M/s Mysore Co-operative Bank Limited , Mysore V. Additional Commissioner of Income Tax Range-2 , Mysore

ITA 904/BANG/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0100 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-07-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 29-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Bad and doubtful debts
• Section: 143(2); 13; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI. B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.904/BANG/2019 ASSESSMENT YEAR : 2012 13 M/S THE MYSORE CO-OP BANK LTD., GANDHI SQUARE, MYSORE 570 001. PAN AAAAT 3068 L VS. THE ADDL. COMMISSIONER OF INCOME-TAX, RANGE-2, MYSURU. APPELLANT RESPONDENT APPELLANT BY : SHRI S.V RAVISHANKAR, ADVOCATE RESPONDENT BY : SHRI KANNAN NARAYANAN, JCIT DATE OF HEARING : 08-07-2021` DATE OF PRONOUNCEMENT : 23-07-2021 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST O RDER DATED 22/02/2019 PASSED BY THE LD. CIT (A), MYSORE ON FOLLOWING GROUNDS OF APPEAL: PAGE 2 OF 9 ITA NO.904/BANG/2019 ---------- THIS SPACE IS LEFT VACANT INTENTIONA LLY ---- PAGE 3 OF 9 ITA NO.904/BANG/2019 BRIEF FACTS OF THE CASE ARE AS UNDER: 2. THE ASSESSEE IS A CO-OPERATIVE BANK AND FILED IT S ORIGINAL RETURN OF INCOME ON 30/09/2011. THE CASE WAS SELECT ED FOR PAGE 4 OF 9 ITA NO.904/BANG/2019 SCRUTINY AND NOTICES UNDER SECTION 143(2) WAS ISSUE D TO ASSESSEE IN RESPONSE TO WHICH THE REPRESENTATIVE OF THE ASSE SSEE APPEARED BEFORE THE LD.AO AND CALLED REQUISITE DETAILS AS CA LLED FOR. BEFORE COMPLETING THE ASSESSMENT IN THE ABSENCE OF SATISFACTORY EXPLANATION THE LD.AO MADE DISALLOWANCES AND COMPUT ED TOTAL INCOME IN THE HANDS OF ASSESSEE AT RS.4,51,92,800/- . 2.1 AGGRIEVED BY THE ORDER PASSED BY THE LD.AO, ASS ESSEE PREFERRED APPEAL BEFORE THE LD.CIT(A). 3. THE LD.CIT(A) WHILE COMPLETING APPELLATE HEARING CONCLUDED THAT THE ADDITION ON DISALLOWANCE MADE UNDER SECTIO N 36(1)(VIIA) OF THE ACT WAS NOT PRESSED BY THE LD.AR AND THEREBY DISMISSED THE GROUND. IN RESPECT OF THE DISALLOWANCE MADE REG ARDING GENERAL BODY MEETING EXPENSES UNDER SECTION 37 (1) THE LD.CIT(A) HELD THAT AS ASSESSEE DID NOT SUBSTANTIATE ITS CLAI M BY WITH DOCUMENTARY EVIDENCES THE ADDITION IS UPHELD. THE O THER ISSUES RAISED BY ASSESSEE WAS ALLOWED. 3.1 AGGRIEVED BY THE ORDER OF LD.CIT(A) ASSESSEE IS IN APPEAL BEFORE US NOW. 4. GROUND NO.3-5 LD.AR SUBMITTED THAT THE ISSUE WAS REMANDED BY COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.552/BANG/2014 & 2000/BANG/2017 FOR ASSESSMENT YEAR 2008-09 BY ORDER DATED 01/03/2019 . HE SUBMITTED THAT, THE LD.AO ALLOWED THE CLAIM IN THE REMAND PROCEEDINGS BY ITAT WHILE GIVING ORDER EFFECT TO AN ORDER PASSED IN ASSESSMENT YEAR 2008-09. PAGE 5 OF 9 ITA NO.904/BANG/2019 5. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 5.1 FOR YEAR UNDER CONSIDERATION, ASSESSEE CLAIMED EXPENSES TOWARDS ANNUAL GENERAL MEETING WHICH WAS DISALLOWED BY THE LD.AO. COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE (SUPRA) REMANDED THE ISSUE TO LD.AO FOR FRESH CONSI DERATION. IN THE REMAND PROCEEDINGS, LD.AO DISALLOWED THE CLAIM TO THE EXTENT THAT WERE NOT SUPPORTED BY ANY BILLS AND VOUCHERS. 5.2 THE LD.AR SUBMITS THAT SIMILAR EXPENDITURE WAS INCURRED BY ASSESSEE FOR YEAR UNDER CONSIDERATION BY HOLDING THAT THESE ARE NOT INCURRED WHOLLY AND EXCLUSIVELY FOR PURPOSE S OF BUSINESS. WE NOTE THAT ASSESSEE MANDATORILY HAS TO CONDUCT GE NERAL BODY MEETINGS ANNUALLY. ALSO THAT, EXCEPT FOR BIFURCATIN G EXPENSES, NOTHING ELSE HAS BEEN PROVIDED BY ASSESSEE TO SUBST ANTIATE ITS CLAIM. WE ARE THEREFORE INCLINED TO REMAND THE ISSU E BACK TO LD.AO FOR VERIFICATION. ASSESSEE IS DIRECTED TO FIL E ALL RELEVANT DETAILS IN SUPPORT OF ITS CLAIM. ACCORDINGLY THESE GROUNDS RAISED BY ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. GROUND NO. 6-8 6. AT THE OUTSET, THE LD.AR SUBMITTED THAT ISSUE AL LEGED IN GROUND NO. 6-8 ARE WITHOUT ANY BASIS. IT HAS BEEN S UBMITTED BY THE LD.AR THAT THE OBSERVATIONS OF LD.CIT (A) THAT ASSESSEE HAD NOT PRESSED THE ISSUE IS INCORRECT. THE LD.AR HAS F ILED AN AFFIDAVIT DATED 17/7/2021 BY THE REPRESENTATIVE OF ASSESSEE W HO APPEARED BEFORE THE LD.CIT(A) CONFIRMING THE FACT THAT NO SU CH STATEMENT WAS MADE IN RESPECT OF THESE ISSUES. PAGE 6 OF 9 ITA NO.904/BANG/2019 6.1 HE SUBMITTED THAT THE DISALLOWANCE MADE BY THE LD.AO UNDER SECTION 36(1)(VIIA) OF THE ACT PERTAINS TO CL AIM OF DEDUCTION IN EXCESS OF PROVISION FOR BAD AND DOUBTFUL DEBTS. 6.2 THE LD.AR DREW OUR ATTENTION TO THE BALANCE SHE ET PLACED AT PAGE 11, 15, 16 OF PAPER BOOK WHEREIN A SPECIFIC PR OVISION AS REQUIRED UNDER SECTION 36(1)(VIIA) OF THE ACT WAS C REATED. HE SUBMITTED THAT THE LD.AO WENT ON A FOOTING THAT THE RE WAS NO SPECIFIC PROVISION THAT WAS CREATED BY ASSESSEE IS IN RESPECT OF THE SAME. AT THE TIME OF HEARING BEFORE THE LD.CIT(A) I NSTEAD OF VERIFYING THE SAME HE SUBMITTED THAT THE LD.CIT(A) DISMISSED THE GROUND BY STATING THAT IT WAS NOT PRESSED. 7. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN LIGHT OF RECORDS PLACED BEFORE US. 7.1 BEFORE US THE ASSESSEE HAD SUBMITTED THAT THOUG H THE NOMENCLATURES USED IS PROVISION FOR NON-PERFORMING ASSET BUT ACTUALLY WITH THE PROVISION HAS BEEN CREATED FOR BA D AND DOUBTFUL DEBTS. THE DEDUCTION IS IN EXCESS OF THE PROVISION FOR BAD AND DOUBTFUL DEBTS WHICH THE LD.AO DISALLOWS. LD.AR PLA CED RELIANCE ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS DAVANGERE DISTRICT CENTRAL COOPERATIVE BANK LTD. REPORTED IN (2021) 123 TAXMANN.COM 37 IN SUPPORT OF HIS CONTENTION. 7.2 WE NOTE THAT HONBLE COURT IN THE ABOVE DECISION HAS OBSERVED AS UNDER: PAGE 7 OF 9 ITA NO.904/BANG/2019 7.3 AT PAGE 11 OF PAPER BOOK ASSESSEE HAS SHOWN IN THE BALANCE SHEET SUM OF RS.2,65,09,200/-IS BAD AND DOUBTFUL RE SERVE AND RS.10,71,000/-AS PROVISION FOR STANDARD ASSETS. FUR THER AT PAGE 15 BEING THE PROFIT AND LOSS ACCOUNT ASSESSEE DEBIT ED RS.12,09,200/- BEING PROVISION FOR NON-PERFORMING A SSETS AND RS.1,07,100/- BEING PROVISION FOR STANDARD ASSETS T HIS SHOWS THAT THE EXCESS OF THE PROVISION HAS NOT BEEN CLAIM ED BY ASSESSEE UNDER SECTION 36(1)(VIIA) HAS NOT BEEN CLAIMED. 7.4 WE THEREFORE DO NOT FIND ANY REASON FOR THE DIS ALLOWANCE TO BE UPHELD. ACCORDINGLY THESE GROUNDS RAISED BY ASSESSEE STANDS ALLOWED. 8. GROUND NO. 1, 2 AND 10-11 ARE GENERAL IN NATURE THEREFORE DO NOT REQUIRE ANY ADJUDICATION. GROUND NO. 9 IS CONSEQUENTIAL. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JULY, 2021 SD/- SD/- (B. R. BASKARAN) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 23D JULY, 2021. PAGE 8 OF 9 ITA NO.904/BANG/2019 /VMS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE PAGE 9 OF 9 ITA NO.904/BANG/2019 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -07-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -07-2021 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -07-2021 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -07-2021 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -07-2021 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -07-2021 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -07-2021 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS