Dy.Commissioner of Income Tax, Bareilly V. M/s Pilibhit Zila Sehkari Bank Ltd, Pilibhit

ITA 72/LKW/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7991 (ITAT-LUCKNOW)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-12-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 11-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C MEENA
• Assessee Lawyers: KAPIL AGRAWAL
• Keywords: Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.72/LKW/2014 ASSESSMENT YEAR:2006-07 DY. CIT-II BAREILLY V. M/S PILIBHIT ZILA SEHKARI BANK LTD. CHHATRI CHAURAHA PILIBHIT TAN/PAN:AAAJP0450F (APPELLANT) (RESPONDENT) C. O. NO.20/LKW/2014 [ARISING OUT OF ITA NO.72/LKW/2014] ASSESSMENT YEAR:2006-07 M/S PILIBHIT ZILA SEHKARI BANK LTD. CHHATRI CHAURAHA PILIBHIT V. DY. CIT-II BAREILLY TAN/PAN:AAAJP0450F (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY: SHRI. K. C. MEENA, D.R. ASSESSEE BY: SHRI. KAPIL AGRAWAL, C.A. DATE OF HEARING: 09 12 2014 DATE OF PRONOUNCEMENT: 16 12 2014 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) ON A SOLITARY GROUND THAT THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.1,37,01,404/- RIGHTLY MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 80P(2)(A)(I) OF THE INCOME- TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'). :- 2 -: 2. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION IN THE REVENUES APPEAL ASSAILING THE ORDER OF THE ASSESSING OFFICER ON THE FOLLOWING GROUNDS:- 1. WE ARE ENGAGED WHOLLY AND EXCLUSIVELY IN THE BANKING BUSINESS AND RECYCLING ITS INCOME IN THE BUSINESS OF BANKING, HENCE WE ARE ENTITLED FOR THE DEDUCTION U/S 80P (2)(A)(I). THE APPELLANT IS A CO-OPERATIVE BANKING SOCIETY RUNNING THE BANKING BUSINESS AND FILES A TRUE AND CORRECT INCOME TAX RETURN EVERY YEAR VOLUNTARILY WITHOUT ANY NOTICE UNDER SECTION 142(1). THE LEARNED DEPUTY COMMISSIONER OF INCOME TAX HAS WRONGLY DISALLOWED THE DEDUCTION OF INCOMES OF RS. 1,82,74,000.00 WITHOUT ANY BASIS. THE INCOME OF INTEREST ON VOLUNTARY RESERVES WERE' DISALLOWED , WHILE THE BANK IS ONLY CARRYING OUT THE BANKING ACTIVITY AND THE INCOME WAS SOLELY APPLIED AND UTILIZED FOR BANKING BUSINESS PURPOSES. THE ASSESSMENT, IN THESE CIRCUMSTANCES, IS WHOLLY UNJUSTIFIED. 2. THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN DISALLOWING THE REVENUE EXPENDITURE OF RS. 1,37,01,403.96 INCURRED FOR THE BUSINESS OPERATIONS. THE ADDITION MADE BY LEARNED ASSESSING OFFICER ARE UNJUSTIFIED. 3. DURING THE COURSE OF HEARING, THE LD. D.R. HAS INVITED OUR ATTENTION TO THE FACT THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF THE ASSESSEE WITH REGARD TO THE PROVISIONS OF RS.1,37,01,404/-, FOR WHICH NO DETAIL OR ANY OTHER SUBMISSION WAS GIVEN BY THE ASSESSEE. THE GROUND RELATING TO THE DISALLOWANCE OF THE SAID PROVISIONS WAS RAISED BEFORE THE LD. CIT(A) AS GROUND NO.3, BUT THE LD. CIT(A) HAS NOT GIVEN ANY SPECIFIC FINDING IN THIS REGARD. BUT, IN THE RESULT HE ALLOWED THE ENTIRE APPEAL OF THE ASSESSEE. THE LD. D.R. HAS FURTHER CONTENDED THAT THE LD. CIT(A)S DELIBERATION WAS WITH REGARD TO THE CLAIM OF DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT, THEREFORE, THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE LD. CIT(A) FOR RE-ADJUDICATION OF THE ISSUE OF DISALLOWANCE OF THE AFORESAID PROVISIONS BY PASSING A SPEAKING ORDER. :- 3 -: 4. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS FORMALLY PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 5. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF PROVISIONS OF RS.1,37,01,404/- CLAIMED BY THE ASSESSEE, BUT THE GROUND RELATING TO THIS ISSUE WAS NOT ADJUDICATED BY THE LD. CIT(A) IN HIS ORDER. WE ARE, THEREFORE, OF THE VIEW THAT SINCE THIS ISSUE WAS NOT PROPERLY ADJUDICATED BY THE LD. CIT(A), THE MATTER MAY BE RESTORED BACK TO HIM FOR ITS PROPER ADJUDICATION. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE TO ADJUDICATE THE ISSUE OF DISALLOWANCE OF PROVISIONS OF RS.1,37,01,404/- BY PASSING A SPEAKING ORDER. NEEDLESS TO MENTION HERE THAT THE LD. CIT(A) WOULD AFFORD PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE WHILE ADJUDICATING THE ISSUE. 6. SO FAR AS THE CROSS OBJECTION FILED BY THE ASSESSEE IS CONCERNED, WE FIND THAT THE ASSESSEE HAS ASSAILED THE ORDER OF THE ASSESSING OFFICER BEFORE THE TRIBUNAL; WHEREAS THE TRIBUNAL CAN ADJUDICATE THE GROUNDS ASSAILING THE ORDER OF THE LD. CIT(A). THEREFORE, THE GROUNDS RAISED BY THE ASSESSEE THROUGH THE CROSS OBJECTION ASSAILING THE ORDER OF THE ASSESSING OFFICER, ARE NOT AT ALL MAINTAINABLE. WE, THEREFORE, REJECT THE SAME. 7. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16 TH DECEMBER, 2014 :- 4 -: JJ:1012 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR