Latur District Central Co.op Bank Ltd., Latur V. Assistant Commissioner of Income-tax,

ITA 2163/PUN/2013

• Counselvise Citation: 216324514 RSA 2013
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 13-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS M S VERMA
• Keywords: Bad and doubtful debts

Judgement Text

INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 2163/PN/2013 (ASSESSMENT YEAR : 2010-11) LATUR DISTRICT CENTRAL COOPERATIVE BANK LTD., LATUR LDCC BANK BUILDING, YESHWANTRAO CHAVAN MARG, TILAK NAGAR, LATUR DISTRICT LATUR-413512 PAN NO.AAAAL0225H .. APPELLANT VS. ACIT, CIRCLE-3, NANDED .. RESPONDENT ASSESSEE BY : SHRI SUNIL GANOO DEPARTMENT BY : MRS. M.S. VERMA DATE OF HEARING : 29-10-2014 DATE OF PRONOUNCEMENT : 30-10-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31-10-2013 OF THE CIT(A), AURANGABAD RELATING TO ASSESSMENT YEAR 2010-11. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T.[A] HAS ERRED IN RESTRICTING THE CLAIM OF DEDUCTION MADE BY THE APPELLANT U/S 36[1][VIIA] OF THE I.T. ACT 1961 TO RS.2,88,35,594.00 AS AGAINST AN AMOUNT OF RS. 17,43,71,387.00 CLAIMED BY THE APPELLANT IN THE RETURN OF INCOME. IT MAY PLEASE BE HELD THAT THE CORRECT AMOUNT OF DEDUCTION U/S 36[I][VIIA] OF THE I.T. ACT 1961 WORKS OUT TO RS.17,43,71,387.00 [SUBJECT TO CHANGE ON ACCOUNT OF TOTAL INCOME AS 2 DEFINED IN THE SAID SECTION] AND THE SAME MAY PLEASE BE ALLOWED TO THE APPELLANT. 2. IT MAY PLEASE BE HELD THAT FOR CLAIMING THE DEDUCTION U/S 36[1][VIIA] OF THE I.T. ACT 1961, IT IS NOT NECESSARY THAT THE AMOUNT OF PROVISION SHOULD BE DEBITED TO THE PROFIT AND LOSS ACCOUNT OF THE RELEVANT PREVIOUS YEAR, AND THE CLAIM CAN BE MADE IN COMPUTATION OF INCOME BY MAKING A CLAIM IN TAX BOOK. IN THE CIRCUMSTANCES THE DEDUCTION OF RS.17,43,71,387.00 AS CLAIMED BY THE APPELLANT U/S 36[1][VIIA] OF THE I.T. ACT 1961 MAY PLEASE BE ALLOWED TO THE APPELLANT AS PER THE FORMULA PRESCRIBED IN THE SAID SECTION. 3. IT MAY PLEASE BE HELD THAT FOR CLAIMING THE DEDUCTION U/S 36[1][VIIA] OF THE I.T. ACT 1961, IT IS NOT NECESSARY THAT THE PROVISION SHOULD BE DEBITED TO THE PROFIT AND LOSS ACCOUNT OF THE RELEVANT PREVIOUS YEAR, AND THE CLAIM IS ALLOWABLE PROVIDED THE TOTAL AMOUNT OF PROVISION FOR BAD AND DOUBTFUL DEBTS AS APPEARING IN THE BALANCE SHEET AS OF THE LAST DATE OF THE RELEVANT PREVIOUS YEAR IS MORE THAN THE PROVISION AS WORKED OUT AS PER FORMULA PRESCRIBED U/S 36[1][VIIA] OF THE I.T. ACT 1961. IN THE CIRCUMSTANCES THE DEDUCTION OF RS.17,43,71,387.00 AS CLAIMED BY THE APPELLANT U/S 36[1][VIIA] OF THE I.T. ACT 1961 MAY PLEASE BE ALLOWED TO THE APPELLANT AS PER THE FORMULA PRESCRIBED IN THE SAID SECTION. 4. WITHOUT PREJUDICE TO ABOVE GROUNDS OF APPEAL AND BY WAY OF AN ALTERNATE SUBMISSION THE APPELLANT SUBMITS THAT THE APPELLANT MAY PLEASE BE ALLOWED TO MAKE A PROVISION OF THE ALLEGED SHORT FALL OF RS. 14,55,35,793.00 IN THE CURRENT YEAR AND THE DEDUCTION OF RS.17,43,71,387.00 AS CLAIMED BY THE APPELLANT U/S 36[1][VIIA] OF THE I.T. ACT 1961 MAY PLEASE BE ALLOWED TO THE APPELLANT AS PER THE FORMULA PRESCRIBED IN THE SAID SECTION. 5. WITHOUT PREJUDICE TO ABOVE GROUNDS OF APPEAL AND BY WAY OF AN ALTERNATE SUBMISSION THE APPELLANT SUBMITS THAT THE DEDUCTION U/S 36[1][VIIA] OF THE I.T. ACT 1961 MAY PLEASE BE ALLOWED TO THE APPELLANT AFTER TAKING IN TO ACCOUNT AN AMOUNT OF RS.4,03,000.00 BEING THE PROVISION ON STANDARD ASSETS DEBITED TO THE PROFIT AND LOSS ACCOUNT WHICH CONSTITUTES PROVISION FOR BAD AND DOUBTFUL DEBTS. 6. THE APPELLANT CRAVES THE PERMISSION TO ADD, AMEND, MODIFY, ALTER, REVISE, SUBSTITUTE, DELETE ANY OR ALL GROUNDS OF APPEAL, IF DEEMED NECESSARY AT THE TIME OF HEARING OF THE APPEAL. 3 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS ING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE BANK HAS CLAIMED DEDUCTIO N U/S.36(1)(VIIA) OF RS.17,43,71,387/-. HOWEVER, THE ASSESSEE HAS MADE PROVISION OF RS.2,88,35,594/- ONL Y IN ITS BOOKS OF ACCOUNT. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND RELYING ON T HE PROVISION OF SECTION 36(1)(VIIA) WHICH HAS BEEN INS ERTED IN THE FINANCE ACT, 1979, THE ASSESSING OFFICER RESTRICTED SUCH DISALLOWANCE TO RS.2,88,35,594/- ON LY AND MADE ADDITION OF RS.14,55,35,793/-. IN APPEAL THE LD.CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICE R. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET FILED A COPY OF THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI MAHALAXMI COOPERATIVE BANK LTD., VS. ITO, WARD - 1(1), KOLHAPUR VIDE ITA NO.1658/PN/2011 ORDER DATED 29-10-2013 FOR A.Y. 2008-09 AND SUBMITTED THAT THE ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE WHEREIN IT HAS BEEN HELD THAT ONLY THE AMOUNT OF PROVISION MAD E IN THE BOOKS OF ACCOUNT WILL BE ALLOWED AS DEDUCTIO N U/S.36(1)(VIIA) OF THE I.T. ACT. 6. IN VIEW OF THE ABOVE SUBMISSION MADE BY THE LD. COUNSEL FOR THE ASSESSEE AND IN ABSENCE OF ANY OBJECTION BY THE LD. DEPARTMENTAL REPRESENTATIVE, T HE 4 ORDER OF THE CIT(A) ON THIS ISSUE IS UPHELD AND THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 30-10-2014. SD/- SD/- (R.S. PADVEKAR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 30 TH OCTOBER, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A), AURANGABAD 4. CIT, AURANGABAD 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR, ITAT, PUNE BENCHES, PUNE