The Islampur Urban Co-op Bank Ltd., Sangli V. Income-tax Officer,

ITA 693/PUN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0954 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 13-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMITRA BANERJI
• Keywords: Opportunity of being heard; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . . , BEFORE SHRI R.K. PANDA, AM . / ITA NO.693/PN/2016 / ASSESSMENT YEAR : 2009-10 THE ISLAMPUR URBAN CO - OP. BANK LTD., YALLAMMA CHOWK, ISLAMPUR, DIST. SANGLI. PAN :AACFT4713H . / APPELLANT V/S ITO, WARD - 2(2), SANGLI . / RESPONDENT / APPELLANT BY : SMT. DEEPA KHARE / RESPONDENT BY : SMT. SUMITRA BANERJI / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER DATED 02-02-2016 OF THE CIT(A)-I, KOLHAPUR RELATING TO AS SESSMENT YEAR 2009-10. 2. GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE READS AS UNDER: 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF PROVISION U/S.36(1)(VIIA) AT RS.12,57,715/-. 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBM ITTED THAT THE ABOVE GROUND HAS TO BE DECIDED AGAINST THE ASSESS EE IN VIEW OF THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF MAHALAXMI COOPERATIVE BANK LTD. VS. ITO SINCE THE ASSESSE E IN THE INSTANT CASE HAS NOT MADE ANY PROVISION FOR BAD AND DOU BTFUL DEBTS IN THE BOOKS OF ACCOUNT EQUIVALENT TO THE AMOUNT OF DEDUCTION SOUGHT / DATE OF HEARING :22.09.2016 / DATE OF PRONOUNCEMENT:23.09.2016 2 ITA NO.693/PN/2016 TO BE CLAIMED U/S.36(1)(VIIA) OF THE ACT. IN VIEW OF THE ABOVE AND IN ABSENCE OF ANY OBJECTION BY THE LD. DEPARTMENTAL REPRES ENTATIVE THIS GROUND RAISED BY THE ASSESSEE IS DISMISSED. 4. THE ASSESSEE HAS ALSO TAKEN AN ADDITIONAL GROUND WHIC H READS AS UNDER : THE APPELLANT WISHES TO RAISE A GROUND IN RESPECT OF I NTEREST ON NPA ACCOUNTS OF RS.50,21,624/- WHICH IS ASSESSED ON ACCRUAL BA SIS REJECTING THE CLAIM OF THE APPELLANT THAT THE SAME BECOMES TAXA BLE IN THE YEAR OF ACTUAL RECEIPT ON THE BASIS OF REAL INCOME THEORY AS A SETTLED LAW ON THE SUBJECT. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALT HOUGH THE ASSESSEE HAS NOT CLAIMED SUCH INTEREST ON NPA AS DEDU CTIBLE FROM THE INCOME OF THE CURRENT YEAR, HOWEVER, THE ASSESSEE D URING THE COURSE OF ASSESSMENT PROCEEDINGS VIDE LETTER DATED 27-1 2-2011 HAS REQUESTED THE AO TO ALLOW THE CLAIM OF DEDUCTION OF RS.50,2 1,624/- ON ACCOUNT OF NPA INTEREST. HOWEVER, THE AO DID NOT ENT ERTAIN THE REQUEST OF THE ASSESSEE. FURTHER, THIS GROUND WAS ALSO NEVER TAKEN BEFORE THE CIT(A). HOWEVER, SINCE ALL FACTS ARE ALREADY ON R ECORD AND THIS BEING A LEGAL GROUND, THEREFORE, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE SHOULD BE ALLOWED. FOR THE ABOVE PROPOSITIO N, THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. VS. CIT REPORTED IN 229 ITR 383, THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CAS E OF CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS PVT. LTD. REPORTED IN 349 ITR 336. 6. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TR IBUNAL IN THE CASE OF SHRI MAHALAXMI CO-OP. BANK LTD. VIDE ITA NO.1658/PN/2011 ORDER DATED 29-10-2013 SHE SUBMITTED THAT UNDER IDENTICAL CIRCUMSTANCES THE TRIBUNAL HAS ADMITTED THE ADDIT IONAL 3 ITA NO.693/PN/2016 GROUND RELATING TO AMORTIZATION FOR PREMIUM ON HTM SECURIT IES AS PER CBDT CIRCULAR NO.17/2008 DATED 26-11-2008 ALTHOUGH THE ASSESSEE HAS NOT RAISED ANY SUCH CLAIM BEFORE THE LOWER AUTHORITIES. SHE SUBMITTED THAT IN THE INSTANT CASE THE ASSESSEE HA S ALREADY MADE A CLAIM BEFORE THE AO DURING THE COURSE OF ASSESSME NT PROCEEDINGS, THEREFORE, THE ASSESSEE IS IN A BETTER POSITIO N. SHE ACCORDINGLY SUBMITTED THAT THE ADDITIONAL GROUND SHOULD B E ADMITTED. 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAN D OPPOSED THE ADMISSION OF THE ADDITIONAL GROUND. SHE SUBMIT TED THAT SINCE THE ASSESSEE HAS NOT FILED A REVISED RETURN BEFORE THE AO AND NO SUCH GROUND WAS TAKEN BEFORE THE CIT(A), THEREFORE, THE RE IS NO JUSTIFICATION TO CONSIDER THE SAME AT THIS STAGE. 8. I HAVE CAREFULLY CONSIDERED THE RIVAL ARGUMENTS MADE B Y BOTH THE SIDES FOR ADMISSION OF THE ADDITIONAL GROUND. IT IS A T RITE LAW THAT AN ASSESSEE IS ENTITLED TO RAISE ADDITIONAL GROUND IN APPE AL PROCEEDINGS WHICH WERE NOT EARLIER CLAIMED IN THE RETURN OF INCOME FILED BY HIM. APART FROM OTHER DECISIONS THE RECENT DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PRUTHVI BROKER S AND SHAREHOLDERS PVT. LTD. (SUPRA) SUPPORTS THE AFORESAID POSIT ION. FURTHER, THE ADDITIONAL GROUND NOW SOUGHT TO BE RAISED BY THE ASSESSEE INVOLVES A POINT OF LAW AND IT HAS A BEARING ON T HE DETERMINATION OF CORRECT TAX LIABILITY OF THE ASSESSEE. THER EFORE, IN TERMS OF RATIO OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. (SUPRA) THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ADMITTED. 9. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE DECISIO N OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. SHRI CHHATRAPATI 4 ITA NO.693/PN/2016 RAJASHRI SHAHU URBAN CO.OP BANK LTD. AND BUNCH OF OTHE R APPEALS VIDE ORDER DATED 04-02-2016 SUBMITTED THAT IDENTICAL ISSU E HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. THE T RIBUNAL FOLLOWING VARIOUS DECISIONS INCLUDING THE DECISION OF HONBLE BOM BAY HIGH COURT IN THE CASE OF CIT VS. DEOGIRI NAGARI SAHAKARI B ANK LTD. VIDE ITA NO.53/2014 AND OTHERS WHERE IT HAS BEEN HELD T HAT INTEREST ACCRUED ON NPAS IS NOT TAXABLE IN THE HANDS OF THE ASSE SSEE, HAS UPHELD THE ORDER OF THE CIT(A) AND THE GROUNDS RAISED BY THE REVENUE HAVE BEEN DISMISSED. HOWEVER, SINCE THE AO HAS NOT ADJU DICATED THIS ISSUE AND NO GROUND WAS TAKEN BEFORE THE CIT(A), THE REFORE, SHE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE AO. 10. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE AO. 11. AFTER HEARING BOTH THE SIDES AND CONSIDERING THE TOTA LITY OF THE FACTS OF THE CASE, I DEEM IT PROPER TO RESTORE THIS ADDIT IONAL GROUND TO THE FILE OF THE AO WITH A DIRECTION TO ADJUDICATE THE ISSUE IN THE LIGHT OF THE DECISION OF THE TRIBUNAL CITED (SUPRA) AND IN ACCOR DANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE AS SESSEE. I HOLD AND DIRECT ACCORDINGLY. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23-09-2016. SD/- ( R.K. PANDA ) ACCOUNTANT MEMBER PUNE ; DATED :23 RD SEPTEMBER, 2016. 5 ITA NO.693/PN/2016 '# $# / COPY OF THE ORDER FORWARDED TO : / BY ORDER , /// // $ % / TRUE COPY // // TRUE COPY // &' % * / SR. PRIVATE SECRETARY *, / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (A) - I, KOLHAPUR 4. THE CIT- I, KOLHAPUR 5. $ %%* , * , SMC BENCH / DR, ITAT, SMC BENCH PUNE; 6. 2 / GUARD FILE.