Shri Warana Sah. Bank Ltd, Kolhapur V. Assistant Commissioner of Income tax,

ITA 2882/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0048 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-03-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 19-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bad and doubtful debts; Set aside
• Section: 143(3)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.2882/PUN/2016 / ASSESSMENT YEAR : 2013-14 SHRI WARANA SAHAKARI BANK LTD., KOLHAPUR. C/O. S.V. PHADNIS, C.A./ SUSHANT S. PHADNIS, 613 E WARD, PHADNIS CHAMBERS, SHAHUPURI, 2 ND LANE, KOLHAPUR 416001. PAN : AAAAS1033L. . / APPELLANT V/S THE ASST.COMMISSIONER OF INCOME TAX, CIRCLE 1, KOLHAPUR. . / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE. REVENUE BY : SHRI SANJEEV GHEI. PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 1, KOLHAPUR DATE D 06.10.2016 FOR THE ASSESSMENT YEAR 2013-14. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A CO-OPERATIVE BANK ENGAGED IN THE BANKING BUSINESS AND ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y . 2013- / DATE OF HEARING : 28.03.2019 / DATE OF PRONOUNCEMENT: 29.03.2019 2 ITA NO.2882/PUN/2016 14 ON 27.09.2013 SHOWING LOSS AND BROUGHT FORWARD LOSS OF RS.52,63,559/-. THE CASE WAS SELECTED FOR SCRUTINY AND T HEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.08.03.2016 AND THE TOTAL INCOME WAS DETERMINED AT RS.3,66,68,320/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.06.10.2016 (IN APPEA L NO.KOP/19/16-17) GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE HONBLE CIT(A)-1, HAS ERRED IN LAW AND ON MERIT IN MAKING A DDITIONS OF RS.29,33,664/- TOWARDS DISALLOWANCE U/S 36(1)(VIIA) OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE HONBLE CIT(A)-1, HAS ERRED IN NOT CONSIDERING THE FACT THE DIFFERENCE IN ACCOUNT OF RS.1,18,417/- AS PER 26AS WAS DULY ACCOU NTED IN THE BOOKS OF THE APPELLANT. 3. 1 ST GROUND IS WITH RESPECT TO DISALLOWANCE OF RS.29,33,664/- U/S 36(1)(VIIA) OF THE ACT ON ACCOUNT OF PROVISION FOR BAD AN D DOUBTFUL DEBTS. 3.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NO TICED THAT ASSESSEE HAD NOT MADE ANY PROVISION FOR BAD AND D OUBTFUL DEBTS IN THE BOOKS OF ACCOUNTS BUT IN THE COMPUTATION O F INCOME HAD CLAIMED DEDUCTION TO THE TUNE OF RS.29,33,664/- U/S 3 6(1)(VIIA) OF THE ACT. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE DEDUCTION IN THE COMPUTATION OF INCOME NOT BE DISALLOWED, TO WHICH THE ASSESSEE MADE SUBMISSIONS WHICH WERE NOT FOUND ACCE PTABLE TO THE AO. AO NOTED THAT AS PER PROVISIONS OF SEC.36(1)(VIIA) OF THE ACT, ASSESSEE WILL GET DEDUCTION FOR PROVISIONS OF BAD AND DOUBT FUL DEBTS 3 ITA NO.2882/PUN/2016 ONLY OF THE AMOUNT OF SUCH PROVISION ACTUALLY DEBITED T O THE PROFIT AND LOSS ACCOUNT. HE NOTED THAT SINCE ASSESSEE HAS N OT CREATED ANY PROVISION OF BAD AND DOUBTFUL DEBTS IN THE BOOKS OF A CCOUNTS NO DEDUCTION OF RS.29,33,664/- AS CLAIMED IN THE RETURN IS ALLOWABLE U/S 36(1)(VIIA) OF THE ACT. HE ALSO RELIED ON THE INSTRUCTIONS OF CBDT INSTRUCTION NO.17/2008 DATED 26.11.2 008. HE THUS DISALLOWED RS.29,33,664/- ON ACCOUNT OF DEDUCTIO N UNDER SEC.36(1)(VIIA) OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSE SSEE CARRIED THE MATTER BEFORE LD.CIT(A). LD.CIT(A) FOR THE REASONS STAT ED IN PARA 4.2 OF THE ORDER DENIED THE CLAIM OF ASSESSEE. AG GRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE US. 4. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A). LD.D.R. ON THE OTHER HAND SUPPORTED THE O RDER OF AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT THE ISSUE IS C OVERED AGAINST THE ASSESSEE BY THE ORDER OF TRIBUNAL IN THE CA SE OF YOUTH DEVELOPMENT CO-OPERATIVE BANK LTD., VS. ACIT (ITA NOS.216 1 & 2162/PUN/2013 ORDER DATED 29.10.2014 FOR A.YS. 2007-08 & 2009- 10). HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID ORDER. HE THEREFORE SUBMITTED THAT NO INTERFERENCE TO THE ORDER O F LD.CIT(A) IS CALLED FOR. HE THUS SUPPORTED THE ORDER OF AO AND LD.CIT (A). LD.A.R. DID NOT CONTROVERT THE SUBMISSIONS OF LD.D.R. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DISALLOWANCE OF CLAIM OF PROVISION FOR BAD AND DOUBTFUL DEBTS OF RS.29,33,664/- U/S 36(1)(VIIA) OF THE ACT. WE FIND THAT AO H AS NOTED THAT NO PROVISIONS FOR BAD AND DOUBTFUL DEBTS OF WAS MADE 4 ITA NO.2882/PUN/2016 IN THE BOOKS OF ACCOUNT BUT HOWEVER ASSESSEE IN THE C OMPUTATION OF INCOME HAD CLAIMED INCOME OF RS.29,33,664/-. WE FIND THAT IDENTICAL ISSUE AROSE IN THE CASE OF YOUTH DEVELOPMENT CO- OP. BANK LTD., (SUPRA) WHEREIN THE CO-ORDINATE BENCH OF THE TRIBUNAL BY FOLLOWING THE DECISION OF TRIBUNAL IN THE CASE OF MAHALAXMI CO- OP BANK LTD., VS. ACIT (ITA NO.1658/PN/2011 DT.29.10.2013) D ECIDED THE ISSUE AGAINST THE ASSESSEE BY HOLDING THAT THE DEDU CTION U/S 36(1)(VIIA) OF THE ACT IS TO BE RESTRICTED TO THE EXTENT OF P ROVISION FOR BAD AND DOUBTFUL DEBTS ACTUALLY MADE IN THE ACCOUNT BOO KS. BEFORE US, NO MATERIAL HAS BEEN PLACED ON RECORD BY THE ASSESS EE TO DEMONSTRATE THAT THE AFORESAID DECISION OF TRIBUNAL HAS B EEN SET ASIDE / STAYED OR OVERRULED BY THE HIGHER JUDICIAL AUTHOR ITIES. BEFORE US, ASSESSEE HAS ALSO NOT PLACED ANY CONTRARY B INDING DECISION IN ITS SUPPORT. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A). THUS, GROUND NO.1 OF THE ASSESSEE IS DISMISSED. 6. 2 ND GROUND IS WITH RESPECT TO ADDITION OF RS.1,18,417/- ON ACCOUNT OF DIFFERENCE IN 26AS. 6.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ON THE BASIS OF VERIFICATION MADE WITH RESPECT TO THE 26AS STATE MENT AND ASSESSEES BOOKS OF ACCOUNTS, AO NOTED THAT THERE WAS DIFFERENCE OF RS.1,18,417/- SHOWN AS PER THE BOOKS OF ASSESSEE AND AS PER THE 26AS STATEMENT AND THE DETAILS OF WHICH ARE GIVEN AT PA RA 7 OF THE ASSESSMENT ORDER. THE ASSESSEE WAS ASKED TO RECONCILE THE DIFFERENCES. AO AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE 5 ITA NO.2882/PUN/2016 CONCLUDED THAT ASSESSEE HAS BEEN UNABLE TO EXPLAIN TH E DIFFERENCE OF AMOUNTS BETWEEN 26AS STATEMENT AND ITS BOOKS OF ACC OUNTS. HE ACCORDINGLY CONSIDERED THE DIFFERENCE OF RS.1,18,417/- AS UNEXPLAINED AND MADE ITS ADDITION. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO CONFIRME D THE ACTION OF AO FOR THE REASONS STATED IN PARA 4.3 OF HIS ORD ER. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 7. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER POINTED TO THE SUBMISSIONS MADE BEFORE LD.CIT(A). HE SUBMITTED THAT IN VIEW OF THE ASSESSEES EX PLANATION NO ADDITION IS CALLED FOR IN THE PRESENT CASE. LD. D.R. ON TH E OTHER HAND SUPPORTED THE ORDER OF AO AND LD.CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ADDITION WAS MADE ON ACCOUNT OF THE DIFFERENCE OF AMOUNT BETWEEN 26AS STATEMENT AND ITS BOOKS OF ACCO UNT AND AS CONFIRMED BY THE RESPECTIVE PARTIES. AO AND LD.CIT(A) H AVE NOTED THAT NO PROPER EXPLANATION WAS PROVIDED BY ASSES SEE NOR THE ASSESSEE COULD RECONCILE THE DIFFERENCE. BEFORE US, NO MATE RIAL HAS BEEN PLACED ON RECORD BY THE ASSESSEE TO RECONCILE THE DIFFERENCE BETWEEN 26AS AND ITS BOOKS OF ACCOUNTS EXCEPT POINTING TO THE GENERAL EXPLANATION THAT WAS SUBMITTED BEFORE LOWER AUTHO RITIES. IN SUCH A SITUATION, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A) AND THUS, THE GROUND NO.2 OF THE ASSESSEE IS DISMISSED. 6 ITA NO.2882/PUN/2016 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 29 TH DAY OF MARCH, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ! / ACCOUNTANT MEMBER PUNE; DATED : 29 TH MARCH, 2019. YAMINI '#$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4 5. 6. THE CIT(A)-1, KOLHAPUR. THE CIT-I, KOLHAPUR. !,# ! , / DR, ITAT, A PUNE; &'(/ GUARD FILE. / BY ORDER // TRUE COPY // ) *+, - / SR. PRIVATE SECRETARY # ! , / ITAT, PUNE.