THE ASSESSEE HAD AGITATED THE ADDI TION BEFORE THE FIRST APPELLATE AUTHORITY. IN OUR CONSIDERED VIEW, THE CLAIM OF THE ASSESSEE CANNOT BE BRUSHED ASIDE LIGHTLY. WE, THEREFORE, RESTORE THIS ISSUE TO THE FILE OF THE AO. THE AO IS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE THAT ASSESSS OWN FUNDS ARE MUCH MORE THAN THE FUNDS DEPLOYED IN PURCHASE OF SHARES. THE AO SHALL DECIDE THIS ISSUE AFRESH AFTER GIVING REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA. NO. 1824/M/2013 4 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWE D IN PART FOR STATISTICAL PURPOSE. OR DER PRONOUNCED IN THE OPEN COURT ON 20 TH MAY , 2015 SD/ - SD/ - ( JOGINDER SING ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 20 TH MAY , 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI