ACIT 1(2)(1), MUMBAI V. CITIZEN CREDIT CO OPERATIVE BANK LTD, MUMBAI

ITA 6012/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1421 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 26-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABI RAMA KARTHKIYEN
• Assessee Lawyers: DR K SHIVRAM
• Keywords: Rule of consistency; Revised return
• Section: 143(3)

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE HONBLE SH. SANDEEP GOSAIN , JM & HONBLE SH. N. K. PRADHAN , A M ./ I.T.A. NO . 6012/MUM/2017 ( / ASSESSMENT YEAR: 2011 - 12 ) A CIT - 1(2 )(1), 535, AAYAKAR BHAVAN, MUMBAI - 400 020 / VS. M/S CITIZEN CREDIT CO - OPERATIVE BANK LTD. HELENA APARTMENTS MOUNT CARMEL ROAD, BANDRA WEST, MUMBAI - 400 050 ./ ./ PAN NO. AA AAC0016F ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI ABI RAMA KARTHKIYEN , DR / RESPONDENTBY : DR. K. SHIVRAM & SHRI SASHANK DUNDU , AR S / DATE OF HEARING : 19 .02 .201 9 / DATE OF PRONOUNCEMENT : 03.05.2019 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMIS S IONER OF INCOME TAX (APPEALS) - 2 , MUMBAI, DATED 03.07.17 FOR AY 2011 - 12 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 6012 /MUM/201 7 M/S CITIZEN CREDIT CO - OPERATIVE BANK LTD. 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN ALLOWING DEDUCTION AMOUNTING TO RS.1,42,06,000/ - U/S 36(L)(VIII) ON ACCOUNT OF PROFITS DERIVED FROM ELIGIBLE BUSINESS CARRIED OUT BY A 'SPECIFIED ENTITY' AND CARRIED TO A SPECIAL RESERVE, WITHOUT VERIFYING WHETHER THE ASSESSEE COMPANY IS A 'SP ECIFIED ENTITY' AS PER EXPLANATION (D) TO SECTION 36(L)(VIII) READ WITH EXPLANATION TO SECTION 80P(4) AND PART V OF THE BANKING REGULATION ACT, 1949? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN ALLOWING DEDUCTION AMO UNTING TO RS.1,42,06,000/ - U/S 36(L)(VIII) ON ACCOUNT OF PROFITS DERIVED FROM 'ELIGIBLE BUSINESS' CARRIED OUT BY A SPECIFIED ENTITY AND CARRIED TO A SPECIAL RESERVE, WITHOUT VERIFYING WHETHER THE PROFITS WERE DERIVED FROM 'ELIGIBLE BUSINESSES', VIZ. PROVID ING LONG - TERM FINANCE FOR (A) INDUSTRIAL OR AGRICULTURAL DEVELOPMENT, (B) DEVELOPMENT OF INFRASTRUCTURE FACILITY IN INDIA, OR (C) DEVELOPMENT OF HOUSING IN INDIA? THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR WITHDRAW THE AFORESAID GROUND OF APPEAL. 2 . A S PER THE FACTS OF THE PRESENT CASE, THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 28.09.11 DECLARING TOTAL INCOME AT 3 I.T.A. NO. 6012 /MUM/201 7 M/S CITIZEN CREDIT CO - OPERATIVE BANK LTD. RS. 24,91,05,830/ - . SUBSEQUENTLY, T HE CASE WAS SELECTED FOR SCRUTINY AND AFTER SERVING STATUTORY NOTICE AND SEEKING REPLY OF THE ASSESSEE, ASSESSMENT ORDER U/S. 143( 3)DATED 21.11.2013 WAS PASSED BY THE AO, THEREBY AN AMOUNT OF RS. 2,20,99,000/ - WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3. AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFOR E LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES ALLOWED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE HAS FILED THE PRESENT APPEAL BEFORE US ON THE GROUNDS MENTIONED HEREIN ABOVE. GROUND NO. 1 & 2 5. THESE GROUND S RAISED BY THE REVENUE ARE INTER CONNECTED AND INTER RELATED AND RELATES TO CHAL LENGING THE ORDER OF LD. CIT(A) IN ALLOWING DEDUCTION AMOUNTING TO RS.1,42,06,000/ - U/S 36(1)(VIII) ON ACCOUNT OF PROFITS DERIVED FROM ELIGIBLE BUSINESS CAR RIED OUT BY A 'SPECIFIED ENTITY' AND CARRIED TO A SPECIAL RESERVE, 4 I.T.A. NO. 6012 /MUM/201 7 M/S CITIZEN CREDIT CO - OPERATIVE BANK LTD. THEREFORE WE THOUGHT IT FIT TO DISPOSE OF THE SAME BY THIS COMMON ORDER. 6. WE HAVE HEARD THE COUNSELS FOR BOTH THE PARTIES AT LENGTH AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. BEFORE WE DECIDE THE MERITS OF THE CASE, IT IS NECESSARY TO EVALUATE THE ORDERS PASSED BY LD. CIT(A). THE LD. CIT(A) HAS DEALT WITH THE ABOVE GROUNDS RAI SED BY THE REVENUE IN PARA NO. 3 OF ITS ORDER AND THE SAME IS REPRODUCED BELOW: - 3 IN THE LIGHT OF THE ABOVE DIRECTION GIVEN BY THE HONBLE ITAT C BENCH, I AM OF THE OPINION THAT DEDUCTION CLAIMED BY THE APPELLANT COMPANY U/S 36(1)(VIII) OF RS. 1,42,06,000/ - IS TO BE ALLOWED BY THE AO. ACCORDINGLY, THIS APPEAL IS ALLOWED. 7. AFTER HAVING GONE THROUGH THE FACTS OF THE PRESENT CASE AND HEARING THE PARTIES AT LENGTH, WE FIND THAT INITIALLY AO AND LD. CIT(A) IN THE FIRST ROUND OF LITIGATION HAD DISALLOWED THE CLAIM OF THE ASSESSEE ON THE PREMISE THAT NO REVISED RETURN WAS FILED BY THE ASSESSEE. WHEREAS ASSESSEE HAD EXPLAINED BY SUBMITTING 5 I.T.A. NO. 6012 /MUM/201 7 M/S CITIZEN CREDIT CO - OPERATIVE BANK LTD. DETAILED COMPUTATION OF SPECIAL RESERVE DEDU CTION, WHICH WAS AUDITED BY STATUTORY AUDITORS OF THE BANK AND THUS SUBMITTED THAT ASSESSEE WAS ELIGIBLE FOR THE DEDUCTION U/S 36(1)(VIII) OF THE ACT. IT WAS ARGUED THAT SIMILAR CLAIM WAS ALSO ACCEPTED BY CPC IN SUBSEQUENT YEARS AND THUS THE TRIBUNAL WHILE CONSIDERING THE SAID FACTS, HAD RESTORED THE MATTER BACK TO THE FILE OF FIRST APPELLATE AUTHORITY FOR FRESH ADJUDICATION. IT IS TRUE THAT LD. CIT(A) HAD NOT PASSED WELL REASONED SPEAKING ORDER, BUT THE FACT REMAINS THAT THE ASSESSEE HAD SUBMITTED DETAILED EXPLANATION ALONGWITH COMPUTATION OF SPECIAL RESERVE ALONWITH THE STATUTORY AUDITORS REPORT. EVEN SIMILAR CLAIM HAS ALREADY BEEN ACCEPTED BY CPC, THUS CONSIDERING THE ABOVE FACTS, WE FEEL THERE ARE NO REASONS TO STRETCH THE CLAIM OF THE ASSESSEE ANY FURT HER. 8. EVEN OTHEREWISE, HONBLE SUPREME COURT IN THE CASE OF BHARAT SAMACHAR NIGAM LTD. VRS. UOI (2006) 282 ITR 273 (SC) HAD HELD THAT THE RULE OF CONSISTENCY MAY BE FOLLOWED, WHEREIN IT WAS SAID EACH ASSESSMENT YEAR BEING A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT 6 I.T.A. NO. 6012 /MUM/201 7 M/S CITIZEN CREDIT CO - OPERATIVE BANK LTD. ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. 9. WE ALSO NOTICED THAT IN THE SUBSEQUENT YEARS, ORDER U/S 143(3) OF THE ACT HAD ALREADY BEEN PASSED IN FAVOUR OF THE ASSESSEE, WHICH ALSO SUPPORT THE STAND TAKEN BY THE ASSESSE AND THEREFORE, LD. CIT(A) WHILE APPRECIATING THE FACTS OF THE PRESENT CASE HAD RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE. 10 . MOREOVER, N O NEW FACTS OR CONTRARY JUDGMENTS HAVE BEEN BROUGHT ON RECORD BEFORE US I N ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD CIT (A) . THEREFORE, THERE ARE NO REASON S FOR US TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS RECORDED BY THE LD. CIT (A). HENCE , WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS SO RECORDED BY THE LD. CIT (A) ARE JUDICIOUS AND ARE WE LL REASONED. RESULTANTLY, THESE GROUND S RAISED BY THE REVENUE STANDS DISMISSED . 7 I.T.A. NO. 6012 /MUM/201 7 M/S CITIZEN CREDIT CO - OPERATIVE BANK LTD. 11 . IN THE NET RESULT, THE APPEAL FILED BY THE REVENUE STA NDS DISMISSED WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD MAY 20 19 . SD/ - SD/ - ( N. K. PRADHAN ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 03 . 0 5 .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