JILA SAHKARIKENDRIYA BANK MARYADIT,REWA V. INCOME TAX OFFICER , REWA

ITA 36/JAB/2023

AI Insights

The case involves Jila Sahkari Kendriya Bank Maryadit appealing against the order of the CIT(A), which upheld the additions made by the AO regarding undisclosed income and unaccounted interest receipts. The primary contention was the addition of Rs.1,34,24,166 as income from undisclosed sources, which the assessee argued pertained to transactions with primary agricultural credit societies and not directly to the bank. The CIT(A) upheld the AO's decision, citing lack of evidence from the assessee to substantiate their claims. The Tribunal, however, found merit in the assessee's request for a re-examination of the facts, particularly in light of the corrections made to Form 26AS, and thus restored the matter to the AO for a detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23894 (ITAT-JABALPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHARAT DEORAJ SHEOGANKAR
• Assessee Lawyers: C.P. RAWKA
• Keywords: Income from undisclosed sources; TDS; FORM 26AS
• Section: 250; 43B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SH. KUL BHARAT, VICE PRESIDENT & SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER I.T.A. No. 36/JAB/2023 (Assessment Year : 2014-15) Jila Sahkari Kendriya Bank Maryadit, 5, JB Civil Lines, Rewa, Reewa (M.P.) 486001 बनाम/ Vs. The Income Tax Officer, Ward-1, Rewa, Rewa (M.P.) ̾थायीलेखासं./जीआइआरसं./PAN No. AAAAJ1908K (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथȸ कȧ ओर से / Appellant by : Sh. C.P. Rawka, Adv Ĥ×यथȸ कȧ ओर से/Respondent by : Sh. Bharat Deoraj Sheogankar, DR सुनवाई कȧ तारȣख / Date of Hearing : 06/01/2025 घोषणा कȧ तारȣख / Date of Pronouncement : 08/01/2025 आदेश / O R D E R PER NIKHIL CHOUDHARY, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the order of the ld. CIT(A), NFAC, passed under section 250 of the Income Tax Act, 1961 on 30.12.2022. The grounds of appeal are as under:- “1. The ld. CIT(A) has erred in law and on facts of the case in passing order without affording reasonable opportunity of hearing and considering assessee's request for adjournment uploaded on 29/12/2022. The appeal order passed by National Faceless Appeal Centre may please be quashed. 2 ITA No. 36/JAB/2023 Jila Sahkari Kendriya Bank Maryadit 2. That the learned CIT Appeal as well as Assessing Officer has erred in law and on facts of the case in making / confirming addition of Rs.1,34,24,166/- on the basis of amount reflected in 26AS without verifying the factual position. The entire addition is, illegal, unjustified, without any basis should be quashed in toto. 3. Without prejudice to the above ground Rs. 1,21,22,912/- reflected in AS26 paid by deductor M/s M. P. State Civil Supply Corporation, Rewa, do not belongs to the present assessee. Necessary correction have already been made by deductor M/s M. P. State Civil Supply Corporation, Rewa, in AS 26. The addition so made and confirmed by CIT Appeal is without any basis and verification. The entire addition may please be deleted in toto. 4. Without prejudice to the ground No. Two the addition of Rs. 9,20,164/- on account of interest from bank of Baroda as reflected in AS 26 is not correct. The assessee has fully recorded interest in the books of account. The addition so made and confirmed by CIT Appeal may please be deleted. 5. Without prejudice to the ground No. one the addition of Rs. 381090/- on account of interest from Central Bank of India as reflected in AS26 is not correct. The assessee has fully recorded interest in the books of account. The addition so made and confirmed by CIT Appeal may please be deleted. 6. The addition of Rs. 330711/- on account of unaccounted liabilities/ receipts by applying provision u/s 43B of The Income Tax Act is not correct. The liability as stated pertain to earlier years, no fresh liability were created during the year. The addition so made and confirmed by CIT Appeal may please be deleted. 7. That The applicant reserves his right to raise additional ground or grounds of appeal those may arise at the time of hearing of this appeal.” 2. The facts of the case are that the assessee filed a return of income for the A.Y. 2014-15 declaring total income of rupees Nil in the capacity of an AOP. During the course of assessment proceedings, it was found that the receipt shown in Form 26AS of the assessee was not credited in the profit and loss account amounting to a total of Rs.1,34,24,166/-. The ld. AO observed that the assessee had both failed to show the above receipt of Rs. 1,34,24,166/- and also failed to claim the TDS in respect of the same. At that time, the ld. AR of the assessee submitted that these amounts did not pertain to the bank, it pertained to the societies for whom paddy and wheat were procured by the M.P. Civil Supplies Corporation Limited and the payment was made to them but the assessee bank had not submitted any supporting documents 3 ITA No. 36/JAB/2023 Jila Sahkari Kendriya Bank Maryadit in its claim. Therefore, the ld. AO treated the income of Rs.1,34,24,166/- as income from undisclosed sources and added the same back to the total income of the assessee. Before the ld. CIT(A), it was submitted that the entire addition was based on amount reflected in Form 26AS. It was submitted that primary agricultural credit societies from whom paddy and wheat were procured were members of the assessee cooperative bank and when purchases were effected from primary agricultural credit societies for procurement purposes of M.P. Civil Supplies Corporation Limited, the deductor corporation did not make the payments to the primary agriculture credit societies directly, but they made payments to the assessee cooperative bank instead. It is for this reason that the assessee had not returned such receipts as income and also not claimed the TDS relating to this income. It was further submitted that for the A.Y. 2012-13, where the similar issue had come up, significant relief had been given. The ld. CIT(A) held that the assessee had failed to bring any evidence on record to show that the primary agricultural credit societies had disclosed this income with regard to the receipts stated to be received by them from M.P. Civil Supplies Corporation Limited. He, therefore, upheld the decision of the ld. AO making the said addition. The ld. CIT(A) also upheld the additions to the extent of Rs.13,01,254/- on account of interest from Bank of Baroda, as reflected in Form 26AS, and income from Central Bank of India, as reflected in Form 26AS. Rejecting the pleas of the assessee that the same interest already stood accounted for in its books of accounts, he held that the assessee had failed to give a proper explanation during the course of the appellate proceedings and therefore he upheld the addition. Finally, the ld. CIT(A) upheld the addition of Rs.3,30,711/- in respect of liabilities shown in its balance-sheet and added back by the ld. AO, under section 43B of the Income Tax Act. The ld. CIT(A) disregarded the submission of the assessee that the liabilities pertained to earlier years and no fresh liability was created during the year and therefore, section 43B did not apply for this year. 4 ITA No. 36/JAB/2023 Jila Sahkari Kendriya Bank Maryadit 3. The assessee is aggrieved at this dismissal of his appeal by the ld. CIT(A) and has accordingly come before us in appeal. Sh. C.P. Rawka, Advocate (hereinafter referred to as the ‘ld. AR’) submitted that the M.P. State Civil Supplies Corporation Limited had made the necessary corrections in the Form 26AS and therefore, he prayed that the matter could be restored to the file of the ld. AO, so that the ld. AO could verify the correct facts and thereafter determine whether any of the amounts formerly reflected in its Form 26AS was assessable in the hands of the assessee or not. Similarly, he prayed that the issue of interest from Bank of Baroda and Central Bank of India may also be restored back to the file of the ld. AO, so that the assessee could demonstrate how the interest income was accounted for in its books of accounts. Finally, the ld. AR prayed that the matter of unaccounted liabilities/receipts added back under section 43B could be restored to the file of the ld. AO so that the assessee could demonstrate that these did not pertain to the year in question but rather, to earlier years. 4. Sh. Bharat Deoraj Sheogankar, Departmental Representative (hereinafter referred to as the ‘ld. DR’ appearing on behalf of the Revenue did not have any objection to the restoration of the matter to the file of the ld. AO but submitted that the direction should be given to the assessee to make prompt compliance before the ld. AO failing which an adverse view could be taken in the matter. 5. We have duly considered the facts and circumstances of the case. In view of the fact that the major additions have been made on account of discrepancy in Form 26AS and the returned income such Form 26AS is now stated to be revised on account of correction statements filed by the M.P. State Civil Supplies Corporation Limited, we deem it appropriate to restore the matter back to the file of the ld. AO for a fresh decision in accordance with law, after considering the evidence produced by the assessee before him. Furthermore, we also direct the assessee to produce the necessary evidences to show that it had accounted for the interest income that was reflected in Form 26AS, in its books of accounts and finally, we direct the assessee to 5 ITA No. 36/JAB/2023 Jila Sahkari Kendriya Bank Maryadit produce evidence before the ld. AO that the liabilities in question did not pertain to the current assessment year but to an earlier year, thereby taking it out of the purview of section 43B for this assessment year. The ld. AO may consider these and pass fresh orders in accordance with law. 6. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 08.01.2025. Sd/- Sd/- (KUL BHARAT) (NIKHIL CHOUDHARY) VICE PRESIDENT Accountant Member Jabalpur. 08/01/2025 Sh (On tour) आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent 3. आयकर आयुÈत / CIT - concerned 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, जबलपुर / DR, ITAT, Jabalpur 5. गाड[ फाईल / Guard File आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलȣय अͬधकरण, जबलपुर / ITAT, Jabalpur "