Almora Zila Sehkari Bank Ltd., Almora V. ACIT, Nainital

ITA 3085/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86935 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 18-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR SENIOR
• Assessee Lawyers: S KRISHNAN; RAJA KUMAR S
• Keywords: Depreciation
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.3085/DEL./2012 (ASSESSMENT YEAR : 2009-10) ALMORA ZILA SEHKARI BANK LIMITED, VS. ACIT, MALL ROAD, NAINITAL. ALMORA. (PAN : AAALA0018J) ITA NO.3344/DEL./2012 (ASSESSMENT YEAR : 2009-10) ACIT, VS. ALMORA ZILA SEHKARI BANK LIMITED, NAINITAL. MALL ROAD, ALMORA. (PAN : AAALA0018J) (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI S. KRISHNAN & RAJA KUMAR, ADV OCATES REVENUE BY : MS. Y. KAKKAR, SENIOR DR DATE OF HEARING : 04.03.2015 DATE OF PRONOUNCEMENT : 11.03.2015 ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : BOTH THESE CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE EMANATE FROM THE ORDER OF CIT (APPEALS)-II, DEHRADUN DATED 16.04.2012 FOR THE ASSESSMENT YEAR 2009-10. ITA NO.3085 & 3344/DEL./2012 2 2. AT THE OUTSET OF THE HEARING, LD. AR SUBMITTED T HAT ISSUE WITH REGARD TO DISALLOWANCE OF PROVISION FOR GRATUITY PAYABLE I N THE PRESENT APPEAL HAS BEEN CONSIDERED BY THE ITAT IN ASSESSEE APPEAL IN ITA NO.3501/DEL./2010 FOR THE ASSESSMENT YEAR 2007-08 D ATED 19.01.2011 AND HE PLEADED THAT SIMILAR DIRECTION MAY BE ISSUED IN THIS YEAR ALSO. HE SUBMITTED THAT IN VIEW OF THE AFORESAID ITAT DECISI ON, THE APPEAL OF THE REVENUE ALSO BECOMES INFRUCUTUOUS. THE RELEVANT PO RTION OF THE ITAT ORDER, CITED SUPRA, READ AS UNDER :- 3. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFUL LY PERUSED THE ORDERS OF AUTHORITIES BELOW. 4. THE AO HAS COMPLETED THE ASSESSMENT U/S 143(3) O F THE ACT ON 22.12.2009. IN THE ASSESSMENT, THE AO DISALLOWED TH E ASSESSEES CLAIM OF GRATUITY PAYABLE AMOUNTING TO RS.1,51,08,408/- BY O BSERVING THAT THE GRATUITY FUND OF THE ASSESSEE IS NOT AN APPROVED FU ND AND THEREFORE, THE AMOUNT OF THE PROVISION MADE FOR GRATUITY TO MEET L IABILITY OF GRATUITY OF THE PERIOD OTHER THAN THE CURRENT YEAR CANNOT BE DE DUCTIBLE AS PER THE PROVISIONS OF SECTION 40A(7) OF THE ACT. IT WAS FUR THER OBSERVED THAT AS THE GRATUITY FUND OF THE ASSESSEE IS NOT AN APPROVE D FUND, THE AMOUNT OF CONTRIBUTION MADE BY THE ASSESSEE AS EMPLOYER TO TH E ABOVE FUND IS NOT ALSO DEDUCTIBLE U/S 40A(9) OF THE ACT. HE FURTHER O BSERVED THAT AS PER SECTION 43B OF THE ACT, A SUM PAYABLE IN RESPECT OF UNAPPROVED GRATUITY FUND IS NOT DEDUCTIBLE, IF IT IS NOT ACTUALLY PAID BY THE ASSESSEE WITHIN THE ACCOUNTING YEAR OR ON OR BEFORE THE DUE DATE OF FUR NISHING OF INCOME U/S 139(1) OF THE ACT. 5. THE AOS ACTION HAS BEEN CONFIRMED BY THE LEARNE D CIT(A). WHILE CONFIRMING THE AOS ORDER, CIT(A) OBSERVED TH AT IN THE COURSE OF HEARING OF THE APPEAL BEFORE HIM, A COPY OF THE ORD ER DATED 10.3.2010 PASSED BY THE CIT GRANTING RECOGNITION OF THE FUND TO THE ASSESSEE WAS FURNISHED BUT CIT(A) HAS TAKEN A VIEW THAT THE SAID ORDER GRANTING RECOGNITION TO THE ASSESSEES FUND WOULD BE APPLICA BLE ONLY TO FUTURE YEARS AND NOT TO THE YEARS FOR WHICH ASSESSMENT ORD ER HAS ALREADY BEEN PASSED. 6. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 7. IN THE COURSE OF HEARING OF THIS APPEAL, THE ASS ESSEE HAS PRODUCED BEFORE US THE COPY OF APPLICATION FOR APPR OVAL OF GRATUITY FUND ITA NO.3085 & 3344/DEL./2012 3 DATED 24.12.1990 FILED BEFORE CIT, LUCKNOW. THE ASS ESSEE HAS ALSO FILED COPY OF RECEIPT OF GRATUITY FUND DATED 10.8.2007 FR OM LIC OF INDIA. THE ASSESSEE HAS ALSO FURNISHED THE COPY OF THE ORDER D ATED 10.3.2010 OF THE CIT RECOGNIZING THE ASSESSEES GRATUITY SCHEME. THE ORDER RECOGNIZING THE ASSESSEES GRATUITY SCHEME DATED 10.3.2010 READ S AS UNDER:- ORDER 10.03.2010 UNDER RULE 2(1) OF PART C OF THE FOURTH SCHEDULE TO THE INCOME TAX ACT, 1961, I, THE COMMISSIONER OF INCOME TAX, HALDWANI, HEREBY ACCORD RECOGNITION W.E.F. 24/12/19 90 TO THE NAINITAL ALMORA KSHETRIYA GRAMIN BANK EMPLOYEES GRO UP GRATUITY-CUM-LIFE ASSURANCE SCHEME, NAINITAL ROAD, HALDWANI. 8. ON READING THIS ORDER PASSED BY THE CIT, HALDWAN I ON 10.3.2010, IT IS CLEAR THAT THE COMMISSIONER HAS AC CORDED RECOGNITION TO THE ASSESSEES GRATUITY CUM LIFE ASSURANCE SCHEME W .E.F. 24.12.1990. WE, THEREFORE FIND THAT THE ASSESSEES SCHEME HAS BEEN APPROVED BY THE CIT W.E.F. 24.12.1990. WE, THEREFORE, RESTORE THIS MATT ER BACK TO THE FILE OF THE AO FOR HIS FRESH ADJUDICATION IN THE LIGHT OF THE O RDER DATED 10.3.2010 OF CIT, HALDWANI ACCORDING RECOGNITION W.E.F. 24.12.19 90 TO THE ASSESSEES GRATUITY LIFE ASSURANCE SCHEME, AND AS PER THE PROV ISIONS OF THE ACT. THE AO SHALL PROVIDE REASONABLE OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE. WE ORDER ACCORDINGLY. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED TO BE ALLOWED IN THE MANNER AS INDICATED ABOVE. CIT, HALDWANI HAS ACCORDED RECOGNITION TO THE ASSES SEES GRATUITY CUM LIFE ASSURANCE SCHEME W.E.F. 24.12.1990 WHICH WAS RECORD ED BY ITAT IN ITS AFORESAID ORDER. WE, THEREFORE, RESTORE THIS MATTE R BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AS PER THE PROVISIONS OF THE ACT. THE ASSESSING OFFICER SHALL PROVIDE REASONABLE OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. WE ORDER ACCORDINGLY. 3. IN VIEW OF THE ABOVE, THE GROUND OF ASSESSEES A PPEAL IS ALLOWED ON THE SAME DIRECTIONS AS GIVEN IN AFORESAID ORDER OF ITAT FOR ASSESSMENT YEAR 2007-08. ITA NO.3085 & 3344/DEL./2012 4 4. IN THE GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF PROVISIONS OF INTEREST AND MT INTEREST. 5. LD. AR SUBMITTED THAT THIS DISALLOWANCE HAS BEEN MADE WITHOUT ANY REASON. ON THE OTHER HAND, LD. DR RELIED ON THE OR DERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. THE ASSESSEE HAS CLAIMED RELIEF OF RS.35,77,208/- ON ACCOUNT OF PROVISIONS F OR MT INTEREST BUT THE STATEMENT OF ACCOUNT SUBMITTED BY THE ASSESSEE OF T HE PROVISIONS OF MT INTEREST SHOWED A PROVISION OF RS.34,94,208/- IN O UR CONSIDERED VIEW, THIS EXPENDITURE AMOUNT OF RS.83,000/- WAS RIGHTLY DISAL LOWED BY THE LD. AUTHORITIES. THE LD. AR HAS NOT DISLODGED THE FIND INGS RECORDED BY THE ASSESSING OFFICER IN ITS PARA 3(D). CONSIDERING AL L THESE ASPECTS, WE FIND NO MERITS IN THIS GROUND OF ASSESSEES APPEAL AND T HE SAME IS DISMISSED. 7. THE GROUND NO.3 IN ASSESSEES APPEAL IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. 9. IN THE REVENUES APPEAL, THE ONLY ISSUE IS RELAT ED TO ALLOWING DISALLOWANCE OF DEPRECIATION BY THE CIT (A). 10. LD. CIT (A) HAS JUST AGREED WITH THE DIRECTIONS GIVEN BY THE CIT (A) IN ASSESSMENT YEAR 2007-08 WHEREIN HE HAS DIRECTED AS UNDER :- 10. IN VIEW OF THE ABOVE PROVISION OF LAW IN RELA TION TO ADMISSIBILITY OF DEPRECIATION, THE LD. ASSESSING OFFICER IS DIREC TED TO SIT WITH THE TAX ITA NO.3085 & 3344/DEL./2012 5 PAYER AND TAKE HIS HELP IN ORDER TO ALLOW THE CORRE CT AMOUNT OF DEPRECIATION TO THE APPELLANT. THE GROUND IS, THER EFORE, ALLOWED. THUS, THE CIT (A) HAS JUST AGREED WITH THE DIRECTIO N BUT NOT GRANTED THE RELIEF. THE CTI (A) HAS ALREADY DIRECTED THE ASSES SING OFFICER TO VERIFY THE CORRECT ACTUAL POSITION AND WE AGREE WITH THE SAME. THEREFORE, THIS GROUND OF REVENUES APPEAL HAS BECOME INFRUCTUOUS. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AS INFRUCTUOUS. 12. TO SUM UP : THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED AND THE APPEAL OF THE REVENUE IS DISMISSED AS INFRUCTUOUS. 4. AS THE ASSESSEES APPEAL IS RESTORED BACK ON THE ABOVE DIRECTIONS, THE CROSS APPEAL FILED BY THE REVENUE HAS BECOME INFRUC TUOUS. THE SAME IS DISMISSED AS INFRUCTUOUS. 5. TO SUM UP : THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES AND THE REVENUE IS DISMISSED AS INFRUCTUOU S. ORDER PRONOUNCED IN OPEN COURT ON THIS 11 TH DAY OF MARCH, 2015. SD/- SD/- (G.C. GUPTA) (B.C. MEENA) VICE PRESIDENT ACCOUNTANT MEMBER DATED THE 11 TH DAY OF MARCH, 2015 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-IV, NEW DELHI 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.