Saraswati Sahakari Bank Ltd., Nashik V. Deputy Commissioner of Income-tax,

ITA 2403/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9167 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 14-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR VI VEK AG GR AWAL
• Keywords: Capital receipt
• Section: 143(3)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO , AM . / ITA NO. 2 4 03 /P U N/201 6 / ASSESSMENT YEAR : 20 12 - 13 SARASWATI SAHAKARI BANK LTD., NEAR GADAKH BHAWAN, OLD AGRA ROAD, OJHAR (MIG), DIST. NASHIK 422206 . / APPELLANT PAN: A ABAS1365G VS. THE DY. COMMI SSIONER OF INCOME TAX, CIRCLE 1, NASHIK . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : DR. VI VEK AG GR AWAL / DATE OF HEARING : 2 1 . 0 3 .201 8 / DATE OF PRONOUNCEMENT: 23 . 0 3 .201 8 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 1 , NASHIK , DATED 1 1 . 0 8 .20 1 6 RELATING TO ASSESSMENT YEAR 20 12 - 13 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W .S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL: - ITA NO. 2 4 03 /P U N/20 1 6 S ARASWATI SAH. BANK LTD. 2 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED IN MAKING THE ADDITION OF RS.1,81,957/ - BEI NG A SUM RECEIVED ON ACCOUNT OF CONTRIBUTION TO BUILDING FUND, THIS BEING CAPITAL RECEIPT, ENTIRE ADDITION NEEDS TO BE DELETED. FURTHER IT IS SUBMITTED THAT THE ADDITION IS MADE MERELY ON THE BASIS OF ADMISSION MADE BY AUTHORIZED REPRESENTATIVE OF THE APP ELLANT, SUCH ADMISSION SHOULD NOT BE TREATED DECISIVE IF IT IS NOT AS PER THE PROVISIONS OF LAW, APPELLANT PRAYS FOR THE RELIEF ACCORDINGLY. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST ADDITION OF 1,81,957/ - BEING A SUM RECEIVED ON ACCOUN T OF CONTRIBUTION TO BUILDING FUND. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS CO - OPERATIVE SOCIETY REGISTERED UNDER THE MAHARASHTRA STATE CO - OPERATIVE SOCIETIES ACT AND WAS CARRYING ON BANKING BUSINESS. THE ASSESSEE HAD DECLARED INCOME FROM BUSINESS OF BANKING IN THE RETURN OF INCOME. THE ASSESSING OFFICER NOTED VARIOUS ISSUES IN THE HANDS OF ASSESSEE AND ALSO MADE ADDITION ON ACCOUNT OF VARIOUS ISSUES BUT THE ONLY THE ISSUE WHICH IS RAISED BEFORE US IS WITH REGARD TO ADDITION OF 1,81,957/ - AND HENCE, WE DEAL WITH THE FACTS OF THE SAID ISSUE ONLY. THE ASSESSEE HAD RECEIVED CONTRIBUTION TO THE BUILDING FUND OF 1,81,957/ - , WHICH WAS DIRECTLY TRANSFERRED TO THE BALANCE SHEET BY CREDITING THE SAME TO BUILDING FUND ACCOUNT. THE SA ID AMOUNT WAS NOT OFFERED AS INCOME IN THE PROFIT AND LOSS ACCOUNT. THE CLAIM OF ASSESSEE IN THIS REGARD WAS THAT THE BUILDING FUND RECEIVED FROM MEMBERS WAS CAPITAL RECEIPT. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE BUILDING FUND RECEIVED WAS REVEN UE RECEIPT. DURING THE COURSE OF HEARING, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ALSO ACCEPTED THE SAID ADDITION VIDE ORDER SHEET ENTRY DATED 22.01.2015, HENCE THE ADDITION OF 1,81,926/ - . 5. THE CIT(A) CONFIRMED THE SAID ADDITION IN VIEW OF THE ACCEPTANCE OF LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ITA NO. 2 4 03 /P U N/20 1 6 S ARASWATI SAH. BANK LTD. 3 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT PRINCIPALLY THE CONTRIBUTION RECEIVED TO THE CORPUS FUND WAS CAPITAL RECEIPT. DURING THE YEAR, THE CONTRIBUTION WAS TO THE TUNE OF 1,81,957/ - , WHICH THE ASSESSEE POINTED OUT WAS CAPITAL RECEIP T BEFORE THE ASSESSING OFFICER AND EVEN BEFORE CIT(A). HOWEVER, THE ASSESSING OFFICER TAXED THE SAME IN THE HANDS OF ASSESSEE WITHOUT DISPOSING OF THE PLEA OF ASSESSEE ON THE GROUND THAT THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS ACCEPTED THE SAME. HE FURTHER STATED THAT THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF ASSESSING OFFICER AND POINTED OUT THAT THERE WAS NO QUESTION OF ACCEPTANCE AS THE RECEIPT WAS CAPITAL RECEIPT. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE A LSO STATED THAT THE SAME CIT(A) IN ASSESSMENT YEAR 2013 - 14 VIDE ORDER DATED 01.12.2016 HAS ACCEPTED THE PLEA OF ASSESSEE THAT THE CONTRIBUTION TO THE BUILDING FUND IS CAPITAL RECEIPT AND AS SUCH, THE SAME PRINCIPLE BE APPLIED FOR THE YEAR UNDER APPEAL. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HOWEVER, POINTED OUT THAT WHERE THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAD AGREED TO THE SAID ADDITION, THERE WAS NO MERIT IN THE PLEA OF ASSESSEE NOW BEING RAISED. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE LIMITED ISSUE WHICH ARISES IN THE CASE OF ASSESSEE IS THE TAXABILITY OF CONTRIBUTION TO BUILDING FUND, WHICH IS CAPITAL RECEIPT. THE SAID PLEA OF ASSESSEE HAS BEEN ACCEPTED BY THE CIT(A) IN THE APPEAL REL ATING TO ASSESSMENT YEAR ITA NO. 2 4 03 /P U N/20 1 6 S ARASWATI SAH. BANK LTD. 4 2013 - 14 VIDE ORDER DATED 01.12.2016, AGAINST WHICH THE REVENUE IS NOT IN APPEAL. PRINCIPALLY, THE CONTRIBUTION WHICH HAS BEEN RECEIVED BY THE ASSESSEE TO THE CORPUS FUND IS CAPITAL RECEIPT AND IN SUCH CIRCUMSTANCES, THE SAME CANNOT BE BROUGHT TO TAX. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS DID ADMIT TO THE SAID ADDITION BUT BEFORE THE CIT(A), AT THE FIRST INSTANCE, OBJECTIONS WERE RAISED AND GROUND OF APPEAL WAS FILED IN THIS REGARD. WHERE IT IS INCUMBENT UPON THE ASSESSING OFFICER TO ASSESS THE CORRECT INCOME IN THE HANDS OF ASSESSEE I.E. WHAT IS ASSESSABLE UNDER THE PROVISIONS OF THE ACT AND THEN EVEN IF THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE HAS ADMITTED TO THE SAME OR WHERE THE ASSESSEE HAS NOT CORRECTLY CLAIMED ANY DEDUCTION, THEN THE COURTS HAVE TIME AND AGAIN HELD THAT THE ASSESSING OFFICER HAS TO ADJUDICATE THE ISSUE IN LINE WITH THE PROVISIONS OF THE ACT. IN THE PRESENT CASE, THE PRO VISIONS OF THE ACT VERY CLEARLY LA Y DOWN THAT THE CONTRIBUTION TO THE BUILDING FUND BEING CONTRIBUTION TO THE CORPUS FUND , WAS CAPITAL RECEIPT. ACCORDINGLY, WE FIND NO MERIT IN THE ORDERS OF AUTHORITIES BELOW AND THE SAME ARE REVERSED. THE ASSESSING OFFI CER IS DIRECTED TO DELETE THE ADDITION OF 1,81,957/ - . THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS, ALLOWED. 10 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 23 RD DAY OF MARCH , 201 8 . SD/ - SD/ - ( D.KARUNAKARA RAO ) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 23 RD MARCH , 201 8 . GCVSR ITA NO. 2 4 03 /P U N/20 1 6 S ARASWATI SAH. BANK LTD. 5 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 1 , NASHIK ; 4. THE PR. CIT - 1 , NASHIK ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE