ACIT CIR. 4, THANE, THANE V. VASAI VIKAS SAHAKARI BANK LIMITED, VASAI

ITA 5050/MUM/2016

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5972 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 08-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; TDS; Set aside
• Section: 43B; 64; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO. 5050/MUM/2016 ASSESSMENT YEAR : 2008-09 ASST. COMMISSIONER OF INCOME TAX, CIRCLE-4, THANE VS. VASAI VIKAS SAHAKARI BANK LIMITED, SAMAJ MANDIR, OPP: NEW ENGLISH HIGH SCHOOL, PARNAKA, VASAI (W) [PAN : AAAAV 0519 Q] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUHAS KULKARNI, DR RESPONDENT BY : SHRI BHUPENDRA SHAH, AR DATE OF HEARING : 24-12-2018 DATE OF PRONOUNCEMENT : 28-12-2018 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-3, THANE, DATED 25-05-2016. REVENUE HAS RAISED THE FOLLOWING G ROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A)-3, THANE ERRED IN DELETING THE ADDITION OF RS. 30,000/- ITA NO. 5050/MUM/2016 : 2 : MADE ON ACCOUNT OF STATE EDUCATION FUND, RS. 11,00, 000/- ON ACCOUNT OF DEPRECIATION ON GOVT. SECURITIES, RS. 6,00,000/- ON ACCOUNT OF STATUTORY AUDIT FEES AND RS. 29,99,072/- ON ACCOUNT OF BONUS PAYABLE. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CI T(A)-3, THANE, MAYBE SET ASIDE AND THAT OF THE ASSESSING OFFICER B E RESTORED. GROUND NO. 3 IS GENERAL IN NATURE. 2. THE ISSUE IN THE 1 ST GROUND OF APPEAL IS AGAINST THE VARIOUS ADDITIONS NAMELY OF RS. 30,000/- ON ACCOUNT OF STATE EDUCATION FUND, RS. 11,00,000/- ON ACCOUNT OF DEPREC IATION ON GOVT. SECURITIES, RS. 6,00,000/- ON ACCOUNT OF STATUT ORY AUDIT FEES AND RS. 29,99,072/- ON ACCOUNT OF BONUS PA YABLE. 3. THE FACTS IN BRIEF ARE THAT THE PRESENT PROCEEDINGS A RE SET ASIDE PROCEEDINGS IN CONSEQUENCE OF REVISIONARY ORDER U/S. 263 OF THE INCOME TAX ACT (ACT) PASSED BY THE PR.CIT. IN THE SET ASIDE PROCEEDINGS, THE AO ADDED RS. 1,14,30,000/ - COMPRISING STUDENT EDUCATION FUND OF RS. 30,000/-; DEPRECIATION ON GOVT. SECURITIES OF RS. 11,00,000/-; B ONUS OF RS. 31,00,000/-; STATE AUDIT FEES OF RS. 6,00,000/- AN D PROVISIONS FOR LEAVE ENCASHMENT OF RS. 66,00,000/- O N THE GROUND THAT ASSESSEE HAS NOT SUBMITTED ANY NEW MATERIALS/EVIDENCES BEFORE THE AO AND HAS MERELY STA TED THAT ITA NO. 5050/MUM/2016 : 3 : ALL THE SUBMISSIONS MADE BEFORE THE CIT IN THE PROCEE DINGS U/S. 263 OF THE ACT MAY BE TREATED AS REPLY TO AO FOR THE QUERIES IN ASSESSMENT PROCEEDINGS. 4. LD. CIT(A) PARTLY DELETED THE ADDITIONS MADE BY THE AO FOR WHICH THE REVENUE IS IN APPEAL WHEREAS THE ASSESS EE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF LD CIT(A). WHILE PARTLY ALLOWING THE APPEAL THE LD CIT(A) OBSERVED G AN D HELD AS UNDER: (I) I HAVE CAREFULLY CONSIDERED THE SUBM ISSIONS OF THE APPELLANT, THE OBSERVATIONS OF THE AO IN THE ASS ESSMENT ORDER, CASE LAWS RELIED UPON BY THE APPELLANT AND THE FACTS OF THE CASE, AND THEREFORE, I PROCEED TO DECIDE THE APPEAL OF THE AP PELLANT. (II) THE PROVISION OF STATE EDUCATION FUND OF RS.30 ,000/- HAS BEEN DISCUSSED AT PAGE 20 OF THE PAPER BOOK, WHICH IS PA ID ON 29.05.2008 AND THE SAME DOES NOT FALL UNDER SECTION 43B OF THE ACT. THEREFORE, THE ADDITION/DISALLOWANCE MADE BY THE AO IS DELETED . (III) DEPRECIATION OF GOVT. SECURITY OF RS.11,00,00 0/- IS AN ALLOWABLE DEDUCTION IN VIEW OF THE DECISION IN THE CASES (PAPER BOOK PAGES 22 TO 38) OF DCIT VS. KALLAPPANNA AWADE ICHAL KARANJI JANATA IN ITA NO.449/PN/2012 A.Y. 2008-09 ORDER DATED 05.0 8.2013 & SUVARNYUG SAHKARI BANK LTD. VS. ACIT IN ITA N0.1668 /PN/2012 A.Y.2008-09 ORDER DATED 29.10.2013. THEREFORE, THE ADDITION/DISALLOWANCE MADE BY THE AO IS DELETED. (IV) AUDIT FEES OF RS.6,00,000/-PAID TO AUDITORS IS NOT A STATUTORY FEES, THEREFORE, THE PROVISION OF SECTION 43B DO NO T ATTRACT IN THIS CASE AND THE SAME IS DECIDED IN FAVOUR OF THE APPELLANT IN VIEW OF THE DECISION IN THE CASE OF CIT VS. SHREE WARNA SAHAKAR I SAKHAR (2002) 173 CTR 188(BOM) ORDER DATED 23.07.2001, THE APPELL ANT HAS CLAIM THE DEDUCTION ON ACCRUAL BASIS AND PAID SUBSEQUENTL Y BY DEDUCTING TDS, THEREFORE, THE ADDITION MADE BY THE AO IS DELE TED. ITA NO. 5050/MUM/2016 : 4 : V) OUT OF RS.31,00,000/- BONUS PAYABLE, THE DETAILS OF BONUS PAID OF RS,29,99,072/- UPTO FILING OF THE RETURN HA S BEEN DISCUSSED AT PAGE 52 OF THE PAPER BOOK AND THE BALANCE AMOUNT OF RS.1,00,928/- HAS NOT BEEN PAID. THEREFORE, THE ADD ITION OF RS.29,99,072/- IS DELETED AND THE BALANCE AMOUNT OF RS. 1,00,928/- IS CONFIRMED. VI) THE APPELLANT HAS CLAIMED THAT, OUT OF LEAVE EN CASHMENT OF RS.66,00,000/-, THE AMOUNT OF RS.12,68,780/- HAS BE EN PAID AS DISCUSSED AT 64 OF THE PAPER BOOK, HOWEVER, ON PERU SAL OF THE DETAILS, THE AND SUBMISSION OF THE AR OF THE APPELL ANT IS NOT ACCEPTED BECAUSE THE PAYMENTS WERE MADE AFTER THE RETURN OF INCOME WAS FILED ON 30.09.2008, THEREFORE, THE ADDITION OF RS. 66,00,000/- MADE BY THE AO U/S. 43B OF THE ACT IS SUSTAINED. 4.1. FINALLY LD. CIT(A) PARTLY ALLOWED THE APPEAL OF ASSESSEE BY SUSTAINING THE ADDITION TO THE EXTENT OF RS. 67,00,928/ - AND ALLOWING THE RELIEF OF RS. 47,29,072/-. 5. LD. DR RELIED HEAVILY ON THE ORDER OF AO, WHEREA S THE LD. AR SUPPORTED THE WELL REASONED AND SPEAKING ORDER OF CIT(A). 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATE RIAL ON RECORD, INCLUDING THE IMPUGNED ORDER PASSED BY THE CIT(A), WE OBSERVE THAT IN THIS CASE LD. CIT(A) HAS GIVEN A CL EAR-CUT FINDING ON EACH AND EVERY ISSUE. I. ON THE ISSUE OF PROVISION OF STATE EDUCATION FUND OF RS. 30,000/-, CIT(A) OBSERVED THAT THE SAME WAS PAID ON ITA NO. 5050/MUM/2016 : 5 : 29-05-2008 AND DOES NOT FALL UNDER THE PROVISIONS OF SECTION 43B OF THE ACT. II. SIMILARLY, DEPRECIATION ON GOVERNMENT SECURITIES, IT IS THE STOCK-IN-TRADE IN THE CASE OF BANK, WHICH IS ALLOWA BLE DEDUCTION IN VIEW OF THE DECISION OF DCIT VS. KALLAPP ANNA AWADE ICHALKARANJI JANATA IN ITA NO. 449/PN/2012, AY . 2008-09, ORDER DT. 05-08-2013 & SUVARNYUG SAHKARI B ANK LTD., VS. ACIT IN ITA NO. 1668/PN/2012, AY. 2008-09, ORDER DT. 29-10-2013, THEREFORE, THE SAME IS ALLOWABLE. III. ON THE ISSUE OF AUDIT FEES OF RS. 6,00,000/- PA ID TO AUDITORS IS NOT A STATUTORY FEES, THEREFORE, THE PROVISI ONS OF SECTION 43B DO NOT ATTRACT IN THIS CASE AND THE SAME IS DECIDED IN FAVOUR OF ASSESSEE IN VIEW OF THE DECISIO N IN THE CASE OF CIT VS. SHREE WARNA SAHAKARI SAKHAR [173 CT R 188] (BOM). IV. ON THE ISSUE OF BONUS OUT OF RS. 31,00,000/- BO NUS PAYABLE, THE DETAILS OF BONUS PAID OF RS. 29,99,072/- UPTO FILING OF THE RETURN HAS BEEN DISCUSSED IN THE PAPER B OOK AND THE BALANCE AMOUNT OF RS. 1,00,928/- HAS NOT BE PAID, WHICH WAS VERIFIED BY THE LD. CIT(A). THEREFORE, THE ADDITI ON OF RS. ITA NO. 5050/MUM/2016 : 6 : 29,99,072/- IS DELETED AND THE BALANCE AMOUNT OF RS. 1,00,928/- IS CONFIRMED. 6.1. SINCE THE LD CIT(A) HAS PASSED A VERY REASONED AN SPEAKING ORDER ON VARIOUS ISSUES RAISED BY THE REVEN UE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS G IVEN BY THE LD. CIT(A). GROUNDS RAISED BY REVENUE ARE DISMI SSED. 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH DAY OF DECEMBER, 2018 SD/- SD/- (AMARJIT SINGH) (RAJESH KUMAR) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /MUMBAI; /DATED : 28 TH DECEMBER, 2018 TNMM ITA NO. 5050/MUM/2016 : 7 : / COPY OF THE ORDER FORWARDED TO : 1. !' / THE APPELLANT 2. #!' / THE RESPONDENT 3. $ % ( ) / THE CIT(A), MUMBAI 4. $ % / CIT, MUMBAI 5. ()* +, , $ .+,$/ , / DR, ITAT, MUMBAI 6. *012 / GUARD FILE $ / BY ORDER, # //TRUE COPY// / $ (DY./ASST. REGISTRAR) $ .+,$/, / ITAT, MUMBAI