MAHANAGAR CO OP BANK LTD, MUMBAI V. ACIT 1(3), MUMBAI

ITA 4889/MUM/2013

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2885 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Assessee Lawyers: NEHA SHARMA LD
• Keywords: Opportunity of being heard; Principle of natural justice; Advance ruling; Bad and doubtful debts
• Section: 143(3)

Judgement Text

ITA.NO.4889/MUM/2013 MAHANAGAR CO-OPERATIVE BANK LTD. ASSESSMENT YEAR 2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.4889/MUM/2013 ( / ASSESSMENT YEAR: 2007-08) THE MAHANAGAR CO - OP BANK LT D GROUND FLOOR HIRAMANI SUPER MARKET DR. B.A. ROAD, LALBAUG MUMBAI-400 012 / VS. ASSISTANT COMMISSIONER OF INCOME TAX-1(3) AAYKAR BHAVAN, M.K.ROAD MUMBAI-400 020 ./ ./PAN/GIR NO. AAAAM-3138-Q ( ' /APPELLANT ) : ( #$ ' / RESPONDENT ) ASSESSEE BY : NEHA SHARMA, LD. AR REVENUE BY : D.G.PANSARI, LD. DR / DATE OF HEARING : 18/10/2018 / DATE OF PRONOUNCEMENT : 02/11/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2007-08 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-7 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-7/IT-358/12-13 DATED 06/11/2012 QUA CONFIRMATION OF DISALLOWANCE U/S 36(1)(VIIA) FOR R S.39.24 LACS. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. ASSISTANT ITA.NO.4889/MUM/2013 MAHANAGAR CO-OPERATIVE BANK LTD. ASSESSMENT YEAR 2007-08 2 COMMISSIONER OF INCOME TAX-1(3), MUMBAI [AO] U/S 143(3) ON 27/11/2009 WHEREIN THE ASSESSEE HAS BEEN SADDLED WI TH IMPUGNED DISALLOWANCE OF RS.39.24 LACS U/S 36(1)(VIIA) AND T HE SAME IS THE SOLE SUBJECT MATTER OF PRESENT APPEAL. THE ASSESSEE COMP ANY IS A BANKING INSTITUTION. 2. THE REGISTRY HAS NOTED A DELAY OF 81 DAYS IN FIL ING OF THE APPEAL, THE CONDONATION OF WHICH HAS BEEN SOUGHT VIDE APPLI CATION DATED 24/06/2013 WHICH IS SUPPORTED BY THE AFFIDAVIT OF SHRI RAHUL MESTRY, AN EMPLOYEE OF THE CHARTERED ACCOUNTANTS FIRM HANDLING TAX MATTERS FOR THE ASSESSEE. UPON PERUSAL OF THE SAME, WE FIND THAT TH E CONDONATION HAS BEEN SOUGHT ON MEDICAL GROUNDS. KEEPING IN VIEW THE PRINCIPLE OF NATURAL JUSTICE AND THE QUANTUM OF DELAY, WE ARE INCLINED T O CONDONE THE SAME AND THEREFORE, PROCEED TO DISPOSE-OFF THE SAME ON M ERITS. 3. THE PERUSAL OF QUANTUM ASSESSMENT ORDER REVEAL T HAT THE CLAIM OF THE ASSESSEE HAS BEEN DENIED BY LD. AO ON THE PREMI SE THAT NO SUCH PROVISIONS FOR BAD AND DOUBTFUL DEBTS WAS ACTUALLY CREATED BY THE ASSESSEE BY WAY OF DEBIT TO PROFIT & LOSS ACCOUNT. AGGRIEVED, THE ASSESSEE AGITATED THE SAME WITHOUT ANY SUCCESS BEFO RE LD. CIT(A) VIDE IMPUGNED ORDER DATED 06/11/2012 WHEREIN THE ASSESSE E, RELYING ON THE DECISION OF AUTHORITY FOR ADVANCE RULING RENDERED IN RURAL ELECTRIFICATION CORPORATION LIMITED [2009 312 ITR 122] AGITATED THE STAND OF LD.AO. HOWEVER, THE SAME COULD NOT FIND FAVOR WITH FIRST A PPELLATE AUTHORITY AND THE DISALLOWANCE WAS CONFIRMED. AGGRIEVED, THE ASSE SSEE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. AUHTORIZED REPRESENTATIVE FOR ASSESSEE [ AR], MS. NEHA SHARMA, DRAWING OUR ATTENTION TO THE DOCUMENTS PLACED IN TH E PAPER- ITA.NO.4889/MUM/2013 MAHANAGAR CO-OPERATIVE BANK LTD. ASSESSMENT YEAR 2007-08 3 BOOK SUBMITTED THAT THE PROVISION OF RS.45 LACS WAS CREA TED BY THE ASSESSEE BY WAY OF DEBIT TO PROVISION FOR ACCRUED INTEREST ON STANDARD ASSETS [ASSETS PROVISIONS]. THE ASSETS PROVISION WAS CREATED YEAR TO YEAR BY APPROPRIATION OF PROFITS AND THEREFORE, THE PROVISION FOR DOUBTFUL DEBTS WAS NOT DEBITED TO THE PROFIT & LOSS ACCOUNT . NEVERTHELESS, THE ASSESSEE WAS ENTITLED TO CLAIM THE SAME @7.5% OF TO TAL INCOME AND THEREFORE, THE FINDINGS OF THE LOWER AUTHORITIES WE RE FACTUALLY INCORRECT. OUR ATTENTION HAS ALSO BEEN DRAWN TO THE FAVORABLE DECISION OF AUTHORITY FOR ADVANCE RULING IN SIMILAR CIRCUMSTANCES. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE [DR], SHRI D.G.PANSARI SUBMITTED THAT THE ONUS TO DEMONSTRATE THE SAME RESTED WITH THE ASSESS EE AND IT REQUIRES APPRECIATION BY LOWER AUTHORITIES. 5. WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING DOCUMENTS PLACED IN TH E PAPER-BOOK. UPON PERUSAL OF THE ACCOUNTS / LEDGER EXTRACTS SUBMITTED BEFORE US, PRIMA FACIE, IT APPEARS THAT THE PROVISION FOR DOUBTFUL DEBTS W AS CREATED BY THE ASSESSEE DURING IMPUGNED AY, ALTHOUGH NOT BY WAY OF DIRECT DEBIT TO PROFIT & LOSS ACCOUNT BUT OUT OF PROVISION FOR ACCRUED INTEREST ON STANDARD ASSETS. IN THE LIGHT OF AFORESAID FACT WHICH WAS NOT CONSID ERED BY LOWER AUTHORITIES, WE DEEM IT FIT TO RESTORE THE MATTER BACK TO THE FILE OF LD. AO FOR RE-APPRECIATION OF FACTUAL MATRIX AND RE -ADJUDICATE THE SAME AS PER LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, WHO, IN TURN, IS DIRECTED TO SUBSTANTIATE HIS CLAIM IN THIS REGARD. 6. FOR STATISTICAL PURPOSES, THE APPEAL STANDS ALLO WED. ITA.NO.4889/MUM/2013 MAHANAGAR CO-OPERATIVE BANK LTD. ASSESSMENT YEAR 2007-08 4 ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND NOVEMBER, 2018. SD/- SD/- (MAHAVIR SINGH) ( MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 02/11/2018 SR.PS:-THIRUMALESH/JV, SR.PS ! / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$ ' / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. +,#&- , - , / DR, ITAT, MUMBAI 6. ,./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI