Amreli Jilla Madhyasth Sahakari Bank Ltd., AMRELI V. The Deputy Commissioner of Income Tax, Circle-2, JUNAGADH

ITA 359/RJT/2013

• Counselvise Citation: 35924914 RSA 2013
• Duration Of Justice: 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 11-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J B JHAVERI D R
• Assessee Lawyers: DM RINDANI
• Keywords: Gift; Opportunity of being heard

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. BEFORE SHRI T. K. SHARMA JM AND SHRI B. R. JAIN AM ITA NO. 359/RJT/2013 / ASSESSMENT YEAR 2010-11. AMRELI JILLA MADHYASTH SAHAKARI BANK LTD. BHOJALRAM BHAVAN, RAJMAHEL ROAD, AMRELI. PAN : AAATA2737J ( / APPELLANT V/S THE DEPUTY CIT, JUNAGADH, CIRCLE-2, JUNAGADH. / RESPONDENT ! ' #$ / ASSESSEE BY SHRI D.M. RINDANI, C.A. % ! ' #$ / REVENUE BY SHRI J.B. JHAVERI, D.R. # & ' ! ( / DATE OF HEARING 31-12-2013 ) ! ( / DATE OF PRONOUNCEMENT 31 - 12-2013 / ORDER B. R. JAIN, A. M. : THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATE D 21/08/2013 OF DR. K. SHRINIWAS REDDY, LEARNED CIT(A)-IV, RAJKOT RAISES T HE SOLITARY GROUND AS UNDER:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-IV, RAJKOT, ERRED IN CONFIRMING THE DISALLOWANCE OF CLAIM OF TH E APPELLANT OF RS. 19,25,000/- BY WAY OF EXPENDITURE ON GIFTS TO MEMBE RS AND DIRECTORS. 2. HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECO RD. THE APPELLATE TRIBUNAL BY ITS ORDER DATED 25/10/2013 IN ASSESSEES OWN CAS E FOR THE ASSESSMENT YEAR 2009-10 IN ITA NO. 39/RJT./2013 REMITTED THE MATTER BACK TO THE FILE OF THE A.O. FOR TAKING A DECISION IN THE MATTER AFRESH IN ACCORDANC E WITH THE LAW. THE OPERATIVE PORTION OF THE ORDER AS CONTAINED IN PARA 17 OF THE SAID ORDER AS REPRODUCED AS UNDER:- 17. IT IS QUITE EVIDENT THAT GIFT IN THE FORM OF CASH I S COMPLETELY PROHIBITED. IT IS ALSO APPARENT FROM THE CIRCULAR T HAT THERE CAN BE NO DISTRIBUTION OF GIFTS WITHOUT PRIOR APPROVAL IN THE ANNUAL GENERAL MEETING. THE ASSESSEE HAS NOT PLACED ANY MATERIAL BEFORE US AS TO SHOW AS TO HOW THE CONDITIONS LAID DOWN IN THE AFORESAID CIRCULAR ISSUED BY THE REGISTRAR OF CO-OPERATIVE SOCIETIES ARE FULFILLED. ON THE OTHER HAND, PERUSAL OF THE ANNEXURE-D (FORMING PART OF TAX AUDIT REPORT IN FOR M NO. 3CD) SHOWS ITA 359/RJT/2013 2 THAT A SUM OF RS. 3000/- HAS BEEN PAID TO EACH OF T HE 24 DIRECTORS. THEREFORE, THE OBSERVATIONS MADE BY THE ASSESSING O FFICER THAT THE GIFTS HAVE BEEN GIVEN TO THE DIRECTORS IN CASH CANNOT BE SAID TO BE INCORRECT. IN FACT, THE OBSERVATIONS MADE BY THE LD. CIT(A) THAT THE GIFTS HAVE NOT BEEN GIVEN TO THE DIRECTORS IN CASH ARE NOT SUPPORTED BY ANNEXURE-D (FORMING PART OF TAX AUDIT REPORT IN FORM NO. 3CD). SIMILARL Y, THE ASSESSEE HAS NOT FILED THE RELEVANT RESOLUTION INDICATING THE PR IOR APPROVAL OF THE ANNUAL GENERAL MEETING FOR DISTRIBUTION OF GIFTS TO THE ME MBERS. IN THIS VIEW OF THE MATTER, THE ORDER PASSED BY THE LD. CIT(A) IS NOT S USTAINABLE ON FACTS. THE FACTS RECORDED BY THE LD. CIT(A) NEED TO BE RELOOKE D AND VERIFIED. THE MATTER IS THEREFORE RESTORED TO HIS FILE FOR EXAMIN ING THE ISSUE STRICTLY ACCORDING TO AFORESAID CIRCULAR ISSUED BY THE REGIS TRAR, COOPERATIVE SOCIETIES. HE WILL DECIDE THE MATTER AFRESH IN ACCO RDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO BOTH TH E PARTIES. GROUND NO. 2 TAKEN BY THE REVENUE IS TREATED AS ALLOWED FOR STAT ISTICAL PURPOSES. 3. SINCE THE FACTS CONTENDED ARE SIMILAR AND THERE IS NO CHANGE IN LAW, WE SET ASIDE THE ORDER OF LD. CIT(A) FOR THE IMPUGNED YEAR AND REMIT THE MATTER BACK TO THE A.O. FOR TAKING DECISION AFRESH IN ACCORDANC E WITH LAW. HE SHALL, HOWEVER, HAVE REGARD TO THE TRIBUNAL ORDER IN ASSESSEES OWN CASE IN THE EARLIER YEAR ALSO. REASONABLE AND EFFECTIVE OPPORTUNITY OF BEING HEARD SHALL BE AFFORDED BEFORE TAKING FINAL DECISION IN THE MATTER. 4. IN THE RESULT, APPEAL BY ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 31/12/2013. SD/- SD/- ( T. K. SHARMA ) ( B. R. JAIN ) #*% /JUDICIAL MEMBER $( #*% / ACCOUNTANT MEMBER *$+ ,*-/ ORDER DATE 31/12/2013 /RAJKOT *RANJAN / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- AMRELI JILLA MADHYASTH SAHAKARI BANK L TD., AMRELI . 2. /RESPONDENT-THE DEPUTY CIT, CIRCLE-2, JUNAGADH. 3. #-2- & 3 / CIT-I, RAJKOT. 4. & 3 - / CIT (A)-IV, RAJKOT. ITA 359/RJT/2013 3 5. 789 , , / DR, ITAT, RAJKOT 6. 9; <= / GUARD FILE. TRUE COPY *$+ #$ / BY ORDER , PRIVATE SECRETARY, , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.