THE MALAD SAHAKARI BANK LTD, MUMBAI V. DCIT 1(3)(2), MUMBAI

ITA 5451/MUM/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9665 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 07-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SATYANARAYN RAJA
• Keywords: Business income; Bad and doubtful debts; Set aside
• Section: 271(1)(c); 143(3); 37(1)

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE HONBLE SHRI SANDEEP GOSAIN, JM & HONBLE SHRI RAMIT KOCHAR , AM ./ I.T.A. NO . 5451/MUM/2016 , ( / ASSESSMENT YEAR: 2010 - 11 ) THE MALAD SAHAKARI BANK LTD. 6 SUJATA NIKETAN RANISATI MARG, MALAD (W), MUMBAI - 400 097 / VS. DCIT 1(3)(2) MUMBAI, PIN - ./ ./ PAN/GIR NO. A AAAT0320R ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MS. AARTI SATHE , AR / RESPONDENTBY : SH. B. SATYANARAYN RAJA , DR / DATE OF HEARING : 18/06 /201 9 / DATE OF PRONOUNCEMENT : 20.06.2019 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE PRESENT APPEAL FILED BY THE ASSESSEE IS CHALLENGING AGAINST THE ORDER OF THE LD. CIT(A) - 3, MUMBAI DATED 24.06.16 FOR AY 20 10 - 11 . 2 I.T.A. NO. 5451 /MUM/201 6 THE MALAD SAHAKARI BANK LTD. 2. THE SOLITARY GROUND RAISED BY THE ASSESSEE RELATES TO CHALLENGING THE ORDER OF LD. CIT(A) IN SUSTAINING THE LEVY OF PENALTY U/S 271(1)(C) OF THE I.T. ACT. 3. AS PER THE FACTS OF THE PRESENT CASE, THE ADDITIONS WERE MADE BY THE AO WHILE PASSING ORDER U/S 143(3) OF THE I.T. ACT ON TWO COUNTS I.E I) DISALLOWANCE OF DEDUCTION BEING 5% OF DOUBTFUL DEBTS OF RS. 75,76,011/ - AND II) BAD DEBTS WRITTEN OF F RS. 2,10,50,04 1/ - . BOTH THESE ADDITIONS WERE CHALLENGED BY THE ASSESSEE BEFORE THE LD. CIT(A). HOWEVER, LD. CIT(A) HAD DISMISSED THE APPEAL OF THE ASSESSEE AND CONSEQUENTLY, THE SAME WAS CHALLENGED BEFORE HONBLE TRIBUNAL. THE COORDINATE BENCH OF ITAT IN QUANTUM APPEAL IN ITA NO. 2579/MUM/13 AND ITA NO. 2469/MUM/14 FOR AY 2009 - 10 & 2010 - 11 HAD DEALT WITH BOTH THE GROUNDS. 4. AS FAR AS GROUND NO. 1 OF ADDITION, WHICH PERTAINS TO DISALLOWANCE OF DEDUCTION IS CONCERNED, THE TRIBUNAL IN THIS RESPECT FOUND THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 36(1)(VIIA) TO THE EXTENT OF 7.5% OF THE BUSINESS INCOME AND AS 3 I.T.A. NO. 5451 /MUM/201 6 THE MALAD SAHAKARI BANK LTD. FAR AS DOUBTFUL DEBTS AND LOSS ASSESSEE ARE CONCERNED, IT WAS HELD THAT THEY ARE NON - PERFORMING ASSETS FOR A PERIOD OF 3 YEARS, WHICH ARE ESSENTIALLY IN THE NATURE OF STICKY LOANS AND CAN BE CONSIDERED FOR ALLOWANCE U/S 37(1) OF THE ACT. THUS, CONSIDERING THOSE FACTS, THIS ISSUE WAS RESTORED BACK TO THE FILE OF AO FOR DECIDING AFRESH IN TERMS OF DIRECTIONS GIVEN BY THE TRIBUNAL. 5. AS FAR AS ADDITIONS ON ACCOUNT OF BAD DEBTS WRITTEN OFF, IN THIS RESPECT, FULL RELIEF WAS GIVEN BY THE TRIBUNAL BY DELETING THE ADDITIONS. THUS, WE ARE OF THE CONSIDERED VIEW THAT WHEN ADDITIONS IN RESPECT OF BAD DEBTS WRITTEN OFF HAS ALREADY BEEN DELETED, THEREFORE PENALTY LEVIED BY AO A ND UPHELD BY LD. CIT(A) IS NOT SUSTAINABLE IN THE EYES OF LAW AND IS THUS SET ASIDE ON THIS COUNT. 6. HOWEVER, AS FAR AS ADDITIONS ON ACCOUNT OF DEDUCTIONS BEING ON DOUBTFUL DEBTS ARE CONCERNED, THE SAME ISSUE HAS ALREADY BEEN RESTORED TO THE AO FOR FRES H DECISION. THERE FORE, IN VIEW OF THE AFORESAID ORDER OF THE TRIBUNAL AND ALSO TO SAFEGUARD THE INTEREST OF BOTH SIDE, THE PENALTY ON THIS COUNT IS SET ASIDE TO 4 I.T.A. NO. 5451 /MUM/201 6 THE MALAD SAHAKARI BANK LTD. THE FILE OF AO WITH A DIRECTION TO EXAMINE THE IMPOSITION OF PENALTY ON THE BASIS OF OUTCOME OF THE QUANTUM ADDITIONS, IF ANY, ON THE ABOVE ISSUE AND TO DECIDE AFRESH ACCORDINGLY. 7 . IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS PARTLY A LLOWED IN TERMS INDICATED ABOVE WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JUNE , 2019. SD/ - SD/ - (RAMIT KOCHAR ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 20 . 0 6 .201 9 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI