THE THANE DISTRICT CENTRAL CO. OP BANK LTD, THANE V. DCIT CIR 3, THANE

ITA 7295/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3740 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 08-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJUNATH SWAMYCIT
• Assessee Lawyers: ASHOK J PATIL KAILASH GAIKWAD
• Keywords: Sale consideration of property below Jantri Value; Depreciation; Revenue expenditure; Capital expenditure

Judgement Text

, , , , INCOME-TAX APPELLATE TRIBUNAL -EBENCH MUMBAI BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND C.N. PRASAD,JUDICIAL MEMBER ./I.T.A./7226/MUM/2014 , ,, , /ASSESSMENT YEAR: 2010-11 ACIT ,CIRCLE-3, 6 TH FLOOR, ASHAR IT PARK B-WING, WAGLE INDL ESTATE THANE (W)-400 604. PAN:AAAAT 0739 N VS. THE THANE DISTRICT CENTRAL CO-OPERATIVE BANK LTD.,CHATRAPATI SHIVAJI PATH, POST BOX NO.19,THANE-400 601. ( /APPELLANT ) ( / RESPONDENT) ./I.T.A./7295/MUM/2014 , ,, , /ASSESSMENT YEAR: 2010-11 THE THANE DISTRICT CENTRAL CO-OPERATIVE BANK LTD.,THANE-400 601. VS. ASSTT. CIT , CIRCLE-3, ROOM NO.02 THANE (W)-400 604. ( /APPELLANT ) ( / RESPONDENT) REVENUE BY: S/SHRI MANJUNATH SWAMY-CIT DR ASSESSEE BY: SHRI ASHOK J. PATIL , KAILASH GAIKWAD / DATE OF HEARING: 12.07.2016 / DATE OF PRONOUNCEMENT: 03.08.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DT.04.08.2014 OF CIT(A)-I,MUM BAI,THE ASSESSEE AND THE ASSESSING OFFICER(AO)HAVE FILED CROSS APPEALS FOR T HE ABOVE MENTIONED ASSESSMENT YEAR.ASSESSEE IS A CO-OPERATIVE BANK REG ISTERED WITH MAHARASHTRA BANK AND IS ENGAGED IN FUNCTIONING OF BANK AS PER F RAME WORK OF BANKING REGULATIONS ACT,1949.IT FILED ITS RETURN OF INCOME 14.10.2010,DECLARING TOTAL INCOME AT RS.13,18,31,547/-.THE ASSESSMENT ORDER U/ S.143(3) OF THE ACT, WAS PASSED ON 14.03.2013, DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.48.56 CRORES UNDER NORMAL PROVISIONS OF THE ACT. ITA.7295/MUM/2014: 2. THE ONLY EFFECTIVE GROUND ,RAISED BY THE ASSESSEE ,S WITH REGARD TO RESTRICTING THE CLAIM/DEDUCTION U/S.36(1)(VIIA) TO THE EXTENT O F PROVISION OF BAD AND DOUTFUL DEBTS OF RS.3.50CRORES AGAINST TOTAL CLAIM /DEDUCTI ON OF RS.32.78CRORES. 2.1. DURING THE COURSE OF HEARING BEFORE US, THE AUTHORI SED REPRESENTATIVE (AR) FAIRLY CONCEDED THAT IDENTICAL ISSUE HAD ARISEN IN THE MATTER OF M/S. GOPINATH PATIL PARSIK JANATA SAHKARI BANK LTD. AND WAS DECID ED AGAINST THE ASSESSEE-BANK BY THE TRIBUNAL(ITA/7134/M/2012,DTD-31.12.2015).WE FIND THAT WHILE DECIDING 7226 & 7295/M/14-THANE DISTRICT CENTRAL CO-OPBANK ( 10-11) 2 THE APPEAL FOR AY.2009-10,IN THE CASE OF M/S.GOPINA TH PATIL PARSIK JANATA SAHKARI BANK LTD.(SUPRA),THE TRIBUNAL HAS DEALT THE ISSUE AS UNDER :- 5. BEFORE US,THE LD. A.R. OF THE ASSESSEE HAS FAIR LY ADMITTED THAT THE ABOVE ISSUE RAISED BY THE ASSESSEE IN ITS APPEAL IS SQUARELY CO VERED AGAINST THE ASSESSEE BY THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF SHRI WARANA SAH. BANK LTD. VS. ACIT IN ITA NO.2508/PN/2012 AND ITA NO.34 7/PN/2013 VIDE ORDER DATED 16.04.14 WHEREIN THE TRIBUNAL, AFTER ANALYZING THE PROVISIONS OF SECTION 36(1)(VIIA) AND RELYING UPON ANOTHER DECISION OF THE TRIBUNAL I N THE CASE OF SHRI MAHALAXMI CO-OP BANK LTD. VS. ITO VIDE ITA NO.1658/PN/2011 D ATED 29.10.13, HAS HELD THAT THE