Uttar Banga Kshetrya Gramin Bank, Coochbihar V. DCIT, Circle -2, Jalpaiguri, Jalpaiguri

ITA 846/KOL/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0537 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 28-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Keywords: Bad and doubtful debts

Judgement Text

I.T.A. NO . 846 / KOL ./20 1 2 ASSESSMENT YEAR : 2008 - 2009 & ITA NO. 1 1745 /KOL/201 2 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH , JUDICIAL MEMBER I.T.A. NO. 846 / KOL / 20 1 2 ASSESSMENT YEAR : 200 8 - 20 0 9 & I.T.A. NO. 1745 / KOL / 20 12 ASSESSMENT YEAR : 200 9 - 2010 UTTAR BANGA KSHETRIYA GRAMIN BANK, .... ............ ........ . APPELLANT SUNITY ROAD, DISTRICT - COOCHBEHAR - 736 101 [PAN : AA ACU 9683 Q ] - VS. - ASSISTANT COMMISSIONER OF INCOME TAX, ..... ... ....... ..... . RESPONDE NT CIRCLE - 2, JALPAIGURI AP PEARANCES BY: SHRI RAVI TULSIYAN , FCA , FOR THE ASSESSEE SHRI NIRAJ KUMAR, CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : JULY 0 7 , 2 01 5 DATE OF PRONOUNCING THE ORDER : JU LY 08 , 201 5 O R D E R PER P.K. BANSAL : T HE SE APPEALS HAVE BE EN FILED BY THE ASSESSEE AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) , JALPAIGURI D ATED 23 . 03 .20 12 AND DATED 24.09.2012 FOR THE ASSESSMENT YEAR S 2008 - 09 AND 200 9 - 10 RESPECTIVELY . 2. IN BOTH THE APPEALS, SINCE THE COMMON ISSUES ARE INVOLVE D, WE, THEREFORE, DECIDED TO DISPOSE OF THESE APPEALS BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ALTHOUGH IN THE APPEALS FILED BY THE ASSESSEE, THE ASSESSEE HAS TAKEN AS MANY AS FOUR GROUNDS OF APPEAL IN EACH OF THE ASSESSMENT YEARS, BUT SINCE THE A SSESSEE DID NOT PRESS FIRST THREE GROUNDS, THE ONLY GROUND, WHICH SURVIVES IN BOTH THE APPEALS FOR OUR ADJUDICATION, READS AS UNDER: - I.T.A. NO . 846 / KOL ./20 1 2 ASSESSMENT YEAR : 2008 - 2009 & ITA NO. 1 1745 /KOL/201 2 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 2 OF 4 4. FOR THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT DEDUCTION UNDER SECTION 36(1)(VIIA) OF I.T. ACT, 1 961, BE CALCULATED CONSIDERING THE LOANS AND ADVANCES MADE DURING THE YEAR ONLY BY RURAL BRANCHES AND NOT ON THE CUMULATIVE BALANCES OF LOANS AND ADVANCES OF THE BANK OVER THE YEARS, WHICH IS CONTRARY TO THE RULE 6ABA OF INCOME TAX RULES, 1962 . 3 . WE HAV E HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDER OF TAX AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE RULE 6ABA. WE NOTED THAT THE CIT(APPEALS) WHILE HOLDING THAT THE ASSESSEE AFTER AMENDMENT OF SECTION 36(I)(VIIA)(A) FROM THE ASSESSMENT YEAR 2007 - 08 IS ENTITLED TO DEDUCTION OF PROVISION FOR BAD AND DOUBTFUL DEBTS AS UNDER: - (I) 7.5% OF THE TOTAL INCOME COMPUTED BEFORE MAKING A DEDUCTION UNDER THIS CLAUSE AND CHAPTER - VI - A OF THE INCOME TAX ACT AND (II) 10% OF AGGREGAT E MONTHLY AVERAGE ADVANCES MADE BY THE RURAL BRANCHES OF SUCH BANK COMPUTED IN THE PRESCRIBED MANNER. IN RESPECT OF DEDUCTION UNDER SL. (II) ABOVE, CIT(APPEALS) HAS INCORRECTLY DIRECTED THE ASSESSING OFFICER THAT THE AGGREGATE AVERAGE BALANCE OF ADVANCES MADE BY THE RURAL BRANCHES HAS TO BE CALCULATED CONSIDERING THE LOANS AND ADVANCES MADE DURING THE YEAR IN THE PRESCRIBED MANNER AS ENVISAGED UNDER CLAUSE (VIIA) OF SECTION 36(1) NOT ON THE CUMULATIVE BALANCE OF LOANS AND ADVANCES OF THE BANK OVER THE YEAR S. WE NOTED IN THIS REGARD THAT RULE 6ABA OF THE INCOME TAX RULES, 1962 LAYS DOWN AS UNDER: - 6ABA. - FOR THE PURPOSES OF CLAUSE (VIIA) OF SUB - SECTION (1) OF SECTION 36, THE AGGREGATE AVERAGE ADVANCES MADE BY THE RURAL BRANCHES OF A SCHEDULED BANK SHALL BE COMPUTED IN THE FOLLOWING MANNER, NAMELY: - ( A ) THE AMOUNTS OF ADVANCES MADE BY EACH RURAL BRANCH AS OUTSTANDING AT THE END OF THE LAST DAY OF EACH MONTH COMPRISED IN THE PREVIOUS YEAR SHALL BE AGGREGATED SEPARATELY; ( B ) THE SUM SO ARRIVED AT IN THE CASE OF EACH SU CH BRANCH SHALL BE DIVIDED BY THE NUMBER OF MONTHS FOR WHICH THE I.T.A. NO . 846 / KOL ./20 1 2 ASSESSMENT YEAR : 2008 - 2009 & ITA NO. 1 1745 /KOL/201 2 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 3 OF 4 OUTSTANDING ADVANCES HAVE BEEN TAKEN INTO ACCOUNT FOR THE PURPOSES OF CLAUSE (A); ( C ) THE AGGREGATE OF THE SUMS SO ARRIVED AT IN RESPECT OF EACH OF THE RURAL BRANCHES SHALL BE THE AGGREGATE AVERA GE ADVANCES MADE BY THE RURAL BRANCHES OF THE SCHEDULED BANK. EXPLANATION : IN THIS RULE, RURAL BRANCH AND SCHEDULED BANK SHALL HAVE THE MEANINGS ASSIGNED TO THEM IN THE EXPLANATION TO CLAUSE (VIIA) OF SUB - SECTION (1) OF SECTION 36 . 4. FROM THIS RULE , IT IS APPARENT THAT FOR THE PURPOSE OF SECTION 36(1)(VIIA), THE AGGREGATE AVERAGE ADVANCES MADE BY THE RURAL BRANCHE S OF A SCHEDULE D BANK SHALL BE COMPUTED BY TAKING THE AMOUNT S OF ADVANCES MADE BY EACH RURAL BRANCH AS OUTSTANDING AT THE END OF THE LAST DAY OF EACH MONTH COMPRISED IN THE PREVIOUS YEAR HAS TO BE AGGREGATED SEPARATELY . THE CIT(APPEALS) INSTEAD OF GIVING THE DIRECTION TO THE ASSESSING OFFICER TO TAKE THE AMOUNT OF ADVANCES AS OUTSTANDING AT THE END OF THE LAST DAY OF EACH MONTH IN THE PREVIO US YEAR DIRECTED THE ASSESSING OFFICER TO TAKE LOANS AND ADVANCES MADE DURING THE YEAR ONLY. WE, THEREFORE, SET ASIDE THE ORDER OF CIT(APPEALS) ON THIS ISSUE AND AMEND THE DIRECTION OF THE CIT(APPEALS) AND DIRECT THE ASSESSING OFFICER TO COMPUTE 10% OF THE AGGREGATE MONTHLY AVERAGE ADVANCES MADE BY THE RURAL BRANCH OF SUCH BANK BY TAKING THE AMOUNT OF ADVANCE S BY EACH RURAL BRANCH AS OUTSTANDING AT THE END OF THE LAST DAY OF EACH MONTH COMPRISED IN THE PREVIOUS YEAR AND AGGREGATE THE SAME SEPARATELY AS GIVE N UNDER RULE 6ABA OF THE INCOME TAX RULES, 1962 . 5 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON JU LY 08 , 201 5 . SD/ - SD/ - MAHAVIR SINGH P.K. BANSAL ( JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) KOLKATA, THE 8 TH D AY OF JU LY , 201 5 COPIES TO : (1) UTTAR BANGA KSHETRIYA GRAMIN BANK, I.T.A. NO . 846 / KOL ./20 1 2 ASSESSMENT YEAR : 2008 - 2009 & ITA NO. 1 1745 /KOL/201 2 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 4 OF 4 SUNITY ROAD, DISTRICT - COOCHBEHAR - 736 101 (2) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 2, JALPAI GURI (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTR AR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .