The Jamkhandi Urban Cooperative Bank Ltd., Jamkhandi V. ACIT, Bijapur

ITA 809/BANG/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60791 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 09-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNDER RAJAN
• Assessee Lawyers: ASHOK MUDANUR
• Keywords: Bad and doubtful debts; Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BANGALORE BANGALORE BANGALORE BENCH BENCH BENCH BENCH A AA A BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N. N. N. N. BARAT BARAT BARAT BARATH HH HVAJA SANKAR, VICE VAJA SANKAR, VICE VAJA SANKAR, VICE VAJA SANKAR, VICE- -- -PRESIDENT PRESIDENT PRESIDENT PRESIDENT A AA AND NDND ND SHRI SHRI SHRI SHRI N.V.VASUDEVAN N.V.VASUDEVAN N.V.VASUDEVAN N.V.VASUDEVAN, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO.809 /BANG/2011 (ASSESSMENT YEAR: 2007-08) THE JAMKHANDI URBAN CO-OPERATIVE BANK LTD. UMARAMESHWAR ROAD, JAMKHANDI-587 301. APPELLANT PAN: PAN: PAN: PAN: AAAAT 6971 E AAAAT 6971 E AAAAT 6971 E AAAAT 6971 E VS. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1, BIJAPUR. RESPONDENT APPELLANT BY: SHRI ASHOK MUDANUR, C.A. RESPONDENT BY : SHRI SUNDER RAJAN, JCIT. DATE OF HEARING: 16-07-2012. DATE OF PRONOUNCEMENT: 16-07-2012. O R D E R O R D E R O R D E R O R D E R PER PER PER PER N. BARATHVAJA SANKAR, VP N. BARATHVAJA SANKAR, VP N. BARATHVAJA SANKAR, VP N. BARATHVAJA SANKAR, VP: :: : THIS IS AN APPEAL PREFERRED BY THE ASSESSEE-THE JAMKHANDI CO-OPERATIVE BANK LTD., JAMKHANDI, FOR TH E ASSESSMENT YEAR 2007-08 AGAINST THE APPELLATE ORDER DATED 27-6-2011 OF THE CIT(A), BELGAUM. 2. THERE WAS A DELAY OF FOUR DAYS IN FILING OF THE APPEAL. THE ASSESSEE HAS FILED AN AFFIDAVIT FOR CONDONATION OF DELAY. WE HAVE HEARD BOTH SIDES AND CONSIDERED THE CONTENTS O F THE AFFIDAVIT AND WE ARE CONDONING THE DELAY IN FILING THIS APPEAL. ITA NO.809/BANG/2011 PAGE 2 OF 4 3. HAVING ADMITTED THE APPEAL, LET US GO INTO THE M ERITS OF THE CASE. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CO-OPERATIVE BANK DOING BANKING BUSINESS. FOR THE ASSESSMENT YEAR 2007-08, THE ASSESSEE E-FILED RETURN OF INCOME DECLARING INCOME OF `1,46,25,420/-. THE AO, WHILE PROCESSING THE RETURN U/S 143(3) NOTICED THAT THE ASSESSEE HAD MADE A PRO VISION FOR BAD AND DOUBTFUL DEBTS OF `50 LAKHS. IN THE RETURN OF INCOME, THE ASSESSEE CLAIMED A DEDUCTION OF 11,88,218/- AT THE RATE OF 7.5% OF TOTAL INCOME U/S 36(1)(VIIA) OF THE INCOME- TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT']. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD CLAIMED FU RTHER DEDUCTION U/S 36(1)(VIIA) OF `29,72,000/- FOR ADVAN CES MADE BY THE RURAL BRANCHES OF THE BANK. THE AO, WHILE ALLO WING THE DEDUCTION @ 7.5% OF TOTAL INCOME, DID NOT ALLOW THE DEDUCTION CLAIMED FOR ADVANCES MADE BY RURAL BRANCHES AS THIS DEDUCTION HAD NOT BEEN CLAIMED BY THE ASSESSEE IN THE IN THE RETURN OF INCOME AND NO REVISED RETURN HAD BEEN FILED. THE A O TOOK THE ABOVE