The Faridkot Central Co-Op Bank Ltd,, Fridkot v. The Asstt. Commissioner of Income-tax,, Ferozepur

ITA 298/ASR/2013 | 2007-2008
Pronouncement Date: 07-10-2013

Appeal Details

RSA Number 29820914 RSA 2013
Assessee PAN AAAJT0420H
Bench Amritsar
Appeal Number ITA 298/ASR/2013
Duration Of Justice 5 month(s) 1 day(s)
Appellant The Faridkot Central Co-Op Bank Ltd,, Fridkot
Respondent The Asstt. Commissioner of Income-tax,, Ferozepur
Appeal Type Income Tax Appeal
Pronouncement Date 07-10-2013
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 07-10-2013
Date Of Final Hearing 10-09-2013
Next Hearing Date 10-09-2013
Assessment Year 2007-2008
Appeal Filed On 06-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU JUDICIAL MEMBER AND SH. B.P.JAIN ACCOUNTANT MEMBER I.T.A. NO.298(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN :AAAJT0420H THE FARIDKOT CENTRAL COOP. BANK LTD. VS. ASSTT. COM MR. INCOME TAX FARIDKOT. CIRCLE-III FEROZEPUR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.PRANAV GUPTA ADV. RESPONDENT BY:SH.TARSEM LAL DR DATE OF HEARING: 10/09/2013 DATE OF PRONOUNCEMENT:07/10/2013 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A) BATHINDA DATED 19.02.2013 FOR THE ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT ERRED IN UPHOLDING THE ADDITION OF RS.686 78/- U/S 40(A)(IIA) FOR THE DEFAULT U/S 194A AS THE PROVIS IONS OF SECTION 194A ARE NOT APPLICABLE TO THE ASSESSEE BEING A C OOPERATIVE ITA NO.298(ASR)/2013 2 SOCIETY. ACCORDINGLY THE ADDITION OF RS.68678/- IS LIABLE TO BE DELETED. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT ERRED IN UPHOLDING THE ADDITION OF RS.30806 7/- ON ACCOUNT OF PROVISIONS OF STANDARD ASSETS AS THE SAM E HAS BEEN MADE AS PER THE DIRECTIONS OF RBI AS THE ASSESSEE I S A CO-OP. BANK NOT NBFC. ACCORDINGLY THE ADDITION OF RS.30806 7/- IS LIABLE TO BE DELETED. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT ERRED IN UPHOLDING THE ADDITION OF RS.30806 7/- ON ACCOUNT OF PROVISIONS OF STANDARD ASSETS AS THE SAM E WAS NOT DISALLOWED IN THE PRIOR ASSESSMENT YEARS AND LATER ASSESSMENT YEARS. THE LD. CIT(A) SHOULD HAVE FOLLOWED THE RULE OF CONSISTENCY AND SHOULD HAVE ALLOWED THE CLAIM OF TH E ASSESSEE. 2. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS G ROUND NO.1 AND THEREFORE THE SAME IS DISMISSED AS NOT PRESSED. 3. AS REGARDS GROUNDS NO. 2 & 3 THE BRIEF FACTS A S NOTED BY THE A.O. IN PARA 6 ARE AS UNDER: 6. THE ASSESEE BANK HAS DEBITED RS.3 08 067/- AS PROVISIONS AGAINST STANDARD ASSETS. THESE BEING PROVISIONS A ND NOT ASCERTAINED LIABILITY ARE NOT ADMISSIBLE AND ARE DISALLOWED AND ADDED BACK. 4. THE LD. CIT(A) VIDE PARA 5 HAS DISMISSED THE GRO UND OF THE ASSESSEE WHICH FOR THE SAKE OF CONVENIENCE IS REPRODUCED AS UNDER: ITA NO.298(ASR)/2013 3 5. THAT THE LD. AO ERRED IN MAKING AN ADDITION OF RS.3 08 067/- ON ACCOUNT OF PROVISION OF STANDARD ASSETS & THE S AME IS IN ACCORDANCE WITH THE PROVISION OF S-36(1)(VIIA)(A) OF THE ACT. IT WOULD BE CLEAR FROM THE CALCULATION @ 7.5% OF THE INCOME ASSESSED BY AO AT RS.39 22 483/- (4230550/- -308067/-). THE AO SHOUL D HAVE SEEN THE ASSESSED INCOME AND NOT THE INCOME/LOSS AS PER P&L ACCOUNT. ACCORDINGLY THE ADDITION OF RS.2 94 186/- OUT OF RS.3 08 067/- IS LIABLE TO BE DELETED. THE ASSESSEE IS FURTHER ENTI TLED TO DEDUCTION UPTO 10% OF THE AGGREGATE AVERAGES ADVANCES MADE BY THE RURAL BRANCHES OF THE ASSESSEE. IT IS IN ACCORDANCE WITH THE GUID ELINES OF RBI/NBARD. THE AO HAS NOT DENIED THIS FACT. ACCORD INGLY WHOLE OF THE ADDITION IS LIABLE TO BE DELETED. 5. THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT THE PROVISION OF STANDARD ASSES IS ALLOWABLE IN VIEW OF THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF CATHOLIC SYRIAN BANK LTD. VS. COMMISSIONER OF INCOME TAX REPORTED IN (2012) 343 ITR 270 AND IN THE CASE OF DCIT & ANR VS. KARNATAKA BANK LTD; REPORTED IN 349 ITR 705(SC). 6. THE LD. DR ON THE OTHER HAND ARGUED THAT THE C ASES RELIED UPON ARE NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE AND THEREFORE PRAYED TO CONFIRM THE ORDER OF THE LD. C IT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. ON PERUSAL OF THE ORDER OF THE A.O. IT APPEARS THAT THE ASSESSEE BANK HAS DEBITED RS.3 08 067/-AS PROVISIONS AGAINST STANDARD ASSETS. THE ASSESSEE HAS CLAIMED THE SAME THAT THE SAID PROVISION OF STANDAR D ASSET HAS BEEN MADE IN ITA NO.298(ASR)/2013 4 ACCORDANCE WITH THE PROVISIONS OF SECTION 36(1)(VII A)(A) AND THE SAME SHOULD BE COMPUTED AS PER ASSESSED INCOME AND NOT AS INCOM E AS PER PROFIT & LOSS ACCOUNT AND HE IS ENTITLED TO DEDUCTION UPTO 10% OF THE AGGREGATE AVERAGE ADVANCES MADE BY THE RURAL BRANCHES OF THE ASSESSEE BANK IN ACCORDANCE WITH THE GUIDELINES OF RBI/NBARD. ON PERUSAL OF THE ORDER OF THE A.O. AS WELL AS THE LD. CIT(A) AS REPRODUCED HEREINABOVE NONE OF THE AUTHORITIES BELOW HAVE PASSED A SPEAKING ORDER. THE AO HAS REFE RRED THAT THESE ARE THE PROVISIONS AND NOT ASCERTAINED LIABILITY AND THEREF ORE NOT ADMISSIBLE. NO FINDING IN THIS REGARD HAS BEEN GIVEN AS TO HOW TH E PROVISIONS ARE NOT ADMISSIBLE. THE LD. CIT(A) HAS REJECTED THE CLAIM OF THE ASSESSEE SINCE SIMILAR CLAIM OF ANOTHER ASSESSEE ON THE SAME ISSUE HAS BEEN REJECTED BY HIS PREDECESSOR. THE REASONING GIVEN BY THE LD. CIT(A) CANNOT BE A REASON TO PASS THE ORDER AND DECIDE THE ISSUE. THE ORDERS PAS SED BY BOTH THE AUTHORITIES ARE WITHOUT ANY REASON AND ARE NOT SPEAKING ORDERS. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE MATTER IS SET ASIDE TO THE FILE OF THE A.O. WHO IS DIRECTED TO PASS A SPEAKING ORDER KEEPING IN VIE W THE PROVISIONS OF SECTION 36(1)(VIIA)(A) OF THE ACT AND DECIDE THE ISSUE AFRE SH IN ACCORDANCE WITH LAW. THE AO IS FURTHER DIRECTED TO PROVIDE ADEQUATE OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. THUS GROUNDS NO. 2 & 3 OF THE ASSESS EE ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NO.298(ASR)/2013 5 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IN ITA NO.298(ASR)/2013 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7TH OCT. 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 7TH OCT. 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:THE FARIDKOT CENTRAL CO-OP. BANK LTD. HUKKI CHOWK FARIDKOT 2. THE ACIT CIR.III FEROZPUR. 3. THE CIT(A) BATHINDA. 4. THE CIT BATHINDA. 5. THE SR DR ITAT AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.