DEDUCTION FOR PROVISION FOR BAD AND DOUBTFUL DE BTS SHOULD BE RESTRICTED TO THE AMOUNT OF SUCH PROVISION ACTUALLY CREDITED IN THE B OOKS OF THE ASSESSEE IN THE RELEVANT YEAR. 6. SO FAR AS THE ALTERNATE PLEA OF THE ASSESSEE IS CONCERNED, THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF STATE BANK OF INDIA VS. DCIT (2014) 148 ITD 71 WHEREIN T HE TRIBUNAL HAS HELD THAT WHEN THE CLAIM OF DEDUCTION HAS BEEN SPECIFICALLY PROVID ED UNDER SECTION 36(1)(VIIA), THEN MERELY PROVISION MADE ON THE BASIS OF RBI GUIDELIN ES DOES NOT BECOME ALLOWABLE. IN VIEW OF THE ABOVE, THERE IS NO MERIT IN THE APPEAL OF THE ASSESSEE AND THE SAME IS ACCORDINGLY DISMISSED. 2.3. RESPECTFULLY FOLLOWING THE ABOVE ORDER, EFFECTIVE G ROUND OF APPEAL IS DECIDED AGAINST THE ASSESSEE . ITA/7226/MUM/2014: 3. THE ONLY EFFECTIVE GROUND TAKEN BY THE REVENUE IS W ITH REGARD TO DELETING THE ADDITION ON ACCOUNT OF AMORTIZATION PREMIUM OF INVE STMENTS IN GOVERNMENT SECURITIES AMOUNTING TO RS.2,13,34,250/-. REPRESENTATIVES OF BOTH THE SIDES AGREED THAT IDENT ICAL ISSUE STANDS DECIDED AGAINST THE AO BY THE ORDER OF THE TRIBUNAL DELIVER ED IN THE CASE OF M/S. GOPINATH PATIL PARSIK JANATA SAHKARI BANK LTD.(SUPR A).WE FIND THAT THE TRIBUNAL HAS DEALT THE ISSUE OF AMORTISATION OF SECURITIES A S UNDER : 8. THE ISSUE INVOLVED IN THE APPEAL OF THE REVENUE IS RELATING TO THE AMORTIZATION OF LOSS ON ACCOUNT OF PREMIUM PAID ON HTM (HELD TO MAT URITY) INVESTMENTS. AT THE OUTSET, THE LD. A.R. OF THE ASSESSEE HAS STATED THA T THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBU NAL IN THE CASE OF HDFC BANK LTD. VS. DCIT IN ITA NO.375/M/2012 & OTHERS VIDE ORDER DATED 12.11.14. 9. WE HAVE GONE THROUGH THE CASE LAW RELIED UPON BY THE ASSESSEE. IN THE CASE OF HDFC BANK LTD. (SUPRA), THE TRIBUNAL HAS ALLOWED TH E AMORTIZATION OF LOSS ARISEN ON ACCOUNT OF PREMIUM PAID ON INVESTMENTS HELD TO MAT URITY AS DEDUCTABLE FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN TH E CASE OF CIT VS. HDFC BANK LTD. (2014) 366 ITR 505. 7226 & 7295/M/14-THANE DISTRICT CENTRAL CO-OPBANK ( 10-11) 3 THE LD. D.R. HAS FAIRLY AGREED THAT THE ISSUE IS SQ UARELY COVERED BY THE ABOVE DECISION. FURTHER, THE LD. A.R. OF THE ASSESSEE HAS BROUGHT O UR ATTENTION TO THE ANOTHER DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CI T VS. THANE BHARAT SAHAKARI BANK LTD. IN ITA NO.1117 OF 2013 DECIDED ON 17.03.1 5 WHEREIN THE HONBLE BOMBAY HIGH COURT HAS UPHELD THE FINDING OF THE TRIBUNAL H OLDING THAT THE EXPENDITURE ON ACCOUNT OF RECLASSIFICATION OF HELD TO MATURITY, SECURITIES REPRESENT REVENUE EXPENDITURE AND NOT CAPITAL EXPENDITURE AND IS THUS REQUIRED TO BE SPREAD OVER THE LIFE OF THE SECURITY AND IS PROPORTIONATELY ALLOWABLE AS RIGHT OFF FROM YEAR TO YEAR AS PER THE GUIDELINES ISSUED BY RBI. 10. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. 3.1. RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL WE , DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT, APPEAL FILED BY THE ASS ESSEE AND THE A.O. STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD AUGUST,2016. 3 , 2016 SD/- SD/- ( . . / C.N. PRASAD ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 03.08.2016. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.