A.C.I.T., Circle-2, Gwalior V. Bhind District Co-operative, Bhind

ITA 9/AGR/2013

• Counselvise Citation: 920314 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 03-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: WASEEM ARASHAD
• Keywords: Bad and doubtful debts
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO. 09/AGRA/ 2013 ASSESSMENT YEAR 2009-10 A.C.I.T., CIRCLE-2, VS. BHIND DISTRICT COOPERATI VE CENTRAL LTD. GWALIOR SADAR BAZAR, BHIND. (PAN AAAAB 1172 B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARASHAD, SR. D.R. RESPONDENT BY : NONE DATE OF HEARING : 04.06.2014 DATE OF PRONOUNCEMENT : 04.06.2014 ORDER PER PRAMOD KUMAR, ACCOUNTANT MEMBER: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER OF THE LEARNED CIT(A) DATED 18.10.2012 IN THE MATTER OF ASSESSMENT FRAMED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 FOR THE A.Y. 2009-10, ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, LD. CIT(A) ERRED IN ALLOWING DEDUCTION U/S. 36(1)(VIIA) BEING 10% OF THE AVERAGE ADVANCES ITA NO.09/AGRA/2013 2 MADE BY RURAL BRANCHES WITHOUT APPRECIATING THAT TH IS DEDUCTION IS AVAILABLE ONLY FOR SCHEDULE BANK AS PER RULE 6ABA OF THE INCO ME TAX RULE, 1992. 2. WITHOUT PREJUDICE TO THE ABOVE, LD. CIT(A) ERRED IN ALLOWING THE QUANTUM OF DEDUCTION U/S. 36(1)(VIIA) READ WITH RUL E 6ABA BEING 10% OF THE AGGREGATE AVERAGE ADVANCES MADE BY RURAL BRA NCHES WITHOUT APPRECIATING THE PHRASE COMPRISED IN THE PREVIOUS Y EARS MENTIONED IN CLAUSE (A) UNDER RULE 6ABA WHICH RESTRICTS THE AMOU NT OF DEDUCTION TO THE EXTENT OF AVERGE AGGREGATE ADVANCES MADE BY THE ASSESSEE DURING PREVIOUS YEAR ONLY. 2 . WE HAVE HEARD SHRI WASEEM ARSHAD, LEARNED DEPARTMEN TAL REPRESENTATIVE, BUT NONE APPEARED FOR THE ASSESSEE. WE HAVE ALSO PE RUSED THE MATERIAL ON THE RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CA SE IN THE LIGHT OF APPLICABLE LEGAL POSITION. 3. THE ISSUE IN THIS APPEAL LIES IN RATHER NARROW C OMPASS OF MATERIAL FACTS. THE ASSESSEE BEFORE US IS A COOPERATIVE BANK BY THE NAM E OF BHIND DISTRICT COOPERATIVE CENTRAL LTD. DURING THE ASSESSMENT PROC EEDINGS, THE ASSESSING OFFICER DISALLOWED PROVISION FOR DOUBTFUL DEBTS AMOUNTING T O RS.8,15,53,000/-. WHILE DOING SO THE ASSESSING OFFICER OBSERVED THAT THIS P ROVISION HAS BEEN MADE ON AN ANTICIPATION BASIS AND THE LIABILITY/LOSS BEING NOT ACTUALLY ARISEN DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER FURTHER OBSERVED THAT A LIABILITY/LOSS TO BECOME DEDUCTION MUST HAVE ACTUALLY BEEN ARISEN OR BE INCURRED AND NOT MERELY ANTICIPATED AS CERTAIN TO OCCUR. IT WAS FURTHER OB SERVED THAT IN THE PRESENT CASE LIABILITY HAS NOT ACCRUED AND ACCORDINGLY THE SAME WAS NOT ALLOWED. AGGRIEVED BY ITA NO.09/AGRA/2013 3 THE STAND SO TAKEN BY THE ASSESSING OFFICER, ASSESS EE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A). 4. LEARNED CIT(A) IN HIS BRIEF, RATHER CRYPTIC ORDE R UPHELD THE ADMISSIBILITY OF DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT, WHI CH IS CONFINED TO 10% OF THE AVERAGE ADVANCES OF RURAL BRANCHES OF THE SCHEDULE BANK AS AGAINST CLAIM OF DEDUCTION FOR PROVISION FOR DOUBTFUL DEBTS AMOUNTIN G TO RS.8,15,53,000/-, LEARNED CIT(A) GRANTED RELIEF, SO WORKED OUT, OF RS.7,37,91 ,900/-. THE ASSESSING OFFICER IS AGGRIEVED OF THE RELIEF SO GRANTED BY THE LEARNED C OMMISSIONER (APPEALS) AND IS IN APPEAL BEFORE US. 5. AS EVIDENT FROM A PLAIN LOOK ON THE GROUNDS OF APPEAL, THE SHORT GRIEVANCES RAISED BY THE ASSESSING OFFICER IS THAT DEDUCTION U NDER SECTION 36(1)(VIIA) READ WITH RULE 6ABA IS RESTRICTED ONLY TO SCHEDULE BANK AND THAT THERE IS NOTHING ON RECORD TO SHOW THAT THE ASSESSEE IS A SCHEDULE BANK . WE HAVE ALSO NOTED THAT THIS ASPECT OF THE MATTER HAS NOT BEEN CONSIDERED BY THE LEARNED COMMISSIONER (APPEALS) IN HIS ORDER NOR HAS EVEN THE ASSESSING O FFICER EXAMINED THIS ASPECT OF THE MATTERPERHAPS BECAUSE THIS PLEA WAS NEVER RAIS ED BEFORE THE ASSESSING OFFICER. WHAT WAS CLAIMED OF THE ASSESSING OFFICER WAS A DEDUCTION SIMPLICITOR FOR PROVISION FOR DOUBTFUL DEBTS AND IT WAS DISALLOWED ON GROUNDS OTHER THEN THE GROUNDS WHICH HAVE BEEN CONSIDERED BY THE LEARNED C OMMISSIONER. THE ITA NO.09/AGRA/2013 4 APPLICABILITY OF SECTION 36(1)(VIIA) DID NOT COME U P FOR CONSIDERATION BEFORE THE ASSESSING OFFICER AT ALL. IN THIS VIEW OF THE MATTE R AND BEARING IN MIND, ENTIRETY OF THE FACTS, WE ARE OF THE CONSIDERED VIEW THAT AIMS OF JUSTICE REQUIRES THAT THE MATTER SHOULD BE RESTORED TO THE FILE OF THE ASSESSING OFF ICER FOR ADJUDICATION DE NOVO ON THIS ASPECT. IT IS OPEN TO THE ASSESSEE TO MAKE HIS CLAIM UNDER SECTION 36(1)(VIIA) AND SUBSTANTIATE FOR WHATEVER MATERIAL THE ASSESSEE DEEMS FIT. THE ISSUE REGARDING ELIGIBILITY OF DEDUCTION UNDER SECTION 36(1)(VIIA) IS ALSO REMAINS OPEN. THE ASSESSING OFFICER SHALL, AFTER GIVING DUE OPPORTUNI TY OF HEARING TO THE ASSESSEE WILL DECIDE THE ADMISSIBILITY OF HIS CLAIM BY WAY OF SPE AKING ORDER AND IN ACCORDANCE WITH LAW. WE DIRECT SO. 6. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES IN THE TERMS INDICATED ABOVE AND THIS ORDER IS DICTATED AND PRON OUNCED IN THE OPEN COURT ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (JOGINDER SINGH) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUN TANT MEMBER AMIT/ ITA NO.09/AGRA/2013 5 COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, AGRA TRUE COPY