DECISION RELYING ON THE JUDGMENTS OF THE APEX COURT IN THE CASE OF GOTZE (INDIA) LTD. VS. CIT (2006)284 ITR 323(SC). AGGRIEVED BY THIS ORDER OF THE AO, THE ASSESSEE MOV ED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORI TY. THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE ASSESSEE, CONFIRMED THE ORDE R OF THE AO FOLLOWING THE DECISION OF THE APEX COURT IN THE CAS E OF GOTZE (INDIA) LTD. (SUPRA). ACCORDING TO HER, CLAIMING OF DEDUCTION B Y WAY OF LETTER TO THE AO WOULD NOT BE PERMISSIBLE IN VIEW OF THE DECISION OF THE APEX COURT. THE ASSESSEE IS STILL AGGRIEVED AND ITA NO.809/BANG/2011 PAGE 3 OF 4 IS ON SECOND APPEAL BEFORE THIS TRIBUNAL WITH THE F OLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE LEARNED ASSESSING OFFICER ORDER REJECTING THE APPELLANT CLAIM OF FULL DEDUCTION U/S 36(1)(VIIA) OF `42,20,390/- ALTHOUGH ELIGIBLE AND ONLY PARTIALLY ALLOWING A SUM OF `12,48,390/- RELYING ON THE CASE OF GOTZE(INDIA) VS. CIT (2006) 284 ITR 323(SC). 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON APPLYING THE PRINCIPLES OF GOTZE(INDIA) WHEREIN THE FACTS OF THAT CASE BEING RELATED TO ASSESSMENT U/S 143(1)(A) WHICH IS DIFFERENT TO THAT OF THE APPELLANT WHO IS ASSESSED U/ 143(3) OF THE INCOME TAX ACT, 1961 IGNORING THE POWERS ENSHRINED TO THE ASSESSING OFFICER TO ALLOW ALL LEGITIMATE DEDUCTIONS UNDER THE INCOME TAX ACT 1961 TO THE APPELLANT EVEN THOUGH NOT CLAIMED. 4. AT THE TIME OF HEARING, LEARNED AR OF THE ASSESS EE REITERATED THE GROUNDS OF APPEAL AS HIS SUBMISSIONS . PER CONTRA, LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THE C ONTENTS OF THE CIT(A)S ORDER AS HIS SUBMISSIONS. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED T HE FACTS AND MATERIAL ON RECORD AND ALSO THE DECISION OF THE APEX COURT IN THE CASE OF GOTZE (INDIA) LTD. (SUPRA). WE FIND THAT THE APEX COURT, IN THE CASE OF GOTZE (INDIA) LTD. (SUPRA) MADE IT CLEAR THAT THE DECISION WAS RESTRICTED TO POWERS OF THE ASSESSING AUTHORITY TO ENTERTAIN A CLAIM FOR DEDUCTION OTHERW ISE THAN BY A REVISED RETURN AND DID NOT IMPINGE ON THE POWER OF THE APPELLATE TRIBUNAL U/S 254 OF THE ACT. HENCE, EXER CISING OUR POWER, WE RESTORE THIS MATTER BACK TO THE FILE OF T HE AO WITH A DIRECTION TO CONSIDER THE CLAIM OF THE ASSESSEE ON MERITS AFTER GIVING EFFECTIVE OPPORTUNITY OF HEARING TO THE ASSE SSEE. THE ITA NO.809/BANG/2011 PAGE 4 OF 4 ASSESSEE IS ALSO HEREBY DIRECTED TO CO-OPERATE WITH THE AO BY PRODUCING DETAILS SOUGHT FOR IN DECIDING THE ISSUE. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE END OF TH E HEARING ON 16 TH JULY, 2012 . SD/- SD/- (N. (N. (N. (N.V. V.V. V.VASUDEVAN VASUDEVAN VASUDEVAN VASUDEVAN) )) ) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER (N.BA (N.BA (N.BA (N.BARATHVAJA SANKAR) RATHVAJA SANKAR) RATHVAJA SANKAR) RATHVAJA SANKAR) VICE VICE VICE VICE- -- -PRESIDENT PRESIDENT PRESIDENT PRESIDENT EKS COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE