District Co-operatove Bank Ltd., Meerut V. ACIT, Najibabad

ITA 2438/DEL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6458 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 03-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MUNSHI RAM BIHAGRA SENIOR
• Assessee Lawyers: P S KASHYAP
• Keywords: Bonafide mistake

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCHES (CAMP AT MEERUT) BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.2438/DEL./2016 (ASSESSMENT YEAR : 2011-12) DISTRICT COOPERATIVE BANK LIMITED, VS. ACIT, C/O M/S. KASHYAP & CO., NAJIBABAD. 214, CITI CENTRE, BEGUM BRIDGE ROAD, MEERUT. (PAN : AABFD2205R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.S. KASHYAP, ADVOCATE REVENUE BY : SHRI MUNSHI RAM BIHAGRA, SENIOR DR DATE OF HEARING : 07.01.2019 DATE OF ORDER : 16.01.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, DISTRICT COOPERATIVE BANK LIMITED (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILI NG THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATE D 09.02.2016 PASSED BY LD. CIT (APPEALS), MORADABAD QUA THE ASS ESSMENT YEAR 2011-12 ON THE GROUNDS INTER ALIA THAT :- 1. THAT ON FACTS AND IN LAW ADDITION OF RS.3,06,20 0/- MADE ON ACCOUNT OF DIVIDEND RECEIVED FROM OTHER CO-OPERATIVE SOCIET IES IS TOTALLY WRONG, UNJUSTIFIED & ILLEGAL. ASSESSEE HAS RECEIVED DIVID END FORM OTHER CO-OPERATIVE SOCIETIES NAMELY KRIBCO & INDIAN FARMERS FERTILIZER S CO-OPERATIVE LTD. (IFFCO) AND THE SAME HAS BEEN CLAIMED TO BE EXEMPT FROM TAX ON THE BASIS OF ITA NO.2438/DEL./2016 2 PRINCIPLE OF MUTUALITY. THEREFORE, THE BASIS TAKEN BY LD. CIT FOR CONFIRMING ADDITION OF RS.3,06,200/- IS TOTALLY WRONG, UNJUSTI FIED AND UNWARRANTED. 2. THAT ON FACTS AND IN LAW ADDITION OF RS.76,000/- ON ACCOUNT OF EXPENSES PERTAINING TO PREVIOUS YEAR IS TOTALLY WRO NG, UNJUSTIFIED & ILLEGAL. ASSESSEE HAS PAID SUM OF RS.76,000/- FOR EXPENSES C RYSTALLIZED DURING THE YEAR. THEREFORE, THE BASIS TAKEN BY LD. CIT FOR CONFIRMIN G ADDITION OF RS.76,000/- IS TOTALLY WRONG, UNJUSTIFIED AND UNWARRANTED. 3. THAT ON FACTS AND IN LAW ADDITION OF RS.19,20,99 9/- ON ACCOUNT OF INTEREST REVERSED. THEREFORE, THE BASIS TAKEN BY L D. CIT FOR CONFIRMING ADDITION OF RS.19,20,999/- IS TOTALLY WRONG, UNJUST IFIED AND UNWARRANTED. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : THE TAX AUDITOR IN ITS RE PORT NOTICED PREVIOUS YEAR EXPENSES AMOUNTING TO RS.76,000/-, WH ICH THE ASSESSING OFFICER SOUGHT TO ADD BACK TO THE INCOME OF THE ASSESSEE. ASSESSEE WHILE FURNISHING THE BREAK-UP OF THE SAME BROUGHT ON RECORD THAT AMOUNT OF RS.28,500/-, RS.3,900/- & RS. 43,600/- WAS INCURRED ON GENERATOR RENT OF MORENA EXTENSION, BUI LDING RENT OF SWAHERI AND BUILDING RENT OF JHALU RESPECTIVELY. A O MADE DISALLOWANCE OF RS.76,000/- ON THE GROUND THAT SINC E THE EXPENSES PERTAINED TO PREVIOUS YEARS, THE SAME ARE NOT ALLOW ABLE ONE. AO MADE FURTHER ADDITION OF RS.19,20,999/- ON ACCOUNT OF INTEREST REVERSED BY THE ASSESSEE ON THE GROUND THAT THE SAM E PERTAINS TO EARLIER YEAR AND AS SUCH, THE INCOME OF THE EARLIER YEARS IS DERECOGNIZED IN THE SUBSEQUENT YEARS. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS DISMISSED THE APPEAL. FEELING AGGRIEVED, THE ITA NO.2438/DEL./2016 3 ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. GROUND NO.1 5. GROUND NO.1 IS DISMISSED HAVING NOT BEEN PRESSED DU RING THE COURSE OF ARGUMENTS. GROUND NO.2 6. OUT OF THE ADDITION OF RS.76,000/-, THE ASSESSEE CLAIMED TO HAVE PAID A SUM OF RS.28,500/- AS RENT FOR THE PERI OD JANUARY TO MARCH, 2010 FOR MORENA BRANCH, RS.3,900/- FOR SWAH ERI BRANCH FOR THE MONTH OF MARCH 2010 AND RS.43,600/- AS ENHA NCED RENT FOR JHALU BRANCH FOR THE LAST FIVE YEARS ON SETTLEMENT OF DISPUTE AND DIFFERENCE OF THE ENHANCED RENT WAS PAID DURING THE YEAR UNDER ASSESSMENT. 7. LD. AR FOR THE ASSESSEE CONTENDED THAT THE AMOUN T OF RS.43,600/- ON ACCOUNT OF ENHANCED RENT @ 20% FOR L AST FIVE YEARS WHICH WAS AGREED TO BE PAID DURING THE YEAR UNDER A SSESSMENT. IT IS THE CASE OF THE ASSESSEE THAT RENT AGREEMENT SHO WING ENHANCEMENT OF RENT WAS FURNISHED BUT NOT TAKEN INT O ACCOUNT BY ITA NO.2438/DEL./2016 4 THE AO. WE ARE OF THE CONSIDERED VIEW THAT WHEN TH E AMOUNT OF RS.76,000/- HAS BEEN PAID BEING RENT FOR JANUARY TO MARCH 2010 FOR MORENA BRANCH, RS.3,9000/- FOR SWAHERI BRANCH AND R S.43,600/- FOR ENHANCED RENT FOR JHALU BRANCH ON SETTLEMENT OF DUES, THE SAME ARE ALLOWABLE EXPENDITURE AS THE AO HAS NOT DISPUTE THE INCURRENCE OF THE EXPENSES TO RUN THE BUSINESS OF THE BANK. S O, WHEN PAYMENT OF RENT IS NOT DISPUTED WHICH WAS STATED TO BE PAID IN THE NEXT MONTH DUE TO NEGLIGENCE, THE SAME CANNOT BE DISALLO WED. SO, THE AO IS DIRECTED TO ALLOW THE SAME AFTER VERIFICATION OF THE RENT AGREEMENT AS TO THE ENHANCEMENT OF THE AMOUNT FOR T HE LAST FIVE YEARS PAID DURING THE YEAR UNDER ASSESSMENT AFTER S ETTLEMENT. GROUND NO.3 8. THE ADDITION OF RS.19,20,999/- HAS BEEN MADE BY THE AO ON ACCOUNT OF INTEREST REVERSED PERTAINING TO PREVIOUS YEAR. IT IS THE ADMITTED CASE OF THE ASSESSEE THAT THE AMOUNT OF RS .19,20,999/- HAS BEEN SHOWN IN THE ACCOUNT BOOKS ON ACCOUNT OF INTER EST CHARGED BUT SUBSEQUENTLY IT CAME TO THE NOTICE THAT IT WAS WRON GLY CHARGED AND CONSEQUENTLY THE SAME WAS REVERSED ON 07.05.2010. WHEN IT IS UNDISPUTED CASE OF THE ASSESSEE AS PER BOOKS OF ACC OUNT THAT THE INTEREST OF RS.19,20,999/- HAS BEEN EXTRA CHARGED O N LOAN IN KIRATPUR BRANCH ON 31.03.2010, BUT THE SAID MISTAKE OF FACT HAS ITA NO.2438/DEL./2016 5 BEEN RECTIFIED BY THE ASSESSEE BY MAKING REVERSE EN TRIES, AO AS WELL AS LD. CIT (A) HAVE MADE ADDITION ON THE GROUN D THAT THIS CLAIM TANTAMOUNT TO EARLIER YEARS WITHOUT GOING INT O THE FACT THAT IT WAS DUE TO BONAFIDE MISTAKE. WHEN UNDISPUTEDLY, TH ERE IS NO INCOME TO THE ASSESSEE ON ACCOUNT OF EXTRA CHARGE O F THE INTEREST ON LOAN IN KIRATPUR BRANCH HOW THE SAME AMOUNT CAN BE ASSESSED TO INCOME AND AS SUCH, ADDITION OF RS.19,20,999/- ON A CCOUNT OF INTEREST REVERSED IS NOT SUSTAINABLE, HENCE ORDERED TO BE DELETED. SO, GROUND NO.3 IS DETERMINED IN FAVOUR OF THE ASSE SSEE. 9. RESULTANT, THE APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 16 TH DAY OF JANUARY, 2019. SD/- SD/- (N.S. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 16 TH DAY OF JANUARY , 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MORADABAD. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.