ACIT, AKOLA CIRCLE, Akola V. THE BULDHANA DISTRICT CENTRAL CO. OP. BANK LTD, Buldhana

ITA 313/NAG/2015

• Counselvise Citation: [2014] 117 COUNSELVISE.COM (IT) 8874 (ITAT-NAGPUR)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 23-10-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 03-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K B LOHIYA
• Keywords: Depreciation; Bad and doubtful debts; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE S HRI SHAMIM YAHYA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 313 / NAG/2015 ASSESSMENT Y EAR: 2012 - 13 THE ASSTT. COMMISSIONER OF INCOME - TAX, AKOLA CIRCLE, FIRST FLOOR, AAYAKAR BHAVAN, MURTIZAPU R ROAD, AKOLA PIN - 444001 VS. THE BULDHANA DISTRICT CENTRAL - CO - OP BANK LTD., SAHAKAR BHAVAN, BHONDE CHOWK, BULDHANA 443001 PAN : AAAAT9375N (APPELLANT) (RESPONDENT) REVENUE BY : SHRI GITESH KUMAR (D R) ) ASSESSEE BY : SHRI K.B. LOHIYA (ADVOCAT E ) DATE OF HEARING: 11 /05 /201 8 DATE OF PRONOUNCEMENT: 20 / 06 /201 8 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER DATED 24.09.2015 PASSED BY THE COMMIS SIONER OF INCOME TAX (APPEALS) - I , NAGPUR, WHEREBY THE LD. CIT (A ) HAS PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED UNDER SECTION 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. THE BRIEF FACTS OF THE C ASE ARE THAT THE ASSESSEE ENGAGED IN THE BUSINESS OF BA NKING AND ALLIED SERVICES, FILED ITS RETURN OF INCOME DECLARING THE NIL INCOME AFTER CLAIMING SET OFF OF CARRIED FORWA RD LOSS AND DEPRECIATION. SINCE THE CASE WAS SELECTED FOR SCRUTINY , NOTICE U/S 143 (2) OF THE ACT WAS ISSUED . I N RESPONSE TO THE SAID NOTICE , THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED BEFORE THE AO AND SUBMITTED THE DETAILS AS CALLED FOR BY THE AO. IT WAS NOTICED THAT THE ASSESSEE HAD DEBITED RS. 3,91,08,000/ - UNDER THE HEAD 2 ITA NO. 313 / NAG /2015 ASSESSMENT YEAR: 2012 - 1 3 OVERDUE INTEREST RESERVE. ON BEING ASKED, THE ASSESSEE EXPLAINED THAT THE SAME IS PROVISION FOR INTEREST ON NPA ACCOUNT. THE AO DECLINED THE CLAIM OF THE ASSESSEE HOLDING THAT SINCE THE ASSESSEE HAD ALREADY MADE THE DEDUCTION FOR PROVISION OF OVERDUE IN TEREST BY CLAIMING THE DEDUCTION U/S 80P. 3. SIMILARLY, IT WAS NOTICED THAT THE ASSESSEE HAD CLAIMED DEDUCTION OF RS. 1,03,47,173/ - UNDER THE HEAD ONE TIME SETTLEMENT A DJUSTMENT ACCOUNT WHICH INCLUDED BAD DEBT WRITTEN OFF OF RS. 69,15,297/ - . IT WAS FURTHE R NOTICED THAT IN THE COMPUTATION OF INCOME, THE ASSESSEE HA D AGAIN DEDUCTED THE SAME AMOUNT WHILE COMPUTING THE TOTAL INCOME. WHEN THIS FACT WAS BROUGHT TO THE NOTICE TO THE ASSESSEE IT WAS ADMITTED BY THE ASSESSEE THAT IT HAD HAPPENED DUE TO INADVERTEN T MISTAKE ON ITS PART AND FURTHER SUBMITTED THAT RS. 69,15,297/ - SHOULD BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A). THE LD. CIT (A) AFTER HEARING THE ASSESSEE DELETED THE INTEREST ACCRUED ON NPA. THE LD. CIT (A) FURTHER DELETED THE ADDITION OF RS. 69,15,297/ - MADE U/S 36(1) (VIIA) OF THE ACT. THE REVENUE IS IN APPEAL AGAINST THE FINDINGS OF THE LD.CIT (A). 5. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD.CIT ( A) ON THE FOLLOWING EFFECTIVE GROUNDS : - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS. 69,15,297/ - MADE BY THE ASSESSING OFFICER BEING DEDUCTION ON ACCOUNT OF BAD DEBTS CLAIMED TWICE WHICH WAS ALSO AGREED TO BE ADDED TO ITS INCOME BY THE ASSESSEE. 2. THE LD. CIT (APPEALS) ERRED IN NOT APPRECIATING THAT THE ASSESSEE HAD CLAIMED A DEDUCTION OF RS. 1,03,47,173/ - SSS UNDER THE HEAD ONE TIME SETTLEMENT WHICH INCLUDED 3 ITA NO. 313 / NAG /2015 ASSESSMENT YEAR: 2012 - 1 3 BAD DEBTS WRITTEN OFF OF RS. 69,15,297/ - AND THE SAME DEDUCTION OF RS. 69,15,297/ - WAS ALSO CLAIMED AGAIN IN THE COMPUTATION OF INCOME WHICH WAS RIGHTLY ADDED BACK BY THE ASSESSING OFFICER AS AGREED TO BY THE ASSESSEE. 6. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUB MITTED THAT THE LD.CIT (A) HAS ERRED IN DELETING THE ADD ITION OF R S. 69,15,297/ - MADE BY THE AO BEING DEDUCTION ON ACCOUNT OF BAD DEBTS CLAIMED BY THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD ALREADY CLAIMED THE DEDUCTION OF RS. 1,03 ,47,573/ - UNDER THE HEAD ONE TIME SETTLEMENT INCLUDING THE BAD DEBTS WRITTEN OFF TO THE TUNE OF RS. 69,15,297/ - . SINCE, THE ORDER IS APPARENTLY ERRONEOUS THE SAME IS LIABLE TO BE SET ASIDE. 7. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE FAIRLY ADMITTED THAT THE LD. CIT (A ) HAS WRONGLY DELETED THE ADDITION OF RS. 69,15,297/ - MADE BY THE AO. THE LD. COUN SEL FURTHER SUBMITTED THAT THE AMOUNT OF RS. 69,15,297/ - HAS BEEN INCLUDED IN THE DEDUCTION OF RS. 1,03,47,573/ - CLAIMED BY THE ASSESSEE UNDER T HE HEAD ONE TIME SETTLEMENT. 8. WE HAVE HEARD THE PARTIES AND ALSO GONE THROUGH THE ORDERS PASSED BY THE AUTHORITIES BELOW. WE NOTICE THAT DURING THE ASSESSMENT PROCEEDINGS, THE AO BROUGHT THE AFORESAID FACTS TO THE NOTICE OF THE ASSESSEE AND THE ASSESSE E ADMITTED THAT IT HA S HAPPENED DUE TO MISTAKE ON ITS PART AND THE AMOUNT OF RS. 69,15,297/ - SHOULD BE ADDED TO THE TOTAL INCOME. SINCE, THE LD. CIT (A) HAS WRONGLY ALLOWED THE DEDUCTION OF RS. 69,15,297/ - TWICE, THE SAME AMOUNTS TO DOUBLE DEDUCTION. THER EFORE, THE IMPUGNED ORDER IS ERRONEOUS AND LIABLE TO BE SET ASIDE. WE ACCORDINGLY ALLOW THE APPEAL OF THE REVENUE AND SET ASIDE THE ORDER PASSED BY THE LD. CIT (A). 4 ITA NO. 313 / NAG /2015 ASSESSMENT YEAR: 2012 - 1 3 IN THE RESULT, APPEAL FILED BY THE REVENUE FOR A SSESSMENT YEAR 2012 - 2013 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JUNE , 2018 . SD/ - SD/ - ( SHAMIM YAHYA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPU R, DATED: 20 / 0 6 /201 8 ALINDRA, PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) 4. CIT 5. DR, ITAT, NAGPUR 6. GUARD FILE . BY ORDER, //TRUE COPY// ( SR. PS/PS ) ITAT, NAGPUR