Shivshakti Urban Co-op Bank Limited, Solapur V. Income-tax Officer, Ward - 2(1), Solapur

ITA 740/PUN/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1043 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-07-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 24-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUDENDHU DAS
• Keywords: Bad and doubtful debts
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E (THROUGH VIRTUAL COURT) BEFORE SHRI INTURI RAMA RAO, AM AND SHRI S. S. VISWANETHRA RAVI, JM . / ITA NO.740/PUN/2018 / ASSESSMENT YEAR : 2014-15 SHIVSHAKTI URBAN CO-OP BANK LIMITED, 739, KARAMVEER NAGAR, NEAR POST OFFICE BARSHI, SOLAPUR 413 411. PAN : AAWFS6953J. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 2(1), SOLAPUR. . / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE. REVENUE BY : SHRI SUDENDHU DAS. / DATE OF HEARING : 08.07.2021 / DATE OF PRONOUNCEMENT : 09.07.2021 / ORDER PER INTURI RAMA RAO, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 9, PUNE DAT ED 19.01.2018 FOR THE ASSESSMENT YEAR 2014-15. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT IS A CO-OPERATIVE BANK. THE RETURN OF INCOME FOR A.Y. 2014-15 WAS FILED ON 2 6.11.2014 DECLARING TOTAL INCOME OF RS.1,04,70,940/- AND THE SAME WAS REVISED ON 30.11.2014 AT A TOTAL INCOME OF RS. 1,03,88,920/-. AGAINST THE SAID 2 RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE I NCOME TAX OFFICER, WARD-2(1), SOLAPUR, (HEREINAFTER REFERRED AS ASSESSING OFFICER) VIDE ORDER DATED 19.12.2016 PASSED U/S 143(3) OF THE INC OME TAX ACT (HEREINAFTER REFERRED AS THE ACT) AT A TOTAL INCOME OF R S.1,11,31,270/-. WHILE DOING SO, THE ASSESSING OFFICER HAD DISALLOWED THE CLAIM FOR DEDUCTION OF RS.7,42,345/- U/S 36(1)(VIIA) OF THE ACT ON THE G ROUND THAT THE APPELLANT HAD NOT CREATED THE RELEVANT PROVISIONS AS REQUIRED UNDER THE PROVISIONS OF SEC.36(1)(VIIA) OF THE ACT. HOWEVER, THE ASSE SSING OFFICER TAKING NOTE OF THE FACT THAT THE APPELLANT CO-OPERATIVE B ANK HAD CREATED PROVISION FOR BAD AND DOUBTFUL DEBTS OF RS.1,00,000/- RESTRIC TED THE CLAIM TO RS.1,00,000/- AS AGAINST THE TOTAL CLAIM OF RS.8,42,345/-. 3. BEING AGGRIEVED BY THE ABOVE DISALLOWANCE, THE ASSESSE E PREFERRED APPEAL BEFORE THE LD.CIT(A) WHO FOLLOWING THE DECISION OF THIS C O-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SOLAPUR DISTRICT CENTR AL CO-OPERATIVE BANK LTD., IN ITA NO.1295/PN/2013 DT.30.12.2014 UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. 4. BEING AGGRIEVED BY THE DECISION OF LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE APPELLANT SUBMITTED BEFORE US THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF MAHALAXMI CO-OPERATIV E BANK LTD., VS. ACIT (ITA NO.1658/PN/2011 ORDER DATED 29.10.2013), THE AMOUNT OF DEDUCTION MAY BE ALLOWED EVEN IN RESPECT OF PROVISION FOR STANDARD ASSET OF RS.1,73,093/- CREATED IN THE BOOKS OF ACCOUNT IN RESPE CT OF STANDARD 3 ASSETS. THIS CLAIM WAS MADE BEFORE TRIBUNAL BY WAY OF ADD ITIONAL GROUND OF APPEAL. 6. ON THE OTHER HAND, THE LD.SR. D.R. PLACED RELIANCE ON THE ORDER OF LD.CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT APPEAL RELATES TO THE DISALLOWANCE OF DEDUCTION U/S 36(1)(VIIA) OF THE I.T.ACT. THE PROVISIONS OF SE C.36(1)(VIIA) REQUISITES THAT IN ORDERS TO CLAIM DEDUCTION UNDER THE S AID SECTION, THE PROVISIONS FOR BAD AND DOUBTFUL DEBTS IN RESPECT OF RURAL LOANS AND ADVANCES SHOULD BE CREATED BY DEBITING TO THE PROFIT AN D LOSS ACCOUNT. IN CASE OF NON-SATISFACTION OF THIS CONDITION, DEDUCTION CANN OT BE ALLOWED AS HELD BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE C ASE OF MAHALAXMI CO-OPERATIVE BANK LTD., VS. ACIT (SUPRA) AND SOLA PUR DISTRICT CENTRAL CO-OPERATIVE BANK LTD. (SUPRA). 8. HOWEVER, THE ASSESSING OFFICER HAD RIGHTLY ALLOWED THE D EDUCTION U/S 36(1)(VIIA) TO THE EXTENT OF PROVISIONS FOR BAD AND DOUBT FUL DEBTS CREDITED AT RS.1,00,000/-. HOWEVER, IT IS THE CLAIM OF THE A SSESSEE THAT THE PROVISION FOR STANDARD ASSET OF RS.1,73,093/- SHOULD ALSO BE CONSIDERED AS A PART OF THE PROVISIONS CREATED IN RESPEC T OF BAD AND DOUBTFUL DEBTS OF RURAL LOANS AND ADVANCES. THIS ISSUE REQUIRES VERIFICATION AND THEREFORE WE REMIT THE MATTER BACK TO TH E FILE OF ASSESSING OFFICER FOR DUE VERIFICATION OF PROVISIONS OF STANDARD ASSET A ND ALLOW THE DEDUCTION U/S 36(1)(VIIA) OF THE ACT AFTER SATISFYING HIMSELF AS TO THE FULFILLMENT OF CONDITIONS LAID DOWN UNDER THE PROVISIONS OF SEC .36(1)(VIIA) OF THE ACT. IN THAT SECTION. ACCORDINGLY, WE ORDER REMAN D TO THE 4 ASSESSING OFFICER FOR DENOVO ADJUDICATION OF THE ISSUE IN ACC ORDANCE WITH THE LAW. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 9 TH DAY OF JULY, 2021. SD /- SD/- (S. S. VISWANETHRA RAVI) (INTU RI RAMA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 9 TH JULY, 2021. YAMINI ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. 6. CIT( APPEAL S ) 9, PUNE. PR.CIT 6, PUNE. , , / DR, ITAT, B PUNE; !/ GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.