ITO, Rewari V. The Rewari Central Co-op Banl Ltd., Rewari

ITA 947/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3559 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 24-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.947/DEL/2016 A.Y. : 2012-13 ITO, WARD-2, REWARI VS. THE REWARI CENTRAL COOP BANK LTD., CIRCULAR ROAD, REWARI (PAN: AAAAT7998P) (ASSESSEE) (RESPONDENT) REVENUE BY : MS. ASHIMA NEB, SR. DR ASSESSEE BY : SH. SANJEEV JAIN, CA ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THIS APPEAL AGAINST THE IMPU GNED ORDER DATED 02.12.2015 OF THE LD. CIT(A), GURGAON REL EVANT TO ASSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED IN THIS APPEAL READ AS UNDER :- 2 1. ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION AMOUNTING TO RS. 38,91,395/- MADE BY THE AO ON ACCOUNT OF ACCRUED INTEREST ON NPA WITHOUT APPRECIATING THE FACTS BROUGHT ON ASSESSMENT ORDER. 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, MODIFY, DELETE AND OR CHANGE IN THE ABOVE GROUND ON OR BEFORE THE DATE OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FI LED THE RETURN OF INCOME DECLARING OF RS. 38,31,395/- ON 25.9. 2012. THE AO NOTED THAT AO NOTED THAT ASSESSEE HAD NOT SH OWN ANY INTEREST INCOME ON NPAS ACCOUNTS ON ACCRUAL BASIS. THE AO HELD THAT AS THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING THE INTEREST ON NPAS ACCOUNTS WAS TAX ABLE ON ACCRUAL BASIS. THE AO ACCORDINGLY, ADDED AN AMOUNT O F RS. 38,31,395/- TO THE TOTAL INCOME OF THE ASSESSEE ON TH IS ACCOUNT AND ASSESSED THE INCOME OF THE ASSESSEE AT RS. 97,9 0,130/-. AGAINST THE AFORESAID ASSESSMENT ORDER, ASSESSEE APP EALED BEFORE THE LD. CIT(A)-GURGAON WHO VIDE HIS IMPUGNED ORDER 3 DATED 02.12.2015 HAS PARTLY ALLOWED THE APPEAL OF TH E ASSESSEE. AGGRIEVED WITH THE ORDER OF THE LD. CIT( A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. LD. DR RELIED UPON THE ORDER OF THE AO AND REITER ATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 5. ON THE CONTRARY, LD. COUNSEL OF THE ASSESSEE RELI ED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT LD. CIT( A) HAS PASSED A WELL REASONED ORDER BY RESPECTFULLY FOLLO WING HIS OWN DECISION DECIDED IN THE CASE OF ROHTAK CENTRAL COOP BANK, IN APPEAL NO. 516/14-15 AY 2012-13 VIDE ORDER DATED 21.10.2015 WHEREIN THE LD. CIT(A) HAS FOLLOWED THE ITA T, DELHI H BENCH DECISION DATED 13.2.2015 PASSED IN THE CA SE OF ACIT VS. THE ROHTAK CENTRAL COOP BANK LTD. ROHTAK IN ASS ESSMENT YEAR 2007-08 IN ITA NO. 2839/DEL/2011, WHICH DOES NO T NEED ANY INTERFERENCE ON OUR PART AND REQUESTED THAT FOL LOWING THE SAME RATIO, THE ORDER OF THE LD. CIT(A) MAY BE UPHEL D BY DISMISSING THE APPEAL OF THE REVENUE. FOR THE SAKE OF CONVENIENCE, HE PLACED THE COPY OF THE AFORESAID D ECISION BEFORE THE BENCH. 4 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS, ESPECIALLY THE IMPUGNED ORDER AND THE FIND INGS OF THE TRIBUNAL IN THE AFORESAID CASE. WE FIND THAT ITAT, DELHI H BENCH VIDE ORDER DATED 13.2.2015 PASSED IN THE CASE OF ACIT VS. THE ROHTAK CENTRAL COOP BANK LTD. ROHTAK IN ASS ESSMENT YEAR 2007-08 IN ITA NO. 2839/DEL/2011 ON SIMILAR FA CTS, HAS HELD AS UNDER:- 3.4 WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN QUESTION IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN THE CASE OF ACIT VS. THE JHAJJAR CENTRAL COOP. BANK (SUPRA). THE RELEVANT FINDING OF THE TRIBUNAL READS AS FOLLOW:- (PARA 11) 'CONSIDERING THE ABOVE SUBMISSION OF THE ASSESSEE WHICH IS WELL SUPPORTED BY RBIINABARD CIRCULAR DATED 17.8.2002 VIDE PARA NO. 3.1 CLEARLY STATES THAT THE POLICY OF INCOME 5 RECOGNITION SHOULD BE BASED ON RECORD OF RECOVERY AND THEREFORE UNREALIZED INCOME SHOULD NOT BE TAKEN INTO PROFIT AND LOSS ACCOUNT BY STATE CO-OP BANK 1 CENTRAL CO-OP BANKS AND THAT THE PROVISIONS OF SECTION 43D OF THE ACT ARE CLEAR REGARDING THE RECOGNITION OF INTEREST INCOME ON NPA. THE LD. CIT(A) IN OUR VIEW HAS THUS RIGHTLY HELD THAT OVERDUE INTEREST NOT REALIZED DURING THE YEAR AND CREDITED TO SUSPENSE INTEREST ACCOUNT CANNOT BE TAKEN TO BE THE INCOME OF THE ASSESSEE. THUS THE LD.CIT(A) HAS THUS RIGHTLY DELETED THE ADDITION IN QUESTION. THE SAME IS UPHELD. THERE IS NO SUBSTANCE IN THE CONTENTION OF THE LD. DR THAT THE ASSESSEE WAS HAVING NO OBJECTION TO THIS ADDITION, SINCE WE FIND THAT IT WAS AN ALTERNATIVE SUBMISSION OF THE 6 ASSESSEE BEFORE THE AO THAT 'EVEN IF ANY ADDITION IS TO BE MADE OF RS.1,29,91,989/- THEN ADDITION OF RS. 1,00,51,715/- IS TO BE MADE ON ACCOUNT OF INTEREST OF EARLIER YEARS CREDITED (LURING THE YEAR TO P & L ACCOUNT'. EVEN OTHERWISE THE AO IS SUPPOSED TO MAKE JUST ASSESSMENT BASED ON THE PROVISIONS OF LAWS WHICH CANNOT BE IGNORED SINCE IS AGREEABLE TO THE PROPOSED WRONG ADDITION. THE GROUND NO.3 IS ACCORDINGLY REJECTED.' 3.5. IN VIEW OF THE COORDINATE BENCH ORDER OF THE TRIBUNAL IN THE CASE OF CIT V S. THE JHAJJAR CENTRAL COOP. (SUPRA); WHICH IS IDENTICAL TO THE FACTS OF THE INSTANT CASE, WE REJECT THE GROUND NO.1 RAISED BY THE REVENUE. IT IS ORDERED ACCORDINGLY. 6.1 AFTER PERUSING THE AFORESAID FINDINGS OF THE T RIBUNAL, WE ARE OF THE CONSIDERED OPINION, THAT THE ISSUE IN DIS PUTE IS 7 SQUARELY COVERED BY THE AFORESAID DECISION OF THE T RIBUNAL AND THEREFORE, THE LD. CIT(A) HAS RESPECTFULLY THE AFORE SAID FINDINGS OF THE TRIBUNAL AND ALSO HIS OWN FINDINGS IN EARLIER YEAR AND RIGHTLY DELETED THE ADDITION IN DISPUTE, WHICH D OES NOT NEED ANY INTERFERENCE ON OUR PART, THEREFORE, WE UPHOLD TH E WELL REASONED ORDER PASSED BY THE LD. CIT(A) ON THE ISSUE IN DISPUTE AND ACCORDINGLY REJECT THE GROUNDS RAISED BY THE REVENUE. 7 IN THE RESULT, THE APPEAL FILED BY THE REVENUE ST ANDS DISMISSED. ORDER PRONOUNCED ON 01/02/2018. SD/- SD/- [PRASHANT MAHARISHI] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 01/02/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. ASSESSEE - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES