M/s The Punjab State Coop Bank Ltd., Chandigarh V. ACIT, C-2(1), Chandigarh

ITA 814/CHANDI/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2030 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-01-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 24-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 43D

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 814/CHD/2019 / ASSESSMENT YEAR : 2013-14 THE PUNJAB STATE COOPERATIVE BANK LTD., SCO 175-187,SECTOR 34-A CHANDIGARH VS. ! THE ASSTT. CIT, CIRCLE-2(1), CHANDIGARH ' # ./ PAN NO: AAAAP0253B '$/ APPELLANT &''$ / RESPONDENT ()*+ /ASSESSEE BY : SHRI ATUL GOYAL, CA *+ / REVENUE BY : SMT. GEETINDER MANN, JCIT , -*) .# /DATE OF HEARING : 21.01.2020 /0 *) .# / DATE OF PRONOUNCEMENT : 27 02.2020 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 22.3.2019 OF THE COMMISSIONER OF INCOME TAX-1, CHANDIGARH [HEREINAFTER REFERRED TO AS CIT(A)] 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. CIT(A) HAS ERRED IN LAW IN ISSUING ENHANCEMENT NOTICE UNDER SECTION 251(2) OF THE INCOME TAX ACT, 1961. ITA NO. 814-CHD/2019 THE PUNJAB STATE COOPERATIVE BANK LTD., CHANDIGARH 2 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N CONSIDERING THE AMOUNT OF RS. 12087000/- AS INCOME OF THE ASSESSEE UNDER THE PROVISIONS OF SECTION 43D OF THE ACT. 3. THAT LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONSIDERING THE AMOUNT OF RS. L2087000/-AS INCOME OF THE ASSESSEE WHEN THE ASSESSEE ITSELF HAS DECLARED THE SAME AS INCOME IN AY 2016-17 AND 2017-18 AT THE TIME OF ACCRUAL OF INCOME. 4. THAT CIT(A) IS ERRED IN LAW IN INTERPRETING THE WORDS 'ACTUALLY RECEIVED' UNDER SECTION 43D OF THE ACT. 5. THAT THE LD. CIT-(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.743000/- ON ACCOUNT OF OTS AMOUNT RECEIVED PENDING ADJUSTMENT WHEN THE AMOUNT HAS NOT ACCRUED TO THE ASSESSEE. 6. THAT THE LD CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.743000/- UNDER SECTION 41 OF THE ACT. 7. THAT THE LD CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.743000/- WHEN THE ASSESSEE HAS UNCLAIMED PROVISION FOR NPA AMOUNTING TO RS.3828.94 LACS. 8. THE ASSESSEE CRAVES PERMISSION TO ADD, AMEND OR DELETE ANY GROUND OF APPEAL BEFORE THE FINALIZATION OF APPELLATE PROCEEDINGS. 3 . GROUND NOS. 1, 2, 3 & 4 : THE SOLE ISSUE RAISED THROUGH GROUND NOS. 1 TO 4 IS REGARDING THE YEAR OF TAXABILITY OF INTEREST INCOME OF RS. 1,20,87,000/- RECEIVED BY THE ASSESSEE ON NON-PERFO RMING ASSETS. THE ITA NO. 814-CHD/2019 THE PUNJAB STATE COOPERATIVE BANK LTD., CHANDIGARH 3 ASSESSEE OFFERED THE SAID INCOME IN THE RETURN OF I NCOME FOR TAXATION IN ASSESSMENT YEARS 2016-17 & 2017-18, WHEREAS, THE AS SESSING OFFICER TAXED THE SAME IN THE ASSESSMENT YEAR 2014-15. HOWE VER, THE LD. CIT(A) WHILE DECIDING THE ISSUE IN THE CROSS APPEAL S OF THE ASSESSEE AS WELL AS OF THE REVENUE FOR ASSESSMENT YEAR 2014-15 HELD THAT THE SAID INCOME WAS TO BE ASSESSED IN THE ASSESSMENT YEAR 20 13-14 I.E. THE YEAR UNDER CONSIDERATION. HE, ACCORDINGLY ENHANCED THE I NCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 4. BOTH THE LD. REPRESENTATIVES OF THE PARTIES HAVE SUBMITTED THAT IN AN APPEAL AGAINST THE ORDER OF THE CIT(A) FOR ASSES SMENT YEAR 2014-15, THE ISSUE HAS BEEN RESTORED BACK BY THE TRIBUNAL VI DE ORDER DATED 6.12.2019 PASSED IN ITA NO.1365/CHD/2018 ALONGWITH C.O.NO. 4/CHD/2019. THE RELEVANT PART OF THE ORDER OF THE T RIBUNAL FOR THE ASSESSMENT YEAR 2014-14 IS REPRODUCED AS UNDER:- 8. THE LD. DR STATED THAT SECTION RELATED TO THE TAXABILITY OF INTEREST AND BEFORE INTERPRETING THE SAID SECTION, THE LD. DR CONTENDED, WHAT WAS RELEVANT WAS THE FACT THAT THE CIT(A) HAD ACCEPTED THE ALLOCATION OF RECOVERY MADE BY THE ASSESSEE BANK OF RS.1.73 CRORES BETWEEN THE INTEREST AND PRINCIPAL AS RS.91 LACS AND RS.79 LACS RESPECTIVELY WITHOUT VERIFYING THE BASIS OF THE SAME. HE PLEADED THAT BEFORE APPLYING THE PROVISIONS OF SECTION 43D OF THE ACT IT WAS REQUIRED TO FIRST VERIFY WHAT THE COMPONENT OF INTEREST WAS IN THE ENTIRE RECOVERY MADE AND THE LD.CIT(A) BY MERELY ACCEPTING THE BIFURCATION MADE BY THE ASSESSEE HAD ALLOWED RELIEF TO THE ASSESSEE WITHOUT VERIFYING TH E QUANTUM TO WHICH THE PROVISIONS OF SECTION 43D OF THE ACT WAS APPLICABLE. ITA NO. 814-CHD/2019 THE PUNJAB STATE COOPERATIVE BANK LTD., CHANDIGARH 4 9. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, CONTENDED THAT EVEN THE ASSESSEE WAS AGGRIEVED WITH THE FINDINGS OF THE CIT(A) ON THIS ISSUE TREATING THE INTEREST COMPONENT TAXABLE IN ASSESSMENT YEAR 2013-14 AS AGAINST THAT RETURNED BY THE ASSESSEE FOR ASSESSMENT YEARS 2015-16 AND 2016-17 WHEN THE AMOUNT HAD FINALLY ACCRUED TO THE ASSESSEE WHEN THE HIGH COURT HAD DENIED STAY TO THE GUARANTOR FROM WHOM THE AMOUNT HAD BEEN RECOVERED. IT WAS CONTENDED THAT EVEN THE ACCOUNTING STANDARDS TREATED RECEIPT OF THE AMOUNT ONLY WHEN THERE WAS CERTAINTY OF THE SAME AND IN ASSESSMENT YEAR 2013-14 THERE WAS NO CERTAINTY OF RECEIPT OF THE AMOUNT SINCE THE GUARANTOR HAD FILED CASE AGAINST THE ORDER OF THE COURT MAKING RECOVERY. AT HIS JUNCTURE THE LD.COUNSEL FOR THE ASSESSEE WAS ASKED TO ADDRESS THE MANNER AND BASIS ON WHICH THE AMOUNT RECOVERED HAD BEEN BIFURCATED BY IT BETWEEN THE INTEREST AND PRINCIPAL AMOUNT. TO THIS THE LD.COUNSEL FOR THE ASSESSEE WAS UNABLE TO GIVEN A PLAUSIBLE EXPLANATION, STATING THAT IT WAS SYSTEM GENERATED. THE LD.COUNSEL FOR THE ASSESSEE AGREED THAT THE MATTER BE RESTORED BACK TO THE CIT(A) TO VERIFY AND DETERMINE THE QUANTUM OF INTEREST IN THE AMOUNT RECOVERED. 10. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES. WE HAVE GONE THROUGH THE ORDERS OF THE CIT(A) AND THE AO ALSO. THE LD.CIT(A) HAS HELD THE INTEREST COMPONENT, IN THE TOTAL AMOUNT RECOVERED, AS TAXABLE IN THE YEAR OF RECEIPT AS PER THE PROVISIONS OF SECTION 43D OF THE ACT AND HAS TAKEN THE FIGURE OF INTEREST IN THE TOTAL AMOUNT RECOVERED AS THAT SHOWN BY THE ASSESSEE IN ITS BOOKS IN THE SUBSEQUENT YEARS I.E. 2015-16 AND 2016-17 WHEN IT CREDITED THE AMOUNT TO ITS PROFIT & LOSS ACCOUNT.THE LD.CIT(A) HAS NOT VERIFIED THE INTEREST COMPONENT IN THE SAME, WHICH THE LD.COUNSEL FOR THE ASSESSEE ADMITTED WAS SYSTEM GENERATED AND COULD NOT GIVEN A PLAUSIBLE BASIS FOR THE SAME. IN VIEW OF THE SAME, SINCE THE FACT RELATING TO THE PRESENT ISSUE VIS--VIS THE AMOUNT OF INTEREST EARNED BY THE ASSESSEE HELD LIABLE FO R TAXATION AS PER SECTION 43D OF THE ACT ,REMAINS TO BE DETERMINED AND VERIFIED, WE CONSIDER IT FIT TO RESTORE THE ISSUE BACK TO THE CIT(A) TO FIRST ITA NO. 814-CHD/2019 THE PUNJAB STATE COOPERATIVE BANK LTD., CHANDIGARH 5 DETERMINE THE SAME AND THEREAFTER ADJUDICATE THE ISSUE IN ACCORDANCE WITH LAW. NEEDLESS TO ADD THAT THE ASSESSEE IS FREE TO RAISE ALL CONTENTIONS BEFOR E THE CIT(A), WHO IN TURN IS DIRECTED TO DECIDE THE ISSUE AFTER DEALING WITH THE SAME AND PASSING A SPEAKING ORDER IN THIS REGARD. 5. IN VIEW OF THIS, SINCE THE VERY ISSUE RELATING T O TAXABILITY OF THE INTEREST INCOME OF RS. 1,20,87,000/- HAS ALREADY BE EN RESTORED BY THE TRIBUNAL TO THE FILE OF THE CIT(A) AND THE ISSUE WI TH REGARD TO THE YEAR OF THE TAXABILITY IS ALSO UNDER THE CONSIDERATION O F THE SAID CIT(A), HENCE, GROUND NOS.1 TO 4 ARE ACCORDINGLY RESTORED TO THE FILE OF THE CIT(A) TO BE DECIDED IN VIEW OF THE DIRECTIONS, AS REPRODUCED ABOVE, BY THE ITAT VIDE ORDER DATED 6.12.2019 FOR THE ASSESSM ENT YEAR 2014-15. 6. GROUND NOS. 5, 6 & 7 : THE ISSUE RAISED THROUGH GROUND NOS. 5, 6 & 7 IS RELATING TO THE TAXABILITY OF THE AMOUNT OF RS. 7,43,000/- RECEIVED BY THE ASSESSEE ON ACCOUNT OF ONE TIME SETTLEMENT WITH REGARD TO THE NON-PERFORMING ASSETS. THE LD. COUNSEL IN THIS RESP ECT HAS MOVED AN APPLICATION FOR ADDITIONAL EVIDENCES WHICH READS AS UNDER:- DATED: 20-01-2020 THE PRESIDING OFFICER, INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH - BENCH - B CHANDIGARH. SUBJECT:- PERMISSION TO FILE ADDITIONAL EVIDENCE IN IT A. NO. 814/CHANDIGARH/2019 IN CASE OF PUNJAB STATE CO-OPER ATIVE BANK LTD CHANDIGARH -A.Y. 2013-14. SIR/MADAM, ITA NO. 814-CHD/2019 THE PUNJAB STATE COOPERATIVE BANK LTD., CHANDIGARH 6 KINDLY REFER TO THE SUBJECT CITED ABOVE. IN THIS CONNECTION IT IS SUBMITTED THAT PUNJAB STAT E CO-OPERATIVE BANK LTD. CHANDIGARH HAD FILED THE ABOVE REFERRED A PPEAL DURING MAY 2019 AGAINST THE ORDERS OF LD CIT(A) CHA NDIGARH ON 8 GROUNDS OF APPEAL. OUT OF THAT GROUND NO. 5 WA S AS UNDER::- 'THAT THE LEARNED CIT(A) CHANDIGARH HAS ERRED IN LAW IN CONFIRMING THE ADDITION OF RS.743000/- ON ACCOUNT OF OTS AMOUNT RECEIVED PENDING ADJUSTMENT WHEN THE AMOUNT HAS NOT ACCRUED TO THE ASSESSEE' THE LD. CIT (A) CHANDIGARH HAD DECIDED THE ISSUE VI DE ORDERS DATED 22-03-2019 HOLDING THAT THE ASSESSEE WAS ASKE D TO PROVIDE PARTY-WISE DETAILS OF OTS BUT HE FAILED TO SUBMIT THE SAME. INITIALLY THE ASSESSEE HAD STATED THAT IT HAD DECLARED THE AMOUNT OF OTS RECEIVED AMOUNTING TO RS.743000/- AS INCOME DURING THE YEAR UNDER CONSIDERATION. LATER HE CHANG ED THE STAND THAT IT HAD NOT BOOKED THE AMOUNT AS INCOME . HOWEV ER IT HAS FAILED TO SHOW THE AMOUNT AS INCOME WHICH HAS BEEN RECOVERED FROM THE NPA'S . THE AO HAS RIGHTLY TREATED THE SAM E AS INCOME OF THE ASSESSEE. IN THIS REGARD IT IS SUBMITTED THAT ACCORDING TO OT S SCHEME 2011, THE CUSTOMERS WHO HAD TAKEN CONSUMER LOANS AN D THERE AMOUNT BECAME NPA UP TO 31-03-2006 WILL BE ELIGIBLE FOR RELIEF UNDER THIS OTS SCHEME. ACCORDINGLY THE ASSESSEE HAD ENTERED INTO ONE TIME SETTLEMENT WITH 14 CUSTOMERS DURING T HE YEAR. THE SAME WAS NOT AVAILABLE WITH THE ASSESSEE AT THA T POINT OF TIME. HOWEVER SUBSEQUENTLY THE INFORMATION HAS BEEN RECEIVED FROM THE AUDITORS ON THE BASIS OF WHOSE COMMENTS TH E ADDITION HAS BEEN MADE BY THE LD. A.O. THE DOCUMENTS ARE CRUCIAL EVIDENCE TO DEMONSTRATE T HAT THE AMOUNT OF RS. 7.43 LACS PROVIDED BY THE AUDITORS AN D ALSO TO APPRECIATE AND UNDERSTAND THE OTS POLICY. OUR PRAYER ITA NO. 814-CHD/2019 THE PUNJAB STATE COOPERATIVE BANK LTD., CHANDIGARH 7 IN VIEW OF THE FOREGOING DISCUSSIONS WE ARE ENCLOSI NG HEREWITH COPIES OF THE FOLLOWING DOCUMENTS AS ADDITIONAL EVI DENCE WITH THE REQUEST THAT THE SAME KINDLY BE ADMITTED UNDER RULE 29. IT IS RESPECTFULLY SUBMITTED THAT FACTS WOULD PLAY A PIVO TAL ROLE FOR PROPER CONSIDERATION AND ADJUDICATION OF THE APPEAL . GRAVE PREJUDICE WOULD BE CAUSED TO THE APPELLANT IF THESE DOCUMENTS ARE NOT PERMITTED TO BE FILED. A) DETAILS OF ACCOUNTS B) LEDGER ACCOUNTS OF THE CUSTOMERS HOPE TO BE ACCOMMODATED AND OBLIGED. THANKING YOU, YOURS SINCERELY, SD/- COUNSEL FOR ASSESSEE ( ATUL GOYAL) 7. SINCE THE ADDITIONAL EVIDENCES SOUGHT TO BE PROD UCED BY THE ASSESSEE GO TO THE ROOT OF THE CASE AND ARE VERY MU CH NECESSARY FOR JUST AND PROPER DECISION ON THIS ISSUE, HENCE, THE ADDIT IONAL EVIDENCE SOUGHT TO BE PRODUCED BY THE ASSESSEE ARE DIRECTED TO BE A DMITTED. THE ISSUE IS RESTORED TO THE FILE OF THE CIT(A) FOR DECISION AFR ESH WITH THE DIRECTIONS THAT THE LD. CIT(A) WILL ADMIT THE EVIDENCES FURNIS HED BY THE ASSESSEE REGARDING THE TAXABILITY OF THE AFORESAID AMOUNT OF RS. 7,43,000/-, CONSIDER THE EVIDENCE AND EXPLANATION GIVEN BY THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW BY WAY OF A SPEAKI NG ORDER. 8. GROUND NO.8 : THIS GROUND IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 814-CHD/2019 THE PUNJAB STATE COOPERATIVE BANK LTD., CHANDIGARH 8 ORDER PRONOUNCED IN THE OPEN COURT ON 27.02.2020. SD/- SD/- ( . . / N.K. SAINI) ( / SANJAY GARG) !'# / VICE PRESIDENT $% / JUDICIAL MEMBER DATED : 27.02. 2020 .. 2*&)34 54 ) / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. &''$ / THE RESPONDENT 3. , 6) / CIT 4. , 6) ( )/ THE CIT(A) 5. 47 &)8 , .8 , 9:;< / DR, ITAT, CHANDIGARH 6. ;= - / GUARD FILE 2 , / BY ORDER, > / ASSISTANT REGISTRAR