GULSHAN MERCANTILE URBAN COOPRATIVE BANK LTD., MUZAFFARNAGAR V. ACIT, CIRCLE- 1, MUZAFFARNAGAR

ITA 5481/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4612 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 28-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL
• Keywords: Opportunity of being heard; Set aside
• Section: 143(3); 14A; 201; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) (THROUGH VIDEO CONFERENCE ) BEFORE SHRI O.P.KANT, ACCOUNTANT MEMBER A ND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO. 2166/DEL./2017 A. Y. : 2012-13 ITA NO. 5481/DEL./2017 A. Y. : 2009-10 M/S. GULSHAN MERCANTILE URBAN VS. A.C. I.T., COOPERATIVE BANK LTD. CIRCLE-1 129-130C, NEW MANDI MEERUT ROAD, MUZAFFARNAGAR MUZAFFARNAGAR PAN : AAAJG0808L ITA NO. 5482/DEL./2017 A. Y. : 2014-15 M/S. GULSHAN MERCANTILE URBAN VS. A.C. I.T., COOPERATIVE BANK LTD. CIRCLE-1 129-130C, NEW MANDI MEERUT ROAD, MUZAFFARNAGAR MUZAFFARNAGAR PAN : AAAAD5431D ITA NO. 3982/DEL./2018 A. Y. : 2015-16 M/S. GULSHAN MERCANTILE URBAN VS. D.C. I.T., COOPERATIVE BANK LTD. CIRCLE-1 45B, NEW MANDI MEERUT ROAD, MUZAFFARNAGAR MUZAFFARNAGAR PAN : AAAJG0808L (APPELLANT) ( RESPONDENT) ITA NO. 2166 & ORS. 2 ASSESSEE BY : SHRI ANIL JAIN, CA REVENUE BY : SHRI ANIMA BARNWAL, SR. DR DATE OF HEARING : 27.09.2021 DATE OF ORDER : 30 .09.202 1 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER SINCE COMMON QUESTION OF FACTS AND LAW IS INVOLVED IN ALL THE AFORESAID APPEALS, THE SAME ARE TAKEN UP TOGET HER FOR DISPOSAL BY WAY OF COMPOSITE ORDER TO AVOID REPETITION OF DI SCUSSION. 2. APPELLANT, M/S. GULSHAN MERCANTILE URBAN COOPERA TIVE BANK LTD., NEW MANDI, MUZAFFARNAGAR (HEREINAFTER R EFERRED TO AS ASSESSEE) BY FILING THE AFORESAID APPEALS SOUGHT TO SET ASIDE THE IMPUGNED ORDERS DATED 30.06.2017, 06.01.2017, 30.0 6.2017 & 30.03.2018 FOR A.Y. 2009-10, 2012-13, 2014-15 & 201 5-16 RESPECTIVELY ON THE IDENTICAL GROUNDS, EXCEPT DIFFE RENCE IN FIGURES OF ADDITIONS, INTER ALIA THAT :- ITA NO. 2166/DEL/2017, A.Y. 2012-13 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE AO TO THE EXTENT OF CONFIRMING MOST OF THE ADDITIONS MADE BY THE AO MAKING THE ASSESSMENT AT THE INCOME OF RS. 1,18,31,749/- AS AGAINST THE RETURNED INCOME OF RS. 1,05,53,330/-. ITA NO. 2166 & ORS. 3 2. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 228478 ON ACCOUNT OF STANDARD AND NON-STANDARD NPA ASSETS. 3. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 217246 ON ACCOUNT OF PROVISION OF GRATUITY. 4. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 11151 ON ACCOUNT OF LOSS ON SALE OF FURNITURE AND FIXTURES. 5. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 3200/- ON ACCOUNT OF DIVIDEND RECEIVED. 6. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 329241 ON ACCOUNT OF INTEREST IN RESPECT OF ALLEGED NPA ASSETS. 7. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1035 ON ACCOUNT OF DISALLOWANCE U/S 43B. 8. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PART ADDITION U/S 14A. 3. THE ORDER OF THE A.O. IS AGAINST LAW AND FACTS OF THE CASE. 4. THE APPELLANT CRAVES THE RIGHT TO ADD, AMEND OR WITHDRAW ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE BEING A CO-OPERA TIVE BANK IS INTO THE BANKING ACTIVITIES DURING THE YEARS UNDER CONSI DERATION. ASSESSING OFFICER MADE AN ADDITION OF RS. 1,51,634/ -, RS.2,17,246/-, RS. 5,56,000/- & RS. 4,11,300/- IN A.Y. 2009-10, 2012-13, 2014-15 & 2015-16 RESPECTIVELY ON ACCOUNT OF PROVISIONS MADE BY THE ASSESSEE FOR GRATUITY U/S 2(5), 36(1)(V ), 40A(7) & 40A(9) OF THE I.T.ACT, 1961. 4. ASSESSING OFFICER MADE ADDITION OF RS. 62,315/- , RS. 32,00, RS.32,00/- & 32,00/- IN A.Y.2009-10, 2012-13, 2014- 15 & 2015-16 ITA NO. 2166 & ORS. 4 RESPECTIVELY RECEIVED BY THE ASSESSEE BANK AS DIVID END FROM UP CO- OPERATIVE FEDERATION BEING NOT ALLOWABLE U/S 80-P(4 ) FOR A.Y. 2009- 10, 2012-13, 2014-15 & 2015-16. 5. ASSESSING OFFICER MADE ADDITION OF RS. 3,29,241/ - ON ACCOUNT OF INTEREST IN RESPECT OF THE ALLEGED NPAS ASSETS IN A.Y. 2012-13 ON THE GROUND THAT NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE BANK TO PROVE THAT THE SAME HAS BECOME NPA . 6. ASSESSING OFFICER MADE DISALLOWANCE OF RS. 10,00 0/- DEBITED BY THE ASSESSEE IN P/L ACCOUNT ON ACCOUNT OF PROVIS ION FOR FBT BEING NOT ALLOWABLE U/S 40IC OF THE ACT FOR A.Y. 20 09-10. ASSESSING OFFICER ALSO MADE ADDITION OF RS. 1,50,000/- BY INV OKING PROVISIONS U/S 14A BY WAY OF DISALLOWANCE FOR EARNING EXEMPT D IVIDEND INCOME. CONSEQUENTLY, ASSESSING OFFICER FRAMED ASSE SSMENT AT RS.72,72,192/- U/S 143(3)/ 147 OF THE ACT FOR A.Y. 2009-10 AND FRAMED ASSESSMENT AT RS. 1,18,31,749/-, 1,33,93,140 /- AND 1,39,42,440/- U/S 143(3) OF THE ACT FOR A.Y. 2012-1 3, 2014-15 AND 2015-16 RESPECTIVELY. 7. ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) B Y WAY OF FILING APPEALS WHO HAVE PARTLY ALLOWED THE SAME BY PASSING SEPARATE ORDERS. FEELING AGGRIEVED ASSESSEE HAS COM E UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEALS. ITA NO. 2166 & ORS. 5 8. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO. 2166/DEL/2017, A.Y. 2012-13 9. GROUND NO. 1 IS GENERAL IN NATURE AND NEEDS NO S PECIFIC FINDINGS. GROUND NO. 2, 4, 7 & 8 OF ITA NO. 2166/DEL/2017, A.Y.2012-13 10. GROUND NO. 2, 4, 7 & 8 OF A.Y. 2012-13 HAVE NOT BEEN PRESSED BY THE LD. AR FOR THE ASSESSEE, HENCE, DISM ISSED AS WITHDRAWN. GROUND NO. 4 OF ITA NO. 5481/DEL/2017 FOR A.Y. 2009 -10, GROUND NO. 3 OF ITA NO. 2166/DEL/2017 FOR A.Y. 2012 -13, GROUND NO. 3 OF ITA NO. 5482/DEL/2017 FOR A.Y. 2014 -15 & GROUND NO. 2 OF ITA NO. 3982/DEL/2018 FORA.Y. 201 5-16 11. ASSESSING OFFICER HAS MADE DISALLOWANCE OF RS. 1,51,634/- , 2,17,246/-, 5,56,000/- AND 4,11,300/- FOR A.YS. 20 09-10, 2012-13, 2014-15 AND 2015-16 RESPECTIVELY ON ACCOUNT OF CONT RIBUTION MADE BY THE ASSESSEE BANK TO LIC ON ACCOUNT OF GRATUITY FUND ON THE GROUND THAT THE SAME HAS NOT BEEN APPROVED BY PR. C OMMISSIONER ITA NO. 2166 & ORS. 6 OF INCOME TAX, MUZAFFARNAGAR. 12. IT IS UNDISPUTED FACT ON RECORD THAT OUT OF AMO UNT OF RS. 2,17,246/- THE APPELLANT HAS PAID RS. 1,62,441/- TO ONE OF THE EMPLOYEE ON HIS RETIREMENT BEING DEDUCTIBLE U/S 37 OF THE ACT. 13. IT IS ALSO NOT IN DISPUTE THAT SUCH DEDUCTIONS AS CLAIMED BY THE ASSESSEE COMPANY IS ALLOWABLE ONLY WHEN THE PAY MENT IS MADE ON BEHALF OF APPROVED FUND. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNED ORDER CONTENDED INTER ALIA THAT ASSESS EE BANK HAS MOVED AN APPLICATION TO THE PR. COMMISSIONER OF INC OME TAX ON 02-01-2009 AVAILABLE AT PAGE 26 TO 28 OF PB WHO HAS GRANTED APPROVAL WITH EFFECT FROM 01.05.2017; THAT APPROVA L WAS REQUIRED TO BE GRANTED FROM THE DATE OF APPLICATION TO BE AP PLICABLE WITH EFFECT FROM A.Y. 2009-10 AND RELIED UPON THE ORDER PASSED BY CO- ORDINATE BENCH OF TRIBUNAL IN CASE CITED AS THE GANGA MERCANTILE URBAN COOPERATIVE BANK LTD., MEERUT VS. ACIT, MUZAF FARNAGAR. 14. IDENTICAL ISSUE HAS BEEN DECIDED BY THE COOPERA TIVE BENCH OF TRIBUNAL IN CASE OF THE GANGA MERCANTILE URBAN L TD. (SUPRA) BY DIRECTING THE AO TO DECIDE THE ISSUE AFTER DECISION OF THE PR. COMMISSIONER OF INCOME TAX ON THE APPLICATION OF TH E ASSESSEE. 15. WE ARE OF THE CONSIDERED VIEW THAT WHEN APPLICA TION FOR ITA NO. 2166 & ORS. 7 GRANTING APPROVAL FOR THE GRATUITY TRUST WITH THE L IFE INSURANCE CORPORATION OF INDIA HAS BEEN FILED WELL WITHIN TIME I.E. 02-01-2009, IT IS TO BE ALLOWED FROM THE DATE OF AP PLICATION ITSELF AND NOT PROSPECTIVELY AS LD. PR. CIT HAS DONE IN TH IS CASE. 16. SO, FOLLOWING THE ORDER PASSED BY COORDINATE BE NCH OF TRIBUNAL, WE REMIT THIS ISSUE BACK TO THE AO TO DEC IDE AFRESH AFTER GETTING DECISION FROM THE PR. COMMISSIONER OF INCOM E TAX ON THE APPLICATION OF THE ASSESSEE. APPLICATION OF THE ASS ESSEE IS REPORTEDLY PENDING WITH PR. CIT WHO SHALL DECIDE TH E SAME EXPEDITIOUSLY IN ACCORDANCE WITH LAW FROM THE DATE OF APPLICATION AND THEREAFTER AO SHALL DECIDE THE ISSUE AFRESH ACC ORDINGLY. CONSEQUENTLY, GROUND NO. 4 OF A.Y. 2009-10, GROUND NO. 3 OF A.Y. 2012-13, GROUND NO. 3 OF A.Y. 2014-15 & GROUN D NO. 2 OF 2015-16 IS DECIDED IN FAVOUR OF THE ASSESSEE FOR ST ATISTICAL PURPOSES. GROUND NO. 5 OF ITA NO. 5481/DEL./2017 FOR A.Y. 20 09-10 & GROUND NO.5 OF ITA NO. 2166/DEL./2017FORA.Y. 2012 -13, GROUND NO. 4 OF ITA NO. 5482/DEL/2017 FOR A.Y. 2014 -15, GROUND NO. 3 OF ITA NO. 3982/DEL/2018 FOR A.Y. 2015 -16 17. AFORESAID GROUND HAS BEEN RAISED BY THE ASSESS EE ON THE ITA NO. 2166 & ORS. 8 IDENTICAL ISSUE CHALLENGING THE ADDITION OF RS. 62, 315/-, RS. 32,00, RS. 32,00/- & 32,00/- A.Y. 2009-10, 2012-13, 2014-1 5 & 2015-16 RESPECTIVELY BY WAY OF DISALLOWANCE ON ACCOUNT OF D IVIDEND RECEIVED BY THE ASSESSEE BANK FROM UP COOPERATIVE F EDERATION U/S 80P(4) OF THE ACT. 18. UNDISPUTEDLY, ASSESSEE BANK HAS RECEIVED DIVIDE ND INCOME FOR THE YEARS UNDER CONSIDERATION FROM THE INVESTME NT MADE WITH UP COOPERATIVE FEDERATION. IT IS ALSO NOT IN DISPUT E THAT ASSESSEE BANK IS A COOPERATIVE BANK REGISTERED WITH RESERVE BANK OF INDIA. WHEN WE PERUSE THE PROVISIONS CONTAINED U/S 80P(4), 80P(2)(D) OF THE ACT, THIS DEDUCTION IS NOT AVAILABLE TO THE COO PERATIVE BANK. SO, IN VIEW OF THE MATTER, WE FIND NO ILLEGALITY OR INF IRMITY IN THE FINDINGS RETURNED BY LD. CIT(A), HENCE, GROUND NO . 5, GROUND NO. 5, GROUND NO. 4 & GROUND NO. 3 A.Y 2009-10, 201 2-13, 2014- 15 AND 2015-16 RESPECTIVELY ARE DECIDED AGAINST THE ASSESSEE. GROUND NO. 6 OF ITA NO. 5481/DEL/2017 FOR A.Y. 2009 -10 19. ASSESSEE CHALLENGED THE DISALLOWANCE OF RS. 10, 000/- MADE/ CONFIRMED BY AO/ CIT ON THE GROUND THAT IT IS NOT A LLOWABLE U/S 40IC OF THE ACT. PERUSAL OF THE IMPUGNED ORDER PASS ED BY LD. CIT(A) PASSED IN A.Y. 2009-10 GOES TO PROVE THAT TH IS ISSUE REMAINED UNDECIDED BY LD. CIT(A), MAY BE DUE TO INA DVERTENCE. ITA NO. 2166 & ORS. 9 SO, WITHOUT ENTERING INTO MERIT OF ALLOWABILITY OR DISALLOWABILITY, WE REMIT THIS ISSUE BACK TO LD. CIT(A) TO DECIDE AF TER PROVIDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. CONSEQU ENTLY, GROUND NO. 5 DECIDED IN FAVOUR OF THE ASSESSEE FOR STATIST ICAL PURPOSES. GROUND NO. 6 OF ITA NO. 2166/DEL/2017, A.Y. 2012-13 20. ASSESSING OFFICER MADE ADDITION OF RS. 3,29,241 /- ON ACCOUNT OF INTEREST QUA ALLEGED NPA ASSESTS OUT OF UNRECOGNIZED INTEREST INCOME OF RS. 5,94,320/-. IT IS CASE OF TH E ASSESSEE THAT THE CLAIM OF THE ASSESSEE IS ON THE GROUND THAT ADVANCE S FOR THESE ACCOUNTS WERE NPA IN NATURE. HOWEVER, LD. CIT(A) DE CIDED THIS ISSUE AGAINST THE ASSESSEE BY RETURNING FOLLOWING F INDINGS :- DURING APPELLATE PROCEEDINGS ALSO THE APPELLANT HAS NOT BROUGHT ANY FURTHER SUBMISSION TO SUPPORT THE GROUNDS OF APPEAL THAT THE LOANS HAVE BEEN CATEGORIZED AS NPA IN ACCORDANCE WITH THE GUIDELINES OF THE R.B.I. THE RELIANCE OF THE APPELLANT UPON DIFFERENT DECISIONS OF THE HONBLE TRIBUNALS AS MENTIONED IN THE SUBMISSION DOES NOT HELP THE CASE OF THE APPELLANT AS THE APPELLANT HAS FAILED TO SHOW THAT THE LOANS HAVE BEEN CATEGORIZED AS NPA AFTER FOLLOWING THE GUIDELINES OF R.B.I. IN THE CIRCUMSTANCES IT IS HELD THAT THE AO WAS JUSTIFIED TO MAKE ADDITION OF RS. 3,29,241/-. THE SAME IS HEREBY CONFIRMED. GROUND OF APPEAL NO. 14 IS DISMISSED. 