Assistant Commissioner of Income tax, V. The Osmanabad District Central Co-Operative Bank, Osmanabad

ITA 2702/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2679 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-03-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 30-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Keywords: Reassessment proceedings
• Section: 148; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 2702 /PUN/201 6 / ASSESSMENT YEAR : 200 7 - 08 THE ASSISTANT COMMISSIONER OF INCOME TAX, SWATI CHAMBERS, AUSA ROAD, LATUR ....... / APPELLANT / V/S. THE OSMANABAD DISTRICT CENTRAL CO - OPERATIVE BANK, OSMANBAD, SOLAPUR ROAD, OSMANBAD PAN : AAAAT2792B / RESPONDENT ASSESSEE BY : S HRI P RAMOD SHINGTE REVENUE BY : SHRI S.B. PRASAD / DATE OF HEARING : 06 - 03 - 2019 / DATE OF PRONOUNCEMENT : 08 - 0 3 - 2019 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 2, AURANGABAD DATED 06 - 09 - 2016 FOR THE ASSESSMENT YEAR 20 07 - 08. 2 ITA NO . 2702/PUN/2016, A.Y. 2007 - 08 2. THE FACTS OF THE CASE IN BRIEF ARE : THE ASSESSEE IS A CO - OPERATIVE SOCIETY ENGAGED IN BANKING BUSINESS. THE ASSESSMENT U/S. 143(3) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) WAS MADE ON THE ASSESSEE VIDE ORDER DATED 30 - 12 - 2009 DETERMINING THE INCOME AT RS.25,26,85,210/ - AS AGAINST LOSS OF RS.7,33,37,683/ - DECLARED BY THE ASSESSEE IN RETURN OF INCOME FIELD ON 29 - 10 - 2007. THEREAFTER, THE ASSESSMENT WAS REOPENED AND NOTICE U/S . 148 OF THE ACT WAS ISSUED ON 30 - 03 - 2010 TO THE ASSESSEE ON ACCOUNT OF OVERDUE INTEREST ON NON PERFORMING ASSETS (NPAS) CREDITED TO P & L ACCOUNT RS.32,57,68,000/ - . AGAINST THE ADDITION MADE IN REASSESSMENT PROCEEDINGS, THE ASSESSEE FILED APPEAL BEFOR E THE COMMISSIONER OF INCOME TAX (APPEALS) . P LACING RELIANCE ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. DEOGIRI NAGARI SAHAKARI BAN K LTD. REPORTED AS 379 ITR 24 , T HE COMMISSIONER OF INCOME TAX (APPEALS) ALLO WED THE APPEAL OF ASSESSEE. NOW, THE REVENUE IS IN APPEAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 3. SHRI PRAMOD SHINGTE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE ISSUE RAISED IN THE APPEAL BY THE REVENU E IS SQUARELY COVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. DEOGIRI NAGARI SAHAKARI BANK LTD. (SUPRA) AND BY THE RECENT DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PR. COMMISSIONER OF INCOME TAX VS. THE SOLAPUR DISTRICT CENTRAL CO - OP. BANK LTD. IN INCOME TAX APPEAL NO. 1000 OF 2016 DECIDED ON 29 - 01 - 2019. THE 3 ITA NO . 2702/PUN/2016, A.Y. 2007 - 08 HONBLE HIGH COURT HAS REAFFIRMED THE VIEW TAKEN IN THE CASE OF COMMISSIONER OF INCOME TAX VS. DEOGIRI NAGARI SAHAKARI BANK LTD. (SUPRA). 4. ON THE OTHER HAND SHRI S.B. PRASAD REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER. THE LD. DR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN HOLDING THAT THE ASSESSEE HAS CREDITED INTEREST ON NPA TO THE INTER EST SUSPENSE ACCOUNT. IN FACT, THE AMOUNT HAS BEEN ACTUALLY CREDITED TO THE P & L ACCOUNT. 5. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERUSED. THE SOLITARY ISSUE RAISED IN THE APPEAL BY REVENUE IS AGAINST ALLOWING INTEREST ON N ON P ERFORMING A SSETS. THE ASSESSEE HAS CREATED A PROVISION OF RS.32,57,68,000/ - IN THE P & L ACCOUNT ON ACCOUNT OF OVERDUE INTEREST ON NPAS AND HAS CLAIMED THE SAME DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. WE FIND THAT THE GROUND RAISE D BY THE REVENUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX VS. DEOGIRI NAGARI SAHAKARI BANK LTD. (SUPRA). THE HONBLE HIGH COURT FOLLOWING THE DECISION OF HONBLE APEX COURT IN THE CAS E OF UCO BANK VS. COMMISSIONER OF INCOME TAX REPORTED AS 237 ITR 889 HELD THAT INTEREST ON STICKY LOANS HAS TO BE ALLOWED. 6. THUS, IN VIEW OF WELL SETTLED LEGAL POSITION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). THEREFORE, 4 ITA NO . 2702/PUN/2016, A.Y. 2007 - 08 THE SAME IS UPHELD AND THE APPEAL OF REVENUE IS DISMISSED BEING DEVOID OF MERIT . 7. IN THE RESULT, APPEAL OF REV ENUE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 08 TH DAY OF MARCH, 2019. SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 08 TH MARCH, 2019 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 2, AURANGABAD 4. THE PR. COMMISSIONER OF INCOME TAX - 2, AURANGABAD 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE