THE INCOME TAX DEPARTMENT CO OPERATIVE BANK LTD, MUMBAI V. DCIT 1(3), MUMBAI

ITA 5240/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9736 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 05-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VIDHAYADHAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'I' BENCH, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.5240 /MUM/2015 (ASSESSMENT YEAR: 2011-12) THE INCOME TAX DEPARTMENT VS. DY. C.I.T. 1(3)(1) COOPERATIVE BANK LTD. G-4, ANDHERI LAXMI SOCIETY J.B. NAGAR, ANDHERI (E) MUMBAI 400059 [ERSTWHILE DCIT (1)(3)] MUMBAI PAN AAAAI1844H APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI V. VIDHAYADHAR DATE OF HEARING: 06.09.2017 DATE OF PRONOUNCEMENT: 11.09.2017 O R D E R PER P.K. BANSAL, VICE PRESIDENT THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-3, MUMBAI DATED 12.08.2015 FOR A.Y. 2011-12. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO T HE CLAIM OF DEDUCTION IN RESPECT OF PROVISION FOR STATUTORY AUD IT FEES AMOUNTING TO RS.2,68,650/-. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY C ONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES B ELOW. WE NOTED THAT DURING THE YEAR THE ASSESSEE HAS DEBITED A SUM OF R S.3,15,000/- TO THE P & L ACCOUNT BEING THE PROVISION FOR AUDIT FEES. THI S PROVISION INCLUDES THE PAYMENT OF STATUTORY AUDIT FEES AS WELL AS TAX AUDI T FEES AS PER THE BILLS PROVIDED. THE AO ALLOWED DEDUCTION IN RESPECT OF A SUM OF RS.46,350/- BUT DISALLOWED THE BALANCE AMOUNT AMOUNTING TO RS.2,68, 650/- HOLDING THAT THE EXPENDITURE HAS NOT BEEN CRYSTALLISED DURING TH E YEAR. WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ORDER OF THE AO AS IN HIS OPINION THE ASSESSEE COULD NOT GIVE PROPER E XPLANATION. WE NOTED ITA NO. 5240/MUM/2015 THE INCOME TAX DPTT. CO-OP. BANK LTD. 2 THAT THE AMOUNT REPRESENT STATUTORY AUDIT FEES AS W ELL AS TAX AUDIT FEES AS PER THE BILLS. SINCE THE BILLS RELATE TO THE IMPUGN ED ASSESSMENT YEAR THEREFORE IT CANNOT BE SAID THAT THE LIABILITY HAS NOT CRYSTALLISED DURING THE YEAR. IT IS NOT DENIED THAT THE ASSESSEE HAS BEEN F OLLOWING MERCANTILE SYSTEM OF ACCOUNTING. IN VIEW OF THESE FACTS WE SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE DISALLOWANCE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH SEPTEMBER, 2017. SD/ SD/ - (PAWAN SINGH) (P.K. BANSAL) JUDICIAL MEMBER VICE PRESIDENT MUMBAI, DATED: 11 TH SEPTEMBER, 2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -3, MUMBAI 4. THE PR. CIT - 1, MUMBAI 5. THE DR, I BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.