ACIT, Rohtak v. M/s Rohtak Central Coop. Bank Ltd.,, Rohtak

ITA 2485/DEL/2011 | 2008-2009
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 248520114 RSA 2011
Assessee PAN AAAAT8736B
Bench Delhi
Appeal Number ITA 2485/DEL/2011
Duration Of Justice 2 month(s) 9 day(s)
Appellant ACIT, Rohtak
Respondent M/s Rohtak Central Coop. Bank Ltd.,, Rohtak
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 22-07-2011
Date Of Final Hearing 18-07-2011
Next Hearing Date 18-07-2011
Assessment Year 2008-2009
Appeal Filed On 13-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH G DELHI ] BEFORE THE HONBLE VICEPRESIDENT SHRI G.E. VEERABHA DRAPPA AND SHRI I. P. BANSAL JUDICIAL MEM BER. I. T. A. NO. 2485 (DEL) OF 2011 ASSESSMENT YEAR : 2008-09. ASSTT. COMMISSIONER OF INCOME-TAX THE ROHTAK CENTRAL CO-OP. BANK LTD. ROHTAK CIRCLE VS. D E L H I R O A D R O H T A K. R O H T A K 124 001. P A N / G I R NO. AAA AT 8736 B. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : N O N E; DEPARTMENT BY : SHRI B. R. R. KUMAR SR. D. R. O R D E R. PER I. P. BANSAL JM : THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER PASSED BY THE LD. CIT (APPEALS) DATED 9 TH MARCH 2011 FOR ASSESSMENT YEAR 2008-09. 2. GROUNDS OF APPEAL READ AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT (APPEALS) HAS ERRED IN LAW AS WELL AS ON FACTS DELETING THE ADDIT ION MADE ON ACCOUNT OF SUSPENSE INDIVIDUAL AND SOCIETY FOR AN AMOUNT OF RS.1 31 00 880/-; 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (APPEALS) HAS ERRED IN LAW AS WELL AS ON FACTS DELETING THE ADDIT ION MADE ON ACCOUNT OF INTEREST INCOME ON RS.1 31 00 880/- AMOUNTING TO RS.4 58 530 /-. 2 I. T. A. NO. 2485 (DEL) OF 2011 3.1 THE ASSESSEE IS A CO-OPERATIVE SOCIETY ENGAGED IN ACCEPTING DEPOSITS AND GIVING LOANS AS PER GUIDE-LINES OF NABARD. DURING THE COURSE OF AS SESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THERE WAS AN ADDITION OF A SUM OF RS.1 31 00 880/- IN THE ACCOUNT OF SUSPENSE INDIVIDUAL AND SOCIETY. THE ASSESSING OFFICER ASK ED THE ASSESSEE TO EXPLAIN THE SAME. IT WAS SUBMITTED THAT SUCH AMOUNT DOES NOT REPRESENT INCOM E OF THE ASSESSEE AS THE SAID AMOUNT IS DEPOSITED BY THE INDIVIDUALS AND SOCIETIES WHO SUB MITTED THE SAME TO OPEN NEW ACCOUNTS WHICH COULD NOT BE OPENED BECAUSE OF LACK OF DOCUMENTARY EVIDENCE OR ON ACCOUNT OF LEGAL FORMALITIES. THEREFORE THOSE AMOUNTS ARE TRANSFERRED TO INDIVID UAL & SOCIETY SUSPENSE ACCOUNT. THE SAID AMOUNT WAS TRANSFERRED TO THE RESPECTIVE ACCOUNTS O F INDIVIDUALS AND SOCIETIES AS AND WHEN ACCOUNT-OPENING FORMALITIES WERE COMPLETED. OTHERW ISE ALSO SUCH AMOUNTS COULD NOT BE FOREFEITED BY THE BANK AS SUCH AMOUNT IS REFUNDABLE TO THE RESPECTIVE DEPOSITORS. THUS IT WAS SUBMITTED THAT NO ADDITION CAN BE MADE IN RESPECT O F SUCH AMOUNT. THE ASSESSING OFFICER DID NOT ACCEPT SUCH SUBMISSIONS OF THE ASSESSEE AND HAS ADD ED THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE. 3.2 FURTHER ON THE SAME AMOUNTS AN INTEREST OF RS.4 58 530/- WAS CALCULATED BEING AMOUNT OF INTEREST PAYABLE ON THAT ACCOUNT AT THE RATE OF 3.5 PER CENT APPLICABLE TO THE SAVING BANK ACCOUNT AND THE SAME WAS ALSO ADDED TO THE INCOME OF THE AS SESSEE. 4. ADDITION ON BOTH THESE ACCOUNTS WAS CHALLENGED I N APPEAL FILED BEFORE THE LD. CIT (APPEALS). BEFORE THE LD. CIT (APPEALS) IT WAS SUB MITTED THAT AS A CONDITION PRECEDENT THE PROPOSED CO-OPERATIVE SOCIETIES WHO WERE WILLING T O REGISTER THEMSELVES WITH THE REGISTRAR OF CO-OPERATIVE SOCIETIES WERE TO FOLLOW INSTRUCTIONS OF THE REGISTRAR OF CO-OPERATIVE SOCIETIES BEFORE GRANTING REGISTRATION TO THE NEW SOCIETIES. ONE OF SUCH CONDITION WAS TO OPEN AN ACCOUNT WITH THE NEARBY CO-OPERATIVE BANK NORMALLY RANGING FROM RS.1 000/- TO RS.3 000/- AND SUCH AMOUNT WAS TO BE UTILIZED AS PER THE INSTRUCTIONS O F REGISTRAR OF THE CO-OPERATIVE SOCIETIES. THE BANK ALSO CANNOT RE-PAY OR UTILIZE SUCH AMOUNT AT I TS OPTION OR UPON THE INSTRUCTIONS OF THE DEPOSITORS. SUCH SOCIETIES ARE ALSO REQUIRED TO GE T THEIR ACCOUNTS AUDITED FROM THE AUDITORS APPOINTED BY THE GOVT. AND AUDIT FEES IS BEING PAID BY THE REGISTRAR OF CO-OPERATIVE SOCIETIES OUT OF SUCH ACCOUNTS. IT IS ONLY ON THE FULFILLMENT OF THESE CONDITIONS THE REGISTRAR OF CO-OPERATIVE SOCIETIES WILL PERMIT TO TRANSFER THESE BALANCES TO THE REGULAR ACCOUNTS OF THE SOCIETY AND A 3 I. T. A. NO. 2485 (DEL) OF 2011 DETAILED PROCEDURE WAS ALSO SUBMITTED AND IT WAS CL AIMED THAT THE SAID AMOUNT LYING IN THOSE ACCOUNTS CANNOT IN ANY CIRCUMSTANCES BE TREATED AS INCOME OF THE ASSESSEE. 5. UPON THESE SUBMISSIONS THE LD. CIT (APPEALS) HAS WRITTEN A FINDING THAT THE AMOUNTS OUTSTANDING IN THAT ACCOUNT WAS BELONGING TO THE DE POSITORS WHO WERE READY TO OPEN NEW ACCOUNTS AND WHEN THE ACCOUNTS ARE OPENED THE AMOUN T IS TRANSFERRED TO THE RESPECTIVE ACCOUNTS OTHERWISE THESE AMOUNTS ARE TO BE REFUNDED BACK TO THE RESPECTIVE DEPOSITORS AND IN SUCH A SITUATION THE SAID AMOUNT CANNOT BE ASSESSED AS IN COME OF THE ASSESSEE. THE ASSESSING OFFICER FAILED TO UNDERSTAND THE PROCEDURE THEREFORE THE LD . CIT (APPEALS) HAS DELETED THE ADDITION. HE ALSO HELD THAT WHEN THE FUNDS IN THESE ACCOUNTS ARE AVAILABLE TO THE ASSESSEE FREE OF COST WHICH ARE ADVANCED FOR GENERATING PROCEEDS THE QUESTION OF DERIVING NOTIONAL INTEREST DOES NOT ARISE AND IN THIS MANNER THE LD. CIT (APPEALS) DELETED BO TH THE ADDITIONS. THE REVENUE IS AGGRIEVED HENCE IN APPEAL. 6. NOTICE OF HEARING WAS SERVED UPON THE ASSESSEE. NOBODY APPEARED ON BEHALF OF THE ASSESSEE. AS THE ISSUE IS SMALL WE ARE PROCEEDING TO DECIDE THE PRESENT APPEAL AFTER HEARING THE LD. SR. DR AND AFTER CONSIDERING THE MATERIAL AVAIL ABLE ON RECORD. 7. THE LD. SR. DR RELYING UPON THE ASSESSMENT ORDER PLEADED THAT AMOUNT WAS RIGHTLY ADDED TO THE INCOME OF THE ASSESSEE AND THE SAME HAS WRON GLY BEEN DELETED BY THE LD. CIT (APPEALS). SIMILARLY FOR INTEREST ALSO HE RELIED UPON THE OBSE RVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. SR. DR. WE HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AND THE ORDER PASSED B Y THE LD. CIT (APPEALS). RIGHT FROM THE OPENING IT HAS BEEN THE CONTENTION OF THE ASSESSEE THAT THE AMOUNT OUTSTANDING IN THE ACCOUNTS REPRESENTS THE AMOUNT OF DEPOSITS MADE BY THE PERSO NS WHO INTENDED TO OPEN NEW ACCOUNTS WITH THE ASSESSEE BANK AND UNTIL ALL THE FORMALITIES ARE COMPLETED AND ACCOUNTS OF THE ASSESSEE IS OPENED THE SAID AMOUNT WAS LYING IN THE SAID ACCOU NT. IN CASE OF NON-OPENING OF THE ACCOUNT THE AMOUNT WAS TO BE REFUNDED BACK TO THE RESPECTIV E DEPOSITORS. THESE CONTENTIONS OF THE ASSESSEE HAVE NOT BEEN CONTROVERTED EITHER BY THE A SSESSING OFFICER OR THE LD. CIT (APPEALS) AND THERE IS NO MATERIAL ON RECORD TO SHOW THAT SUCH CO NTENTIONS OF THE ASSESSEE ARE INCORRECT. IF THE AMOUNT DEPOSITED IN THE SAID ACCOUNT BELONG TO THE VARIOUS DEPOSITORS WHO INTENDED TO OPEN THE 4 I. T. A. NO. 2485 (DEL) OF 2011 BANK ACCOUNT WITH THE ASSESSEE THEN THE SAID AMOUN T CANNOT ATTAIN THE CHARACTER OF INCOME IN THE HANDS OF THE ASSESSEE UNLESS IT IS SHOWN THAT T HE SAID AMOUNT HAS BECOME THE INCOME OF THE ASSESSEE. IF THE SAID AMOUNT DOES NOT BELONG TO TH E ASSESSEE AND THE ASSESSEE HAS UTILIZED THE SAME UNTIL THE SAID AMOUNT IS REFUNDED BACK NO NOT IONAL INTEREST CAN BE ADDED TO THAT AMOUNT AS EITHER THE ASSESSEE HAS TO PAY INTEREST IF THE SAID AMOUNT IS CREDITED TO THE SAVING ACCOUNT OR THE AMOUNT ITSELF HAS TO BE REFUNDED BACK IN CASE THE A CCOUNT IS NOT OPENED. THERE IS NO QUESTION OF ASSESSING ANY NOTIONAL INTEREST ON THE SAID AMOUNT. THEREFORE WE FIND NO FAULT OR INFIRMITY IN THE FINDINGS RECORDED BY THE LD. CIT (APPEALS) VIDE WHI CH THE IMPUGNED ADDITION AND INTEREST THEREON IS DELETED WE DECLINE TO INTERFERE. THE A PPEAL FILED BY THE REVENUE BEING DE VOID OF MERIT IS BEING DISMISSED. 9. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 22 ND JULY 2011. SD/- SD/- [ G. E. VEERABHADRAPPA ] [ I. P. BANSAL ] VICE PRESIDENT. JUDICIAL MEM BER DATED : 22 ND JULY 2011. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT (APPEALS) 5. DR ITAT NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR ITAT. 5 I. T. A. NO. 2485 (DEL) OF 2011