Nagar Urban Co-operative Bank Ltd., Ahmednagar V. Additional Commissioner of Income-tax,

ITA 281/PUN/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2728 (ITAT-PUNE)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 19-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Depreciation; Revenue expenditure

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.280 & 281/PN/2015 #& & / ASSESSMENT YEARS : 2008-09 & 2011-12 NAGAR URBAN CO-OP. BANK LTD., POST BOX NO.7, CENTRAL BANK ROAD, AHMEDNAGAR 414 001 MAHARASHTRA PAN NO.AAAAN0509L . / APPELLANT V/S ADDL.CIT, AHMEDNAGAR RANGE, AHMEDNAGAR . / RESPONDENT / ASSESSEE BY : NONE / REVENUE BY : SHRI HITENDRA NINAWE / ORDER PER VIKAS AWASTHY, JM : THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE. IN I TA NO.280/PN/2015 THE ASSESSEE HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 29-01 -2015 FOR THE ASSESSMENT YEAR 2008-09. THE SOLITARY ISSUE RAISED B Y THE ASSESSEE IN THE APPEAL IS CONFIRMATION OF DISALLOWANCE BY CIT (A) IN RESPECT OF AMORTIZATION OF PREMIUM PAID ON GOVERNMENT SECURITIES. / DATE OF HEARING :03.02.2016 / DATE OF PRONOUNCEMENT:12.02.2016 2 ITA NOS.280 & 281/PN/2015 2. BRIEF FACTS OF THE CASE ARE; THE ASSESSEE IS A COOPERA TIVE BANK. THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNT AS PER TH E GUIDELINES AND CIRCULARS ISSUED BY RESERVE BANK OF INDIA FROM TIME TO TIME. DURING THE COURSE OF SCRUTINY ASSESSMENT THE ASSESSING OFFICER MADE DISALLOWANCE OF RS.15,11,333/- IN RESPECT OF AMORTIZAT ION OF PREMIUM PAID ON GOVERNMENT SECURITIES HELD UNDER HTM CAT EGORY. THE AO HELD THAT HTM SECURITIES ARE IN THE NATURE OF CA PITAL ASSETS. AMORTIZATION OF PREMIUM ON HTM SECURITIES IS NOT ALLOWABLE U NDER THE PROVISIONS OF INCOME TAX ACT, 1961, AS ALL CAPITAL ASSE TS ARE TO BE VALUED AT COST ONLY AND NO PART THEREOF CAN BE CLAIM ED AS REVENUE EXPENDITURE IN COMPUTING TOTAL INCOME. 3. AGGRIEVED BY THE ASSESSMENT ORDER DATED 29-11-2010 THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A ) UPHELD THE FINDINGS OF THE AO AND DISMISSED THE APPEAL OF THE ASSE SSEE. NOW THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 4. DESPITE SERVICE OF NOTICE, NONE APPEARED ON BEHALF OF THE ASSSESSEE. THEREFORE, THE APPEALS ARE BEING DECIDED ON T HE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPA RTMENTAL REPRESENTATIVE. 5. SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF THE CIT(A) ON THE IS SUE. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT EARLIER TH IS ISSUE HAD TRAVELLED UPTO THE TRIBUNAL IN THE IMPUGNED ASSESSME NT YEAR IN ITA NO.1894/PN/2012. THE TRIBUNAL REMITTED THE ISSUE BAC K TO THE FILE OF THE AO VIDE ORDER DATED 04-11-2013 TO DECIDE IT AF RESH ON MERITS. IN THE SECOND ROUND, THE AO MADE DISALLOWANCE OF RS.15,11,333/-. IN THE FIRST APPEAL, THE CIT(A) CONFIRMED THE 3 ITA NOS.280 & 281/PN/2015 FINDINGS OF THE AO. THE LD. DEPARTMENTAL REPRESENTATIVE FAIR LY SUBMITTED THAT THE ISSUE RELATING TO AMORTIZATION OF PREMIUM PAID ON GOVERNMENT SECURITIES HAS BEEN CONSIDERED BY THE TRIBUN AL IN ASSESSEES OWN CASE IN ITA NO.1982/PN/2013 FOR A.Y. 2010 -11 DECIDED ON 20-05-2015. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL AV AILABLE ON RECORD. WE HAVE ALSO CONSIDERED THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN ITA NO.1982/PN/2013 (SUPRA). THE SOLITARY GR OUND RAISED IN THE PRESENT APPEAL IS AGAINST CONFIRMING OF DISALLOWA NCE OF RS.15,11,333/- DEBITED TO THE PROFIT AND LOSS ACCOUNT UNDE R THE HEAD AMORTIZATION OF PREMIUM PAID ON GOVERNMENT SECURITIE S. WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN AN APPEAL FILED BY THE REVENUE IN ITA NO.1982/ 2013. THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS : 21. THE ISSUE IN GROUNDS OF APPEAL NO.2 TO 6 IS AGAINST THE DELETION OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF P REMIUM PAID ON INVESTMENT IN GOVERNMENT SECURITIES TOTALING RS.10,00,0 00/-. 22. WE FIND THE SIMILAR ISSUE OF AMORTIZATION OF PREMI UM PAID ON INVESTMENT IN HTM SECURITIES AROSE BEFORE THE TRIBUNAL IN THE AHMEDNAGAR MERCHANTS COOPERATIVE BANK LTD. VS. JCIT ( SUPRA) AND THE CLAIM OF THE ASSESSEE WAS ALLOWED HOLDING AS UNDER :- 18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE FIRST ISSUE ARISING IN THE PRESENT APPEAL FILED BY T HE REVENUE IS WITH REGARD TO THE ALLOWABILITY OF AMORTIZATION P REMIUM PAID ON HTM SECURITIES AT RS.22,69,144/-. THE PUNE BENCH O F THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.712/PN/2013, RELATING TO ASSESSMENT YEAR 2009-10 VIDE ORDER DATED 27.11.2013 HAD ALLOWED THE CLAIM OF ASSESSEE, IN TURN R ELYING ON THE ORDER OF TRIBUNAL IN NAGAR URBAN COOPERATIVE BA NK LTD. IN ITA NO.306/PN/2012, OBSERVING AS UNDER:- 2. THE ONLY ISSUE IS WITH REGARD TO ADDITION MADE BY ASSESSING OFFICER WHO HAS DISALLOWED THE AMORTIZATION PREMIUM PAID ON GOVT. SECURITIES OF RS.23,13,525/-. A T THE OUTSET OF HEARING, LEARNED AUTHORIZED REPRESENTAT IVE POINTED OUT THAT THIS ISSUE IS COVERED IN FAVOUR OF AS SESSEE 4 ITA NOS.280 & 281/PN/2015 BY THE ORDER IN THE CASE OF NAGAR URBAN CO-OPERATIVE BANK LTD., IN ITA NO.306/PN/2012, WHEREIN THE TRIBU NAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER: 4. WE HAVE HEARD THE PARTIES. WE FIND THAT THE ISSUE BEFORE US IS CLEARLY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT PUNE BENCH IN THE CASE OF LATUR URBAN CO-OP. BANK LTD. IN ITA NO. 778 AND 792/PN/2011, ORDER DATED 31-8-2012. THE RELEVANT DISCUSSION AND FINDING OF THE TRIBUNAL ON THE ISSUE IS AS UNDER. 13. SO FAR AS GROUND NO. 2 IS CONCERNED, IT IS IN RESPECT OF THE DISALLOWANCES ON THE LOSS ON SALE OF SURPLUS OF RS. 14,70,000/-. THE A.O HAS OBSERVED THAT AN AMOUNT OF RS. 14,70,000/- IS DEBITED TO THE PROFIT & LOSS A/C ON ACCOUNT OF LOSS ON SALE OF SECURITIES. THE A.O HAS FURTHER OBSERVED THAT THE ASSESSEE IN ITS SUBMISSION HAS STATED THAT SECURITIES OF THE BANK ARE HELD UNDER THE HEAD TO MATURITY CATEGORY AND, THEREFORE, LOSS ARISING ON THE SALE OF INVESTMENT IS IN THE NATURE OF CAPITAL LOSS AND THEREFORE, THE SAME IS NOT ALLOWABLE EXPENDITURE. THE A.O MADE THE ADDITION TO THE EXTENT OF RS. 14,70,000/-. THE LD CIT(A) CONFIRMED THE ADDITION. 14. WE HAVE HEARD THE PARTIES. THE LD COUNSEL PLACED HIS HEAVY RELIANCE ON THE DECISION OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. BANK OF BARODA AND IN THE CASE OF UCO BANK VS. CIT, 240 ITR 355 (SC). IN THE CASE OF BANK OF BARODA (2003) 262 ITR 334 (BOM), THE ISSUE BEFORE THEIR LORDSHIP WAS WHETHER THE ASSESSEE WAS ENTITLED FOR DEDUCTION ON ACCOUNT OF DEPRECIATION IN THE VALUE OF INVESTMENTS. THE METHOD OF VALUATION FOLLOWED BY THE ASSESSEE BANK WAS TO VALUE INVESTMENTS AT COST OR MARKET VALUE WHICHEVER WAS LOWER. THE ASSESSEE HAD CLAIMED THE DEPRECIATION TO THE TUNE OF RS. 11,82,35,007/- AND THE SAID DEPRECIATION WAS CLAIMED AS A DEDUCTION WHICH WAS DISALLOWED BY THE A.O, BUT THE ASSESSEE BANK SUCCEEDED BEFORE THE CIT(A). THE TRIBUNAL CONFIRMED THE ORDER OF THE CIT(A). THE REVENUE CARRIED THE ISSUE BEFORE THE HONBLE HIGH COURT. THE CORE ISSUE WAS THE METHOD OF VALUATION ADOPTED BY THE ASSESSEE BANK FOR VALUING THE STOCK OF THE SECURITIES. THE HONBLE HIGH COURT FOLLOWED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF UNITED COMMERCIAL BANK (SUPRA). 15. IN THE CASE OF UNITED COMMERCIAL BANK (SUPRA), EVEN THE ISSUE OF VALUATION OF THE STOCK IN TRADE OF THE INVESTMENT WAS BEFORE THE HONBLE SUPREME COURT. IN THE CASE OF THE ASSESSEE, THE ISSUE IS 5 ITA NOS.280 & 281/PN/2015 REGARDING ALLOWABILITY OF THE LOSS ON THE SALE OF THE SECURITIES. MERELY BECAUSE THE SECURITIES ARE KEPT UNDER THE HEAD TILL THE MATURITY, THE SAID SECURITY CANNOT BE TREATED AS A PURELY INVESTMENT. LAW IS WELL SETTLED THAT THE SECURITIES HELD BY THE BANK ARE IN THE NATURE OF STOCK-IN-TRADE. WE MAY LIKE TO QUOTE HERE THE DECISION OF THE HONBLE HIGH COURT OF KERALA IN THE CASE OF CIT VS. NEDUNGADI BANK LTD., 264 ITR 545. IN THE SAID CASE, THE HONBLE HIGH COURT HAS HELD THAT THE SECURITIES HELD BY THE BANK ARE IN THE NATURE OF STOCK-IN-TRADE. BOTH THE AUTHORITIES BELOW HAVE MERELY GONE ON THE NOMENCLATURE OF THE HEAD UNDER WHICH THE SECURITIES ARE HELD. IN OUR CONSIDERED VIEW, NOMENCLATURE CANNOT BE DECISIVE FOR THE ASSESSEE BANK. WE, THEREFORE, HOLD THAT THE LOSS ON THE SALE OF THE SECURITIES IS REVENUE IN NATURE AND SAME IS ALLOWABLE. ACCORDINGLY, GROUND NO. 2 IS ALLOWED. 2.1 MOREOVER, THE SAID ISSUE IS ALSO DECIDED IN FAVOUR O F THE ASSESSEE BY OTHER CO-ORDINATE BENCH IN THE FOLLOWIN G CASES: I) DECISION OF BANGALORE BENCH OF THE TRIBUNAL IN TH E CASE OF KRISHNA GRAMEENA BANK VS. ADDL. CIT (ITA NO. 146/BANG/2011 AND 224/BANG/2011 ORDER DATED 15-6- 2012. II) DECISION OF BANGALORE BENCH OF THE TRIBUNAL IN T HE CASE OF NATIONAL CO-OP. BANK LTD. VS. JT. CIT RANGE 3 BAN GALORE (ITA NO. 1090/BANG/2010 AND 7/BANG/2011, ORDER DATED 11-5-2012). WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) ON THI S ISSUE AND ALLOW THE CLAIM OF THE ASSESSEE. 2.1 FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONIN G, WE HOLD THAT AMORTIZATION PREMIUM PAID ON GOVT. SECURITIES OF RS.23,13,525/- DEBITED TO PROFIT AND LO SS ACCOUNT, AS PER RBI GUIDELINES HAS TO BE ALLOWED BEING EXPENSES INCURRED DURING THE COURSE OF BUSINESS OF BANKING, ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 19. THE ISSUE ARISING BEFORE US IS SIMILAR TO THE ISSUE BEF ORE THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2009-10 AN D FOLLOWING THE SAME PARITY OF REASONING, WE UPHOLD THE ORDER OF CIT(A) IN ALLOWING THE DEDUCTION ON ACCOUNT OF AMOR TIZATION PREMIUM PAID ON GOVERNMENT SECURITIES. THE GROUNDS OF APPEAL NOS.1 TO 8 RAISED BY THE REVENUE ARE THUS, DISMISSED. 23. WE FIND THAT THE TRIBUNAL HAD ALLOWED THE CLAIM OF THE ASSESSEE, WHEREIN, IN TURN, RELYING THE ORDER OF THE TRIBUNAL IN NAGAR URBAN CO- OPERATIVE BANK LTD. (SUPRA). FOLLOWING THE SAME PARIT Y OF REASONING, WE UPHOLD THE ORDER OF THE CIT(A) IN ALLOWING THE DEDU CTION ON ACCOUNT OF AMORTIZATION OF PREMIUM PAID ON HTM SECURITIES AT RS .10,00,000/-. THE GROUNDS OF APPEAL NO.2 TO 6 RAISED BY THE REVENUE ARE THUS, DISMISSED. 6 ITA NOS.280 & 281/PN/2015 7. THE LD. DEPARTMENTAL REPRESENTATION HAS NOT PLACED AN Y MATERIAL ON RECORD TO CONTROVERT THE FINDING OF THE TRIBUNA L. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE COORDINATE B ENCH, WE DIRECT THE AO TO DELETE THE ADDITION OF RS.15,11,333/- O N ACCOUNT OF AMORTIZATION OF PREMIUM PAID ON GOVERNMENT SECURITIES. 8. IN THE RESULT, THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.281/PN/2015 (A.Y. 2011-12) : 9. IN ITA NO.281/PN/2015 FOR A.Y. 2011-12 THE ONLY ISSUE RAISED BY THE ASSESSEE IS AGAINST THE PART RELIEF GRANTED BY THE CIT(A) ON ACCOUNT OF UNCLAIMED LIABILITIES. THE AO MADE ADDITION OF RS.15,50,807/-. THE CIT(A) CONFIRMED THE ADDITION TO THE EXT ENT OF RS. 6,03,725/-. 10. DURING THE COURSE OF SCRUTINY ASSESSMENT THE AO OBS ERVED, THAT IN THE BALANCE SHEET UNDER THE HEAD SUNDRY LIABILIT IES THE ASSESSEE HAS SHOWN AN UNCLAIMED AMOUNT OF RS.45,09,479/-. THE ASSESSEE WAS ASKED TO EXPLAIN THE SAME. THE ASSESSEE VIDE LETTER DATED 16-01-2013 SUBMITTED THAT THESE ARE ON ACCOUNT OF RECONCILIATION OF ACCOUNTS BETWEEN TWO BANKS AT THE END OF FINANCIAL YEAR. THE AMOUNT REPRESENTS THE CHEQUE ISSUED AND AC CEPTED WHICH REMAINED UNCLEARED AT THE CLEARING HOUSE AT THE FAG END OF THE FINANCIAL YEAR. THE RECONCILIATION OF ACCOUNTS WITH THE BANKS IS A CONTINUOUS PROCESS. THE ENTIRE AMOUNT IS RECONCILIABLE AN D IS NOT AN INCOME OF THE BANK. IT IS AN ASCERTAINED LIABILITY OF THE BANK. THE ASSESSEE FURNISHED THE DETAILS OF ACCOUNTS IN RESPECT OF WHICH UNCLEARED CHEQUES WERE DEPOSITED. BRUSHING ASIDE THE S UBMISSIONS OF THE ASSESSEE, THE AO MADE ADDITION OF RS.15,50,807/-. TH E 7 ITA NOS.280 & 281/PN/2015 ASSESSEE TOOK THE MATTER IN APPEAL BEFORE CIT(A). THE CI T(A) AFTER EXAMINING THE DETAILS OF UNCLAIMED AMOUNTS FURNISHED BY THE ASSESSEE, GRANTED PART RELIEF BY DELETING THE ADDITION TO T HE EXTENT OF RS.9,47,082/-. THE CIT(A) CONFIRMED THE ADDITION OF RS.6,03,725 /- IN RESPECT OF UNCLAIMED AMOUNT BEYOND THE PERIOD OF THREE YEARS, BEING BARRED BY LIMITATION. 11. SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT SUB MITTED THAT THE CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE TO TH E EXTENT THE ASSESSEE WAS ABLE TO SHOW THAT THE AMOUNT REPRESENTE D THE UNCLAIMED CHEQUES AT THE END OF THE FINANCIAL YEAR. THE CI T(A) HAS CONFIRMED THE ADDITION ONLY IN RESPECT OF UNCLAIMED AMOUNT WHICH IS BARRED BY LIMITATION. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE FINDINGS OF THE CIT(A) ON THE ISSUE. THE LD . DEPARTMENTAL REPRESENTATIVE FURTHER POINTED OUT THAT TH E ISSUE RAISED IN PRESENT APPEAL HAS BEEN CONSIDERED BY THE TRIB UNAL IN ASSESSEES OWN CASE IN ITA NO.1861/PN/2013 FOR A.Y. 2010 -11 DECIDED ON 20-05-2015. 12. WE HAVE HEARD THE SUBMISSIONS MADE BY LD. DEPARTMEN TAL REPRESENTATIVE AND HAVE PERUSED THE ORDERS OF THE AUT HORITIES BELOW. WE HAVE ALSO CONSIDERED THE ORDER OF TRIBUNAL IN ITA NO.1861/PN/2013. WE FIND THAT THE ISSUE RAISED IN THE PRE SENT APPEAL IS IDENTICAL TO THE ISSUE RAISED BY ASSESSEE IN AFOR ESAID APPEAL FOR A.Y. 2010-11. THE TRIBUNAL DECIDED THE ISSUE IN F AVOUR OF THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS : 11. THE FIRST ISSUE RAISED BY THE ASSESSEE IS AGAINST THE A DDITION CONFIRMED BY THE CIT(A) ON ACCOUNT OF UNCLAIMED LIA BILITY OF RS.29,58,672/-. AS POINTED OUT BY US IN PARAS HEREINABO VE, THE SAID LIABILITY WAS ON ACCOUNT OF UNCLAIMED DDS ISSUED BY THE BANK, WHICH WERE NOT PRESENTED IN THE BANK. 8 ITA NOS.280 & 281/PN/2015 12. WE FIND THAT SIMILAR ISSUE OF RECOGNITION OF UNCLA IMED LIABILITY AND ITS NONTAXABILITY AROSE BEFORE THE PUNE BENCH OF THE TRIBUNAL IN THE AHMEDNAGAR MERCHANTS CO-OPERATIVE BANK LTD. VS. JCIT VIDE ITA NO.1863/PN/2013 AND OTHER RELATING TO ASSESSMENT YEAR 2010-11, ORDER DATED 29.04.2015, IT WAS HELD AS UNDER:- 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE BANK IN THE BALANCE SHEET FILED FOR THE YE AR UNDER CONSIDERATION HAD SHOWN UNCLAIMED LIABILITY OF RS.27,5 7,051/-. THE EXPLANATION WITH REGARD TO THE NATURE OF SAID L IABILITY BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW WAS THAT THE SAME REPRESENTED THE UNCLAIMED DEMAND DRAFTS PURCHASED BY T HE CUSTOMERS, WHICH HAVE NOT BEEN PRESENTED FOR CLEARING FOR MORE THAN SIX MONTHS. THE SAID LIABILITIES WERE BEING RECOG NIZED BY THE ASSESSEE IN ACCORDANCE WITH THE GUIDELINES OF THE RB I. FURTHER CLAIM OF THE ASSESSEE WAS THAT PART OF THE SAID AMOUNTS WAS ADJUSTED IN THE SUBSEQUENT YEARS. HOWEVER, SUM OF RS.1,17,446/- WAS THE AMOUNT PERTAINING TO CURRENT YE AR, WHICH WAS PAID IN THE SUCCEEDING YEAR, HENCE THE SAME AMOUNT WAS NOT ADDED IN THE HANDS OF THE ASSESSEE AND AN ADDITION OF TH E BALANCE AMOUNT OF RS.26,39,605/- WAS MADE IN THE HANDS OF THE ASSESSEE ON THE PREMISE THAT IN VIEW OF THE PROVISIONS OF LIMI TATION ACT, THERE WAS NO LIABILITY ON THE ASSESSEE TO PAY THE SAID A MOUNTS. THE ISSUE ARISING BEFORE US IS IN RELATION TO THE TREATM ENT OF SAID LIABILITY RECOGNIZED BY THE ASSESSEE IN ITS BOOKS OF ACCO UNT. ONCE THE LIABILITY HAS BEEN SHOWN AND RECOGNIZED BY THE ASSE SSEE IN ITS BOOKS OF ACCOUNT, THEN EVEN IF THE LIABILITY IS UNCLA IMED AND RELATES TO EARLIER YEARS, DOES NOT CONVERT IT INTO THE INCOME OF THE ASSESSEE. SUPPORT IN THIS REGARD IS DRAWN FROM THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CIT VS. SUGAULI SUGAR WORKS (P) LTD. (SUPRA). HOWEVER, IN CASE WHERE THE ASSES SEE ON ITS OWN MOTION TRANSFERS THE SAID RECEIPTS THROUGH ITS PR OFIT & LOSS ACCOUNT, THEN ON ACCOUNT OF SUCH ACT OF THE ASSESSEE ITSELF, THE AMOUNT CHANGES ITS CHARACTER AND BECOMES ASSESSEES O WN MONEY AND THE SAME IS TO BE TREATED AS INCOME OF THE ASSESSEE AS PER THE RATIO LAID DOWN BY THE HONBLE SUPREME COUR T IN CIT VS. TVS SUNDARAM IYENGAR AND SONS LTD. (SUPRA). HOWEVER, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE CONTINUES TO RECO GNIZE THE LIABILITY AND ONCE THE LIABILITY HAS BEEN SO RECOGNIZ ED BY THE ASSESSEE, THERE IS NO MERIT IN TREATING THE SAME AS INCOME OF THE ASSESSEE THOUGH SOME OF THE AMOUNTS MAY NOT BE RECOVERABL E BY APPLICATION OF PROVISIONS OF LIMITATION ACT. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE CHENNAI BENCH OF THE TRI BUNAL IN ACIT VS. KARUR VYSYA BANK LTD. (SUPRA) AND PUNE BENCH OF TH E TRIBUNAL IN ACIT VS. PEOPLES CO-OPERATIVE BANK LTD., IN ITA NO.2197/PN/2012 RELATING TO ASSESSMENT YEAR 2009-10, O RDER DATED 29.09.2013. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.26,39,605/-. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 13. THE ISSUE ARISING IN GROUND OF APPEAL NO.1 IS IDENT ICAL TO THE ISSUE BEFORE THE PUNE BENCH OF THE TRIBUNAL AND FOLLOWING THE SAME PARITY OF REASONING, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.29,58,672/-. THE GROUND OF APPEAL NO.1 RAISED BY T HE ASSESSEE IS, THUS ALLOWED. 9 ITA NOS.280 & 281/PN/2015 13. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NOT PLACED A NY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF THE TRIBU NAL ON THE ISSUE. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE B ENCH, WE DIRECT THE AO TO DELETE THE ADDITION OF RS.6,03,725/-. ACCORDINGLY, THE IMPUGNED ORDER IS SET ASIDE AND THE APP EAL OF THE ASSESSEE IS ALLOWED. 14. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON FRIDAY THE, 12 TH DAY OF FEBRUARY, 2016. SD/- SD/- ( R.K. PANDA ) ( VIKAS AWASTHY ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE ; DATED : 12 TH FEBRUARY, 2016. ) *#,! -! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A ) - 2 , PUNE 4. 5. 6. THE CIT-2, PUNE $ ''(, (, / DR, ITAT, B PUNE; - / GUARD FILE. / BY ORDER , $ ' //TRUE COPY// // TRUE COPY // // $ ' //TRUE C // /0 ' ( / SR. PRIVATE SECRETARY (, / ITAT, PUNE