ACIT, Cuttack V. The Urban Co-op. Bank Ltd, Cuttack

ITA 75/CTK/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0812 (ITAT-CUTTACK)
• Duration Of Justice: 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2011
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 11-11-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 05-03-2010
• Court: TRIBUNAL
• Department Lawyers: D DASHA MISHRA ARS
• Assessee Lawyers: A K GAUTAM
• Keywords: Bad and doubtful debts

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK () BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO. 75/CTK/2010 / ASSESSMENT YEAR 2006 - 07 ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), CUTTACK. - - - VERSUS - THE URBAN CO - OP.BANK LTD.,TINIKONIA BAGICHA, CUTTACK. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI D.DASH/A.MISHRA, ARS / FOR THE RESPONDENT: / SHRI A.K.GAUTAM, DR / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER . THE REVENUE IS IN APPEAL AGITATING THE ACTION OF THE LEARNED CIT(A) IN DELETING ADDITION AMOUNTING TO 5,28,07,658 CLAIMED AS BAD DEBT WRITTEN OFF ON THE GROUND THAT THE ASSESSEE IS NOT REQUIRED TO PROVE THAT THE DEBTS HAD BECOME BAD FOR CLAIMING DEDUC TION U/S.36(1)(VII) OF THE INCOME - TAX ACT,1961 WITHOUT APPLYING THE STIPULATIONS CONTAINED IN PROVISO TO SUB - SECTION (VII) OF SECTION 36(1) AND WITHOUT CONSIDERING THE LIMITATIONS PRESCRIBED IN SUB - CLAUSE (VIIA) OF SECTION 36(1) SPECIFICALLY APPLICABLE TO A CO - OPERATIVE BANK. 2. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION THE ITAT, CUTTACK BENCH IN ASSESSES OWN CASE IN ITA NO.27/CTK/2010 DT.27.7.2010 WHEREIN THE DISALLOWANCE ON ACCOUNT OF CLAIM OF BAD DEBT WAS DECLINED BY THE ASSESSING OFFICER FOR WANT OF ESTABLISHING THE DEBTS HAVING BECOME BAD AND WRITTEN OFF IN THE BOOKS OF ACCOUNT WHICH ISSUE WAS DEALT WITH BY THE TRIBUNAL IN ITS ORDER RELYING ON THE ITAT, DELHI BENCH DECISION IN THE C ASE OF DCIT V. UMA / I.T.A.NO. 75/ CTK/2010 2 INTERNATIONAL BANK THAT THE ASSESSEE NEED NOT PROVE THE DEBTS HAVING BECOME BAD FOR CLAIMING DEDUCTION U/S.36(1)(VII). THE SAME WAS CONFIRMED BY THE HONBLE BOMBAY HIGH COURT AS WELL AND ULTIMATELY BY THE HONBLE APEX COURT. THE CONTENTI ON RAISED BY THE REVENUE IN THIS APPEAL IN THEIR GROUNDS WAS NEITHER RAISED BY THE ASSESSING OFFICER OR THE LEARNED CIT(A) FOR THE STIPULATIONS TO BE PROVIDED SPECIFICALLY APPLICABLE TO A CO - OPERATIVE BANK. 3. THE LEARNED DR AGREED TO THE PROPOSITION THAT THE WRITING OFF OF BAD DEBT WAS DISALLOWED BY THE ASSESSING OFFICER FOR WANT OF THE ASSESSEE ESTABLISHING THAT THE DEBTS HAD BECOME BAD AND HAVE BEEN GENUINELY WRITTEN OFF IN THE IMPUGNED ASSESSMENT YEAR. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE P ERUSED THE MATERIAL AVAILABLE ON RECORD. ON THE BASIS OF FACTS BROUGHT ON RECORD, WE ARE INCLINED TO HOLD THAT THE BASIS OF ASSESSEES APPEAL BEFORE THE TRIBUNAL WAS THE ISSUE WITH RESPECT TO CLAIM OF DEMAND AGAINST SPECIAL ASSETS WAS CONSIDERED FOR ITS ST AY WHEN THE LEARNED CIT(A) HAD ENHANCED FOR TAXATION A SUM OF 13,77,108 AFTER TAKING NOTE OF THE FACT THAT THE WRITE OFF OF BAD DEBTS AMOUNTING TO 5.28 CRORES COULD NOT BE TAXED BY DISALLOWING FOR WANT OF ESTABLISHING GENUINENITY OF THE SAME THEREFORE JUSTIFIES THE LEARNED COUNSELS SUBMISSION BEFORE US THAT THE I SSUE STANDS COVERED ON THE BASIS OF THE GROUND RAISED BY THE DEPARTMENT HAVING BEEN INCORPORATED INTER SE . WE FIND FORCE IN THE SUBMISSION OF THE LEARNED COUNSEL THAT THE OBJECTION BY THE LEARNED DR HAS NO LEGS TO STAND ON, THE ISSUE HAVING BEEN DELIBERATE D BY THE LEARNED CIT(A) FOR CONSIDERATION IN THE APPEAL BY THE ASSESSEE BEFORE THE TRIBUNAL THEREFORE / I.T.A.NO. 75/ CTK/2010 3 SETTLES THE ISSUE IN FAVOUR OF THE ASSESSEE AS POINTED OUT. THE APPEAL FILED BY THE REVENUE IS THEREFORE BOUND TO BE DISMISSED. 5. IN THE RESULT, THE APPE AL OF THE REVENUE IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 25.01.2011 SD/ - SD/ - ( . . . ), ( K.S.S.PRASAD RAO), JUDICIAL MEMBER (. . ), , (K.K.GUPTA), ACCOUNTANT MEMBER. () DATE: 25.01.2011 - COPY OF THE ORDER FORWARDED TO: 1. / THE A PPELLANT : ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), CUTTACK. 2 / THE RESPONDENT: THE URBAN CO - OP.BANK LTD.,TINIKONIA BAGICHA, CUTTACK. 3. / THE CIT, 4. ()/ THE CIT(A), 5. / DR, CUTTACK BENCH 6. GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY.