The Kalupur Commercial Co.Op.Bank Ltd., Ahmedabad V. The Addl.CIT.,Range-7, Ahmedabad

ITA 2614/AHD/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0875 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 20-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RICHA RASTOGI
• Assessee Lawyers: S N SOPARKAR
• Keywords: Gift; Depreciation; Business expenditure; Revised return; Revenue expenditure
• Section: 143(3); 37

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO. 2614/AHD/2011 / ASSESSMENT YEAR : 2008-09 THE KALUPUR COMMERCIAL CO-OP. BANK LTD., KALUPUR BANK BHAVAN, NR. INCOME TAX, ASHRAM ROAD, AHMEDABAD PAN : AAAAT 9360 R VS THE ACIT, RANGE-7, AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.N. SOPARKAR, AR REVENUE BY : MS. RICHA RASTOGI, SR DR / DATE OF HEARING : 02/08/2016 / DATE OF PRONOUNCEMENT: 17/08/2016 / O R D E R PER AMARJIT SINGH, ACCOUNTANT MEMBER :- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD DATED 16.09.2011 FOR ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL READ AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XI V, AHMEDABAD HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN FRAMI NG APPELLATE ORDER U/S 250 OF THE I.T. ACT FOR 2008-09 ON 16 TH SEPTEMBER 2011. 2. THE LEARNED CIT(A)-XIV, AHMEDABAD HAS ERRED IN CONFI RMING THE FOLLOWING ADDITIONS MADE BY ASSESSING OFFICER. SR. NO. NATURE OF DISALLOWANCE AMOUNT (A) SCHOLARSHIP TO STUDENTS RS. 5,05,741 (B) PAYMENT TO LEGAL HEIRS OF MEMBERS RS. 19,95,00 0 (C) GIFTS TO MEMBERS RS. 82,10,889 TOTAL RS.1,07,11,630 ITA NO. 2614/AHD/2011 THE KALUPUR COMMERCIAL CO-OP BANK LTD VS. ACIT AY : 2008-09 2 3. THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ADDITI ON OF RS.2,25,617/- MADE ON THE BASIS OF AIR DATA. 4. THE LEARNED CIT(A) HAS ERRED IN NOT ADJUDICATING UP ON GROUND RELATING TO INITIATION OF PENALTY PROCEEDING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A CO-OPERATIVE BANK WHICH FILED ITS ORIGINAL RETURN OF INCOME FOR THE Y EAR UNDER CONSIDERATION ON 29.09.2008 DECLARING TOTAL INCOME AT RS.35,17,13,88 0/-. THEREAFTER, A REVISED RETURN WAS FILED ON 08.05.2009 DECLARING TOTAL INCO ME AT RS.34,57,36,040/-, WHICH WAS CONSEQUENT TO CHANGE OF DEPRECIATION. SU BSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY THROUGH CASS AND THE ASSESSMENT WAS FRAMED U/S 143(3) OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT) VIDE ORDER DATED 28.12.2010. WHILE F RAMING THE ASSESSMENT, THE ASSESSING OFFICER MADE VARIOUS ADDITIONS UNDER THE FOLLOWING HEADS:- I) SCHOLARSHIP OF STUDENTS - RS. 5,05,741/- II) PAYMENT TO LEGAL HEIRS OF MEMBERS - RS.19,95,000/- III) GIFTS TO MEMBERS - RS.82,10,889/- IV) INTEREST OTHER THAN SECURITIES AS - RS. 2,25,617/ - PER AIR INFORMATION THE LD. CIT(A) VIDE ORDER DATED 16.09.2011 SUSTAIN ED THE ADDITIONS MADE BY THE ASSESSING OFFICER UNDER ABOVE VARIOUS S UB-HEADS AS MENTIONED ABOVE. 3.1 AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE A SSESSEE IN NOW IN APPEAL BEFORE US. 4 FIRST GROUND OF ASSESSEES APPEAL IS GENERAL IN N ATURE. 5. SECOND GROUND RELATES TO THE DISALLOWANCE OF BUS INESS EXPENDITURE OF RS.1,07,11,630/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE EXPLAINED TO THE ASSESSING OFFICER THAT THESE GIFTS WERE PROVIDED TO THE MEMBERS ON THE BASIS OF NUMBER OF COUPONS AND HOLDI NG OF SHARES TO MAINTAIN CORDIAL AND LONG RELATIONSHIP WITH MEMBERS . ASSESSEE HAS FURTHER ITA NO. 2614/AHD/2011 THE KALUPUR COMMERCIAL CO-OP BANK LTD VS. ACIT AY : 2008-09 3 STATED THAT THESE KINDS OF GESTURE CERTAINLY HELP T HE BANK IN PROMOTING AND ENHANCING BANKING SERVICES WHICH WAS IN THE NATURE OF BUSINESS EXPEDIENCY. THE ASSESSEE ALSO RELIED ON VARIOUS JU DICIAL JUDGMENTS. THE ASSESSING OFFICER STATED THAT THESE EXPENDITURES AP PEARED TO BE INCURRED FOR THE BENEFIT OF MEMBERS OF THE BANK AND NOT PRIMA FA CIE ATTRIBUTABLE TO THE BUSINESS OF BANKING OF THE ASSESSEE AND ACCORDINGLY MADE THE ADDITION IN QUESTION. V) SCHOLARSHIP OF STUDENTS - RS. 5,05,741/- VI) PAYMENT TO LEGAL HEIRS OF MEMBERS - RS.19,95,000/- VII) GIFTS TO MEMBERS - RS.82,10,889/- ------------------- TOTAL RS.1,07,11,630/- AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A) WHO, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CONFIRMED THESE ADDITIONS MADE BY THE LD. AO, BY OBSERVING AS UNDER:- I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER A ND THE SUBMISSION FILED BY THE APPELLANT. THE A. O. HAS DISALLOWED THE EXPENDIT URE TREATING THE SAME FOR NON BUSINESS PURPOSE. IT HAS BEEN HELD BY HIM THAT THE EXPENDITURE WAS FOR THE BENEFIT OF THE MEMBERS OF THE BANK AND WAS OF G RATUITOUS NATURE RATHER THAN REFLECTING BUSINESS EXPEDIENCY. THE APPELLANT HAS SUBMITTED THAT THE EXPENDITURE HAS BEEN INCURRED WHOLLY AND EXCLUSIVEL Y FOR BANKING BUSINESS ONLY. THE MAIN RECEIPT OF THE APPELLANT BEING A COM MERCIAL CO-OPERATIVE BANK WAS THAT OF RECEIPT OF INTEREST REALIZED ON ADVANCE S MADE BY BANK. THE PRINCIPAL SOURCE OF RECURRING INCOME IS THAT FROM M EMBERS AND, THEREFORE, KEEPING ALL MEMBERS IN GOOD HUMOUR IS WHOLLY, EXCLU SIVELY AND NECESSARILY FOR THE PURPOSE OF BUSINESS. DURING THE COURSE OF A PPELLATE PROCEEDINGS, THE APPELLANT WAS ALSO ASKED TO EXPLAIN THE SCHEME OF G IFT COUPONS AND ALSO THE ACCOUNTING TREATMENT OF THE FUNDS UTILISED FOR GIFT . THE APPELLANT HAS SUBMITTED THAT GIFT COUPONS ARE ISSUED ON THE BASIS OF MEMBERSHIP I.E. ONE COUPON IS GIVEN TO EACH MEMBER IRRESPECTIVE OF SHAR ES HELD BY MEMBERS. THE VALUE OF THE ONE COUPON DID NOT EXCEED RS.250/- TO RS.300/-. THE GIFTS WERE GIVEN BETWEEN TWO THREE YEARS TO MEMBERS SO THAT TH EY CONTINUE TO PLACE DEPOSIT WITH THE APPELLANT BANK ONLY. THE APPELLANT HAS ALSO RELIED ON THE DECISION OF HIGH COURT OF GUJARAT IN THE CASE OF KA RZAN CO-OPERATIVE COTTON SALES GINNING AND PROCESSING SOCIETY VS. CIT [199 I TR 17, GUJARAT]. REGARDING THE ACCOUNTING TREATMENT, IT WAS EXPLAINE D BY THE APPELLANT THAT EVERY YEAR, CERTAIN PROVISION IS MADE FROM THE PROF IT OF THE COMPANY BY SETTING ASIDE 5% OF THE PROFIT TO THE MEMBER / CUST OMER INCENTIVE FUND. THIS ITA NO. 2614/AHD/2011 THE KALUPUR COMMERCIAL CO-OP BANK LTD VS. ACIT AY : 2008-09 4 ADJUSTMENT IS IN THE NATURE OF APPROPRIATION OF THE PROFIT AND IS DONE BELOW THE PROFIT AND LOSS ACCOUNT. WHENEVER, SOME GIFT OR ANY EXPENDITURE IS MADE FROM THIS FUND, THE SAME IS CLAIMED AS DEDUCTION OU T OF THE TAXABLE INCOME FOR THE YEAR IN THE STATEMENT OF INCOME FILED WITH THE RETURN. IN THE PRESENT YEAR ALSO, THE EXPENDITURE OF RS.1,07,11,630/- HAS BEEN REDUCED FROM THE PROVISION BUT HAS BEEN CLAIMED AS REVENUE EXPENDITURE U/S. 37 (1) OF THE ACT FROM THE TAXABLE INCOME OF THE PRESENT YEAR. AFTER CONSIDERING ALL THE FACTS, I AM OF THE OPINIO N THAT THE EXPENDITURE IS IN THE NATURE OF APPLICATION OF PROF IT BY THE APPELLANT. THE ACCOUNTING ENTRY OF MAKING THE PROVISION OUT OF THE TAXABLE PROFIT EVERY YEAR AND SPENDING THE MONEY FROM THAT RESERVE FOR THIS K IND OF EXPENDITURE IS AN ACT WHICH CONFIRMS THAT THE EXPENDITURE IS IN THE N ATURE OF APPROPRIATION OF PROFIT. THE EXPENDITURES OF GIVING SCHOLARSHIP TO T HE STUDENTS BELONGING TO THE FAMILY OF THE MEMBERS, PAYMENT TO LEGAL HEIRS O F THE MEMBERS ON THE DEMISE OF THE MEMBERS AND GIFT TO MEMBERS AFTER REG ULAR INTERVAL IS NOTHING BUT DISTRIBUTION OF PROFIT TO THE MEMBERS WHO ARE I N FACT THE SHAREHOLDERS IN THE BANK. THE CLAIM OF THE APPELLANT THAT THIS HAS BEEN DONE TO KEEP THE MEMBERS IN GOOD HUMOUR AND, THEREFORE, IT SHOULD BE ALLOWED AS AN EXPENDITURE IS NOT ACCEPTABLE AS THE ACCOUNTING TRE ATMENT CLEARLY SHOW THAT IT IS AN APPROPRIATION OF PROFIT. THE JUDGMENT OF HON' BLE GUJARAT HIGH COURT MENTIONED BY THE APPELLANT HAS BEEN CAREFULLY PERUS ED BY ME. THE FACTS OF THE CASE ARE DIFFERENT AS IN THAT CASE THE BANK HAD DIS TRIBUTED MEMENTO ON THE OCCASION OF SILVER JUBILEE TO THE MEMBERS. BUT IN T HE PRESENT CASE, IT IS A REGULAR PRACTICE OF THE BANK TO DISTRIBUTE THE GIFT S AT THE INTERVAL OF TWO TO THREE YEARS. THIS ACT IS NOTHING BUT DISTRIBUTION O F PROFIT TO THE SHAREHOLDERS OF THE BANK. ACCORDINGLY, THE DISALLOWANCE MADE BY T HE A. O. IS UPHELD AND THE GROUND OF APPEAL IS DISMISSED. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSE SSEE IS FURTHER APPEAL BEFORE US. 5.1 LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT SCH OLARSHIPS WERE PROVIDED TO THE CHILDREN OF THE MEMBERS WITH THE OB JECT OF ENSURING GOOD EDUCATION ON CLEARING OF EXAMS OF VARIOUS BOARDS/UN IVERSITIES AND PROFESSIONAL EXAMS. HE ALSO POINTED OUT THAT PAYM ENT OF RS.19,95,000/- TO LEGAL HEIRS OF MEMBERS WERE PROVIDED ON THE BASIS O F PROCEDURE LAID DOWN FOR GIVING ONE TIME PAYMENT OF RS.10,000/- TO THE F AMILY MEMBERS EXPIRED DURING THE PREVIOUS YEARS. HE FURTHER STATED THAT GIFTS TO THE MEMBERS FOR RS.82,10,889/- WERE PROVIDED IN ORDER TO MAINTAIN C ORDIAL AND LONG RELATIONSHIP WITH MEMBERS WHO WERE ALSO CUSTOMERS O F THE BANK. HE ITA NO. 2614/AHD/2011 THE KALUPUR COMMERCIAL CO-OP BANK LTD VS. ACIT AY : 2008-09 5 REFERRED TO VARIOUS PARA OF THE DETAILS FURNISHED T O THE ASSESSING OFFICER MENTIONED IN THE PAPER-BOOK FILED. THE SCHOLARSHIP TO STUDENT IS PROVIDED TO PROMOTE THE EDUCATION AND TO INSPIRE STUDENTS TO SECURE MORE MARKS AND THE AMOUNT OF SCHOLARSHIP PER STUDENT VARY FROM RS .1001/- TO RS.3501/-. MORE THAN 95% BUSINESS OF ADVANCES/DEPOSITS ETC IS THROUGH MEMBERS ONLY AND NATURE OF GIFTS WHICH HARDLY COST TO RS.250 TO RS.300/- PER COUPON ARE PROVIDED FOR KEEPING GOOD RELATION WITH MEMBERS. H E ALSO STATED THAT EXPENDITURES AS EXPLAINED ABOVE WERE INCURRED TO IN CREASE THE CONFIDENCE AND FAITH OF THE MEMBERS IN THE BANK WHICH CERTAINL Y HELP TO PROMOTE AND INCREASE THE BUSINESS ACTIVITY. THE NATURE OF THES E EXPENDITURE IS NOT OF CAPITAL NATURE OR PERSONAL IN NATURE AND INCURRED F OR BUSINESS EXPEDIENCY ACCORDING TO THE SCHEME FRAMED WITH RULES AND REGUL ATIONS APPROVED IN THE AGM OF BANK. 5.2 LD. COUNSEL FOR THE ASSESSEE ALSO RELIED ON THE FOLLOWING CASE LAWS:- A) JUDGMENT OF HONBLE CALCUTTA HIGH COURT IN THE CA SE OF INDIAN LEAF TOBACCO DEVELOPMENT CO. LTD, 137 ITR 827; B) HONBLE CALCUTTA HIGH COURTS JUDGMENT IN THE CA SE OF HINDUSTAN MOTORS LTD., 175 ITR 411; C) HONBLE GUJARAT HIGH COURT JUDGMENT IN THE CASE OF KARJAN COOPERATIVE COTTON SALES GINNING & PRESSING SOC., 1 99 ITR 17; D) HONBLE GUJARAT HIGH COURT JUDGMENT IN THE CASE OF DASCROI TALUKA COOP PURCHASE & SALES UNION LTD, 126 ITR 413 ; E) ORDER OF ITAT, MUMBAI IN THE CASE OF YAHOO INDIA PVT LTD IN ITA NO. 3800/MUM/2014. 5.3 ON THE OTHER HAND, LD. DR RELIED ON THE ORDER O F THE LD. CIT(A). SHE POINTED OUT THAT THESE EXPENDITURES ARE NOT INCURRE D FOR THE PURPOSE OF THE BUSINESS OR PROFESSION AND NOT REFLECTING ANY BUSIN ESS EXPEDIENCY. 5.4 WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THE MAIN SOURCE OF ITA NO. 2614/AHD/2011 THE KALUPUR COMMERCIAL CO-OP BANK LTD VS. ACIT AY : 2008-09 6 INCOME OF THE ASSESSEE IS THAT OF RECEIPT OF INTERE ST REALIZED ON THE ADVANCES MADE BY THE BANK AND OUT OF THE TOTAL ADVANCES OUTS TANDING AT THE END OF THE YEAR AT RS.735.65 CRORES, ADVANCES TO THE MEMBE RS WORKS OUT TO BE RS.722.36 CRORES WHICH COMPRISES MORE THAN 98% OF T OTAL ADVANCES. THE PRINCIPAL SOURCE OF RECURRING INCOME OF THE ASSESSE E IS FROM THE MEMBERS AND THEREFORE THE EXPENDITURE FOR KEEPING MEMBERS SUPPORT AND ATTRACTION TOWARDS THE BANK IS WHOLLY AND EXCLUSIVELY NECESSAR Y FOR THE PURPOSE OF BUSINESS. THE HONBLE HIGH COURT OF GUJARAT (FULL BENCH) IN THE CASE OF KARJAN CO-OPERATIVE COTTON SALES GINNING PRESSING S OCIETY (SUPRA) HAS HELD THAT IT WAS ABSOLUTELY NECESSARY FOR THE ASSESSEE T O MAINTAIN GOODWILL AMONGST ITS MEMBERS AND TO LURE THEM TO CONTINUE TO DO THEIR BUSINESS WITH THE SOCIETY IF IT GIVE PRESENTS TO ITS MEMBERS AND TO COMMEMORATE SILVER JUBILEE CELEBRATIONS, IT COULD NOT BE SAID THAT THE SOCIETY WAS NOT DOING SOMETHING AS A PRUDENT BUSINESS. 5.5 RELIANCE IS ALSO PLACED IN THE CASE OF CIT VS. DASCROI TALUKA COOP PURCHASE & SALES UNION LTD, 126 ITR 413 OF HONBLE GUJARAT HIGH COURT JUDGMENT, WHERE IT WAS HELD THAT THE AMOUNT SPENT B Y THE ASSESSEE-SOCIETY ON PURCHASE OF STAINLESS STEEL UTENSILS AND OTHER F OR THE PURPOSE OF TOUR EXPENSES OF MEMBERS WAS CONSIDERED TO BE BUSINESS E XPENDITURE WITHIN THE MEANING OF SECTION 37 OF THE ACT. 5.6 CONSIDERING TO THE ABOVE STATED FACTS AND CIRCU MSTANCES, THE VOLUME OF EARNING OF THE ASSESSEE BANK ARE MAINLY MADE THR OUGH ITS MEMBERS. THESE EXPENSES ARE INCURRED BY THE ASSESSEE BANK TO ATTRACT THE MEMBERS CONFIDENCE AND LOYALTY TOWARDS THE BANK IN THE PREV AILING COMPETITION SO THAT THE MEMBERS PLACE THEIR DEPOSITS WITH THE ASSE SSEE BANK AND ALSO CONTINUE TO BORROW FUNDS FROM THE ASSESSEE BANK IN ORDER TO IMPROVE THE PROFIT EARNING AND INCOME OF THE ASSESSEE BANK. WE HAVE ALSO CONSIDERED THAT THE AMOUNT SPENT ON THE AFORESAID EXPENDITURES IS VERY MARGINAL ITA NO. 2614/AHD/2011 THE KALUPUR COMMERCIAL CO-OP BANK LTD VS. ACIT AY : 2008-09 7 COMPARED TO THE AMOUNT OF INTEREST REALIZED ON THE ADVANCES MADE TO THE MEMBERS BY THE BANK AND AMOUNT OF DEPOSIT MADE BY T HE MEMBERS WITH THE BANK. UNDER THESE CIRCUMSTANCES THE AMOUNT SPEN T ON SCHOLARSHIP TO THE CHILDREN OF MEMBERS, PAYMENT TO LEGAL HEIRS OF MEMB ERS AND GIFTS TO MEMBERS COULD BE SAID TO BE EXPENDITURE INCURRED WH OLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS SINCE THE AMOUNT WAS SP ENT FOR KEEPING ALIVE ITS GOOD IMAGE AMONGST ITS MEMBERS AND ENSURING THAT GO ODWILL AND CONTINUITY OF BUSINESS WITH THE MEMBERS. IN VIEW OF ABOVE MENTIONED FACTS AND CIRCUMSTANCES, WE FIND THAT THE ASSESSEE HAD IN CURRED ABOVE STATED EXPENDITURE FOR PROMOTING THE BUSINESS, EVEN THOUGH THERE IS NO LEGAL OBLIGATION TO INCUR THESE EXPENDITURE BUT THE ASSES SEE HAD INCURRED IT FOR PRESERVING BUSINESS CONNECTION AND GOODWILL OF THE BUSINESS. THEREFORE, IN VIEW OF ABOVE FINDINGS, WE ALLOW THE AFORESAID EXPE NDITURE AS BUSINESS EXPENDITURE UNDER SECTION 37 OF THE ACT. 6. NEXT GROUND RELATES TO THE ADDITION OF RS.2,25,6 17/- MADE BY THE ASSESSING OFFICER ON THE BASIS OF ANNUAL INFORMATIO N RETURN DATA. 6.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSEE WAS ASKED TO EXPLAIN THE SIXTEEN ENTRIES PERTAINING TO AIR WI TH THE RETURN OF INCOME/BOOKS OF ACCOUNTS; HOWEVER, ASSESSEE WAS ABL E TO EXPLAIN ONLY THIRTEEN ENTRIES OUT OF SIXTEEN ENTRIES AND AN AMOU NT OF RS.2,25,617/- RELATING TO INTEREST WAS NOT EXPLAINED. THE ASSES SING OFFICER ACCORDINGLY ADDED THIS AMOUNT TO THE TOTAL INCOME OF THE ASSESS EE WHILE FRAMING ASSESSMENT U/S 143(3) OF THE ACT. AGGRIEVED BY TH E ORDER OF THE LD. AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) WHO , AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DISMISSED THIS GROUND OF THE ASSESSEE, BY OBSERVING AS UNDER:- I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER A ND THE SUBMISSION FILED BY THE APPELLANT. THE APPELLANT COULD NOT EXPLAIN THE ENTRY OF RS.2,25,617/- ITA NO. 2614/AHD/2011 THE KALUPUR COMMERCIAL CO-OP BANK LTD VS. ACIT AY : 2008-09 8 RELATING TO INTEREST OTHER THAN SECURITIES FROM THE BANKS OF ACCOUNT. THE AO ADDED THE AMOUNT AS THE SAME WAS NOT EXPLAINED BY T HE APPELLANT. DURING THE COURSE OF APPELLATE PROCEEDINGS ALSO, THE APPEL LANT HAS NOT BEEN ABLE TO GIVE ANY SATISFACTORY EXPLANATION REGARDING THE ENT RY. IT HAS BEEN SUBMITTED BY THE APPELLANT THAT THE DETAILS WERE INCOMPLETE A ND INCORRECT. THE SUBMISSION OF THE APPELLANT IS NOT ACCEPTABLE ARE M ERELY BY SAYING THAT THE DETAILS WERE INCORRECT, THE APPELLANT CANNOT WASH I TS HANDS OFF FROM THE RESPONSIBILITY OF EXPLAINING THE ENTRY. THE ADDITI ON MADE BY THE AO IS, THEREFORE, UPHELD. THE GROUND OF APPEAL IS, THEREF ORE, DISMISSED. 6.2 LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT BEF ORE THE AO IT WAS EXPLAINED THAT ENTRY POINTED OUT BY HIM AS PER AIR INFORMATION OF RS.2,25,617/- RELATING TO INTEREST OTHER THAN SECU RITIES WAS NOT TRACEABLE IN ITS BOOKS OF ACCOUNT. THE LD. COUNSEL ALSO STATED THAT IT WAS EXPLAINED TO THE LD. CIT(A) THAT THERE IS INCOMPLETE DETAILS RELATIN G TO THE ABOVE ENTRY STATING THAT BACKBAY RECLAMATION HAVE PAID INTEREST TO T HE ASSESSEE. THE LD. CIT-DR, ON THE OTHER HAND, RELIED ON THE ORDER OF T HE LOWER AUTHORITIES. 6.3 WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED T HE MATERIAL ON RECORD AND FOUND THAT THE ASSESSING OFFICER MADE THIS ADDI TION ON THE BASIS OF AIR INFORMATION POINTING THAT ASSESSEE HAS RECEIVED INT EREST ON SECURITIES FROM THE PARTY NAMED BACKBAY RECLAMATION. THE ASSESSE E HAD EXPLAINED BEFORE THE LOWER AUTHORITIES THAT THERE CANNOT BE A NY PARTY SUCH AS BACKBAY RECLAMATION WHICH INDICATES THAT DETAILS WERE INCO MPLETE AND ALSO INCORRECT. THE LD.CIT(A) HAS NOT GIVEN CONSIDERATIO N TO THE SUBMISSION OF THE ASSESSEE THAT THE ASSESSING OFFICER WAS FAILED TO POINT OUT THE COMPLETE DETAIL OF THE SAID TRANSACTION BECAUSE OF WHICH THE TRANSACTIONS REMAIN UNEXPLAINED. IN VIEW OF THE ABOVE STATED FACTS AND CIRCUMSTANCE S, WE CONSIDER THAT THE ADDITION WAS MADE IN ABSENCE OF COMPLETE PARTICULARS OF THE TRANSACTIONS WHICH COULD NOT IDENTIFY ANY SUCH INCOME EARNED BY THE ASSESSEE. BECAUSE OF INCOMPLETE INFORMATION AND PA RTICULARS RELATING TO SOURCE OF INTEREST PAYMENT SUPPLIED BY THE AO TO TH E ASSESSEE, THE ITA NO. 2614/AHD/2011 THE KALUPUR COMMERCIAL CO-OP BANK LTD VS. ACIT AY : 2008-09 9 TRANSACTIONS COULD NOT BE TRACED OUT. IN VIEW OF A BOVE STATED FACTS AND CIRCUMSTANCES, THE ADDITION MADE BY THE ASSESSING O FFICER IS NOT JUSTIFIED. WE, THEREFORE, ALLOW THIS GROUND OF APPEAL OF THE A SSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 17 TH AUGUST, 2016 AT AHMEDABAD. SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (AMARJIT SINGH) ACCOUNTANT MEMBER AHMEDABAD; DATED 17/08/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD