The Nashik Merchants Co-Op Bank Ltd, Nashik V. Assistant Commissioner of Income-tax, Circle - 1, Nashik

ITA 2059/PUN/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4004 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 31-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Assessee Lawyers: P S SHINGTE
• Keywords: Bad and doubtful debts

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI D. KARUNAKARA RAO, AM SHRI S.S. VISWANETHRA RAVI, JM . / ITA NO.2059/PUN/2017 / ASSESSMENT YEAR : 2013-14 THE NASHIK MERCHANTS CO - OPERATIVE BANK LTD., A-16, ADMINISTRATIVE OFFICE, LT. BABUBHAI RATHI CHOWK, SATPUR, NASHIK 422 007. PAN : AAAAT3324K. . / APPELLANT. V/S THE ASST.COMMISSIONER OF INCOME TAX, CIRCLE 1, NASHIK. . / RESPONDENT ASSESSEE BY : SHRI P.S. SHINGTE. REVENUE BY : SHRI PANKAJ GARG. / DATE OF HEARING : 07-11-2019 / DATE OF PRONOUNCEMENT : 08-11-2019 / ORDER PER S.S. VISWANETHRA RAVI, JM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER DA TED 02.06.2017 PASSED BY CIT(A)-I, NASHIK FOR A.Y. 2013-14. 2. GROUND NO.1 RAISED BY THE ASSESSEE CHALLENGING THE AC TION OF CIT(A) IN CONFIRMING THE ADDITION MADE BY THE AO ON ACCOUNT OF BAD AND DOUBTFUL DEBTS U/S 36(1)(VIIA) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2 3. SHRI P.S. SHINGTE, THE LD.A.R. PLACED ON RECORD ORDER DAT ED 25.09.2018 IN ASSESSEES OWN CASE FOR A.Y. 2012-13 AND S UBMITTED THE ISSUE RAISED IN GROUND NO.1 IS COVERED AND THIS TRIBUNAL DE CIDED SIMILAR ISSUE AND REMANDED TO THE FILE OF AO FOR VERIFICATION. FURTHER, HE SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISION O F HONBLE HIGH COURT OF DELHI IN THE CASE OF JAIN CO-OPERATIVE BANK LIMITE D AND REFERRED TO PAGE NO.10 OF THE PAPER BOOK. THE LD. D.R. S HRI PANKAJ GARG DID NOT CONTROVERT THE SAME. 4. HEARD BOTH PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMED DEDUCTION OF RS.1,27,19,962/- ON ACCOU NT OF NPA WRITE OFF OF PRINCIPAL AGAINST THE PROVISIONS MADE UNDE R THE HEAD OF BAD & DOUBTFUL DEBTS. THE MAKING OF PROVISION IS REFLECTED IN PROFIT AND LOSS ACCOUNT UNDER SCHEDULE17 TO AN EXTENT OF RS.1 0,45,82,151/- OUT OF WHICH A PROVISION MADE OUT FOR BAD AND DOUBTFUL DEB TS FOR RS.9,18,04,101/- IN THE COMPUTATION OF INCOME AT PAGE 20 OF PAPER BOOK. WE FIND THAT FOR A.Y. 2012-13 IN ASSESSEES OWN CAS E, THIS TRIBUNAL REMANDED THE ISSUE TO THE FILE OF AO FOR HIS CONSIDE RATION FOR A LIMITED PURPOSE FOR VERIFICATION OF DETAILS. THE CO-ORDINAT E BENCH OF THE TRIBUNAL OPINED THAT THE RATIO LAID DOWN BY THE HONB LE HIGH COURT OF DELHI IN THE CASE OF JAIN CO-OPERATIVE BANK LTD., (SUPRA) W HICH HELD THAT WHENEVER THE BANK WRITES OFF AN AMOUNT IS ENTITLED T O GET DEDUCTION U/S 36(1)(VIIA) OF THE ACT, FURTHER, THE SAID AMOUNT IS TAXABLE AT THE TIME OF RECOVERY. THE PROVISIONS OF (VIIA)A TO SUB-CLA USE 1 OF SECTION 36 OF THE ACT EXPLAINS THAT THE DEDUCTION IS AVAILA BLE IN RESPECT OF ANY PROVISIONS FOR BAD AND DOUBTFUL DEBTS MADE BY A CO -OPERATIVE BANK. THEREFORE, WE ARE OF THE OPINION THAT THE ISSUE IS S ETTLED BY THE 3 DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF JA IN CO- OPERATIVE BANK LTD., (SUPRA), WE HOLD THAT THE ASSESSEE IS ENTITLED TO GET DEDUCTION U/S 36(1)(VIIA)(A) OF THE ACT. THE IMPUGNED ORDE R OF CIT(A) IS JUSTIFIED. THUS, GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED . 5. GROUND NO.2 IS RELATING TO CONFIRMATION OF ADDITION MADE O N ACCOUNT OF CLAIM OF BONUS IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. HEARD BOTH PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT ASSESSEE CLAIMED TO HAVE PAID AN AMOUNT OF RS.82,25,500/- UNDER THE HEAD BONUS TO ITS EMPLOYEES B EFORE THE DUE DATE FOR FILING OF RETURN OF INCOME AND THE DETAILS OF WHICH A RE PLACED ON RECORD AT PAGE NOS.22 AND 24 WHEREIN WE FIND THE ASS ESSEE PAID RS.81,87,098/- (RS.78,88,109/- AND RS.2,98,989/- ON 23.09.2013 AND 25.09.2013) RESPECTIVELY AS AGAINST THE ABOVE CLAIMED AMOU NT. WE HOLD THAT THE ASSESSEE IS ENTITLED TO GET ALLOWANCE TO AN EXTENT OF RS.81,87,098/-. THE FACT REMAINS ADMITTED THE INFORMATION PROVIDED UNDER PAGE NOS.22 AND 24 OF THE ACT WERE NOT BEFORE THE AO DURING T HE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE LD.A.R. AND LD. D.R. WE D EEM IT PROPER TO REMAND THE MATTER TO THE FILE OF AO FOR HIS FRES H CONSIDERATION FOR VERIFICATION OF DETAILS. THUS, GROUND NO.2 R AISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED ON 8 TH DAY OF NOVEMBER, 2019. SD/- SD/- ( D. KARNUKARA RAO) (S.S. VISWA NETHRA RAVI) ACCOUNTANT MEMBER JUD ICIAL MEMBER PUNE; DATED : 8 TH NOVEMBER, 2019. YAMINI # $%&' (' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. 6. CIT(A)-1, NASHIK. PR.CIT-1, NASHIK. '#$ %%&',) &', / DR, ITAT, B PUNE; $,-./ GUARD FILE. / BY ORDER , // / TRUE COPY / / // TRUE COPY // /01%2&3 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.