21. PERUSAL OF THE FINDINGS RETURNED BY LD. CIT(A) SHOWS THAT THE ASSESSEE HAS FAILED TO BRING ON RECORD THE EVID ENCE TO PROVE THE FACT THAT THE LOANS HAVE BEEN CATEGORIZED AS NPA AS PER GUIDELINES ITA NO. 2166 & ORS. 10 OF THE RBI QUA THE AMOUNTS CLAIMED ON ACCOUNT OF IN TEREST INCOME. THIS FACT HAS BEEN CANDIDLY ADMITTED BY LD. AR FOR THE ASSESSEE. SO, WE REMIT THIS ISSUE BACK TO THE AO TO DECIDE AF RESH AFTER ENTERTAINING EVIDENCE TO BE BROUGHT ON RECORD BY TH E ASSESSEE. ACCORDINGLY THIS GROUND IS ALSO DECIDED IN FAVOUR O F THE ASSESSEE FOR STATISTICAL PURPOSES. GROUND NO. 5 OF ITA NO. 5482 FOR A.Y. 2014-15 22. ASSESSING OFFICER NOTICED FROM THE P & L ACCOUN T THAT THE ASSESSEE HAS RECEIVED RS. 16,34,688/- AS EXEMPT DIV IDEND INCOME AND THEREBY DISALLOWED AN AMOUNT OF RS. 1,50,000/- ON THE BASIS OF GUESS WORK BEING EXPENSES INCURRED FOR EARNING EXEM PT DIVIDEND INCOME. 23. LD. CIT(A) DECIDED THIS ISSUE BY PARTLY ALLOWIN G THE GROUND IN FAVOUR OF THE ASSESSEE BY RETURNING FOLLOWING FI NDINGS :- 11. THE FACTS OF THE CASE AS WELL AS SUBMISSION MADE BY THE APPELLANT HAVE BEEN CONSIDERED. THE AO HAS MADE DISALLOWANCE OF RS. 1,50,000/- ON ACCOUNT OF EXPENSES INCURRED FOR EARNING OF DIVIDEND INCOME. THE SUBMISSION OF THE AR ON THIS ISSUE HAS BEEN REPRODUCED AS ABOVE. SIMILAR ISSUE HAS BEEN DECIDED BY THE UNDERSIGNED IN THE CASE OF THE APPELLANT FOR AY 2012-13. VIDE ORDER IN APPEAL NO.42/15-16/MZR DATED 06.01.2017. AS THE FACTS ARE IDENTICAL IN THIS YEAR ALSO, THEREFORE FOLLOWING THE REASONING GIVEN THE ORDER DATED 06.01.2017, THE AO IS DIRECTED TO ADOPT THE SAME PRINCIPLE AND RECOMPUTED THE DISALLOWANCE ON THIS ACCOUNT. GROUND OF APPEAL NO. 5 IS PARTLY ALLOWED. ITA NO. 2166 & ORS. 11 24. SINCE LD. CIT(A) HAS ALREADY DIRECTED THE AO TO RE-DECIDE THIS ISSUE IN ACCORDANCE WITH ORDER PASSED BY CIT (A) IN A.Y.2012-13, NO GROUND IS LEFT WITH THE ASSESSEE TO BE ARGUED BEFORE THE TRIBUNAL. SO, AO IS DIRECTED TO DECIDE T HIS ISSUE AS DIRECTED BY LD. CIT(A). THIS GROUND IS DECIDED ACCO RDINGLY. 25. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE AFORES AID APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 30 TH SEPTEMBER, 2021. SD/- SD/- (O.P.KANT) (KULDIP SING H) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH SEPTEMBER, 2021 *BINITA* COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A) 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.