The Kottakkal Co-op Urban Bank Ltd, Malappuram V. ACIT, Tirur

ITA 364/COCH/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2573 (ITAT-COCHIN)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 17-12-2012
• Court: TRIBUNAL
• Department Lawyers: SUSAN VARGHESE GEORGE
• Assessee Lawyers: MOHAN PULICKKAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Bad and doubtful debts; Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NOS. 364 & 365 /COCH/2012 ASSESSMENT YEARS : 2008-09 & 2009-10 THE KOTTAKKAL CO-OP URBAN BANK LTD., KOTTAPPADI, KOTTAKKAL, MALAPPURAM-676503. [PAN:AAALK 0050C] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-2(2), TIRUR. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI MOHAN PULICKKAL, ADV. REVENUE BY SMT. SUSAN VARGHESE GEORGE, SR. DR DATE OF HEARING 26/03/2013 DATE OF PRONOUNCEMENT 07/06/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTE D AGAINST THE COMMON ORDER DATED 09-10-2012 PASSED BY LD CIT(A)-II, KOZHIKODE AND THEY RELATE TO THE ASSESSMENT YEARS 2008-09 AND 2009-10. SINCE IDENTICAL ISSUES WERE URGED IN THESE APPEALS, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2. IN BOTH THE YEARS UNDER CONSIDERATION, THE ASSES SEE CLAIMED DEDUCTION U/S 36(1)(VIIA) OF THE ACT TOWARDS PROVISION FOR BAD AN D DOUBTFUL DEBTS AT 7.5% OF THE GROSS TOTAL INCOME PLUS 10% OF THE AGGREGATE AVERAGE ADVA NCES MADE BY RURAL BRANCHES. THE AO DISALLOWED THE CLAIM OF DEDUCTION OF 10% OF THE AGGREGATE AVERAGE ADVANCES IN BOTH THE YEARS ON THE REASONING THAT NONE OF THE BR ANCHES OF THE ASSESSEE COULD BE CLASSIFIED AS RURAL BRANCH AS PER THE DEFINITION GIVEN IN SEC. 36(1)(VIIA) OF THE ACT. THE AO FURTHER NOTICED THAT THE ASSESSEE DID NOT CREATE ANY PROVISION IN THE BOOKS OF I.T.A. NOS. 364 & 365/COCH/2012 2 ACCOUNT IN RESPECT OF CLAIM OF PROVISION FOR BAD A ND DOUBTFUL DEBTS AND HENCE HE DISALLOWED THE CLAIM OF 7.5% OF GROSS TOTAL INCOME ALSO IN BOTH THE YEARS. THE LD CIT(A) ALSO CONFIRMED THE ORDER OF THE AO, BY FOLLO WING THE ORDER PASSED BY HIS PREDECESSOR IN THE ASSESSEES OWN CASE. 3. WE HAVE HEARD THE PARTIES ON THIS ISSUE. WE NOTICE THAT THIS BENCH OF THE TRIBUNAL HAS CONSIDERED BOTH THE ISSUES, I.E., (A) DISALLOWA NCE OF CLAIM OF 7.5% OF GROSS TOTAL INCOME IN VIEW OF NOT CREATING PROVISION IN BOOKS O F ACCOUNT AND (B) THE DISALLOWANCE OF CLAIM OF 10% OF AGGREGATE AVERAGE ADVANCES MADE BY THE RURAL BRANCHES, IN THE ASSESSEES OWN CASE IN ITA NO. 369/COCH/2011 AND TH E TRIBUNAL, VIDE ITS ORDER DATED 16-11-2012, HAS DECIDED BOTH THE ISSUES AGAINST THE ASSESSEE. WE ALSO NOTICE THAT THE SAID DECISION IS REPORTED IN 142 ITD 123. HENCE, B Y FOLLOWING THE SAID DECISION, WE AFFIRM THE ORDER OF LD CIT(A) ON BOTH THE ISSUES IN BOTH THE YEARS. 4. IN ASSESSMENT YEAR 2008-09, THE ASSESSEE HAS RAISED ONE MORE ISSUE RELATING TO THE DISALLOWANCE OF CLAIM OF PREMIUM PAID ON PURCHA SE OF GOVERNMENT SECURITIES. THE CLAIM MADE BY THE ASSESSEE WAS DISALLOWED BY THE AO ON THE GROUND THAT THE PREMIUM PAID ON PURCHASE OF A CAPITAL ASSET CONSTITUTES CAP ITAL EXPENDITURE. THE SAID VIEW OF THE AO WAS UPHELD BY THE LD CIT(A). 5. WE NOTICE THAT THIS BENCH OF THE TRIBUNAL CON SIDERED AN IDENTICAL ISSUE IN THE CASE OF CATHOLIC SYRIAN BANK IN ITA NO.545/COCH/2011 REL ATING TO THE ASSESSMENT YEAR 2007- 08 AND THE TRIBUNAL, VIDE ITS ORDER DATED 08-03-201 3 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. FOR THE SAKE OF CONVENIENCE WE EXTRA CT BELOW THE RELEVANT OBSERVATIONS MADE BY THE TRIBUNAL IN THE ABOVE CITED CASE:- 15. THE ASSESSING OFFICER DISALLOWED THE ABOVE SA ID CLAIM BY HOLDING THAT THE PREMIUM GIVEN BY THE ASSESSEE AT THE TIME OF PURCHA SING PERMANENT CATEGORY OF INVESTMENT IS CAPITAL IN NATURE. HOWEVER, THE L D. CIT(A) GRANTED RELIEF BY FOLLOWING THE DECISION OF THE TRIBUNAL PASSED IN AS SESSEES OWN CASE IN I.T.A. NO. 106/COCH/2009 RELEVANT TO THE ASSESSMENT YEAR 1996-97. THE REVENUE IS ASSAILING THE SAID DECISION OF LD CIT(A). WE NOTIC E THAT THIS BENCH OF THE TRIBUNAL CONSIDERED AN IDENTICAL ISSUE IN THE ASSES SEES OWN CASE IN ITA NO.74/COCH/2011 RELATING TO THE ASSESSMENT YEAR 200 6-07 AND THE TRIBUNAL, VIDE I.T.A. NOS. 364 & 365/COCH/2012 3 ITS ORDER DATED 05-07-2012, DECIDED THE ISSUE IN FA VOUR OF THE ASSESSEE. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT OBSERVATIONS MADE BY THE TRIBUNAL IN THE ABOVE SAID ORDER. 6. THE ASSESSEE HAS FILED A COPY OF ORDER DATE D 11-02-2011 PASSED BY THE CO-ORDINATE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS. 10 & 66/COCH/2009 RELATING TO THE ASSESSMENT YEAR 2005-0 6. IN PARAGRAPHS 11 AND 12 OF THE SAID ORDER, THE TRIBUNAL HAS CONSIDER ED AN IDENTICAL ISSUE AND UPHELD THE VIEW TAKEN BY THE LD CIT(A) IN THAT YEAR, BY FOLLOWING THE DECISION RENDERED BY THE TRIBUNAL IN ITA NO.106/COC H/2009 REFERRED SUPRA. SINCE THE TRIBUNAL IS TAKING A CONSISTENT V IEW IN THE IMPUGNED ISSUE AND SINCE THE DECISION RENDERED BY THE LD CIT (A) IS IN ACCORDANCE WITH THE SAID VIEW, WE DO NOT FIND ANY REASON TO IN TERFERE WITH HIS DECISION ON THIS ISSUE. THUS, WE NOTICE THAT THE TRIBUNAL IS CONSISTENTLY T AKING THE DECISION ON THIS ISSUE IN FAVOUR OF THE ASSESSEE. WE ALSO NOTICE THAT THE LD CIT(A) HAS FOLLOWED THE ORDERS PASSED BY THE TRIBUNAL IN THE HANDS OF THE ASSESSEE IN EARLIER YEARS IN ITA NO.10/COCH/2009 DATED 11.02.2011 FOR ASSESSMENT YEAR 2005-06 AND IN ITA NO.106/COCH/2004 RELATING TO THE ASSESSMENT YEAR 19 96-97. IT CAN BE SEEN THAT THE TRIBUNAL IS CONSISTENTLY HO LDING THAT THE AMORTISATION OF PREMIUM PAID ON PURCHASE OF GOVERNMENT SECURITIES IS REVENU E EXPENDITURE. CONSISTENT WITH THE VIEW TAKEN IN THE CASE OF CATHOLIC SYRIAN BANK, REF ERRED SUPRA, WE ALSO HOLD THAT THE AMORTISATION OF PREMIUM PAID ON PURCHASE OF GOVERNM ENT SECURITIES IS ALLOWABLE AS REVENUE EXPENDITURE. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED DISALLOWANCE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE FOR ASSESSMENT YEAR 2008-09 IS PARTLY ALLOWED AND THE OTHER APPEAL OF THE ASSESSEE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 07-06-2 013. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 7TH JUNE, 2013 I.T.A. NOS. 364 & 365/COCH/2012 4 GJ COPY TO: 1. THE KOTTAKKAL CO-OP URBAN BANK LTD., KOTTAPPADI, KOTTAKKAL, MALAPPURAM-676503. . 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -2(2), TIRUR. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, KOZH IKODE. 4.THE COMMISSIONER OF INCOME-TAX, KOZHIKODE. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN