M/s. LIC of India staff Co-op Bank Ltd, Trivandrum v. The ITO, Trivandrum

ITA 544/COCH/2009 | 2004-2005
Pronouncement Date: 18-07-2011

Appeal Details

RSA Number 54421914 RSA 2009
Assessee PAN AAALL0085C
Bench Cochin
Appeal Number ITA 544/COCH/2009
Duration Of Justice 1 year(s) 8 month(s)
Appellant M/s. LIC of India staff Co-op Bank Ltd, Trivandrum
Respondent The ITO, Trivandrum
Appeal Type Income Tax Appeal
Pronouncement Date 18-07-2011
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 18-07-2011
Date Of Final Hearing 16-06-2011
Next Hearing Date 16-06-2011
Assessment Year 2004-2005
Appeal Filed On 18-11-2009
Judgment Text
IN THE INCOME TAX APPELLAT E TRIBUNAL COCHIN BEN CH COCHIN BEFORE S/SHRI N.VIJAYAKUMARAN JM AND SANJAY AR ORA AM I.T.A. NO. 544/COCH/2009 ASSESSMENT YEAR:2004-05 M/S. LIC OF INDIA STAFF CO- OPERATIVE BANK LTD. JEEVAN PRAKASH PATTOM TRIVANDRUM- 695 004 [PAN AAALL 0085C]. VS. THE INCOME TAX OFFICER WARD- 1(1) TRIVANDRUM. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY SHRI N. VASUDEV RAJKUMAR CA-AR REVENUE BY MS. VIJAYAPRABHA DR O R D E R PER SANJAY ARORA AM: THIS AN APPEAL BY THE ASSESSEE ARISING OUT THE OR DER BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-I TRIVANDRUM (CIT(A) FOR SH ORT) DATED 15.9.2009 AND THE ASSESSMENT YEAR UNDER REFERENCE IS 2004-05. 2.1 EXPLAINING ITS CASE IT WAS SUBMITTED BY THE L D. AR THE ASSESSEES COUNSEL THAT THE ASSESSEE IS A CO-OPERATIVE SOCIETY IN EXISTENCE SI NCE 1953 WITH A SOUND SYSTEM OF ACCOUNTING; ITS ANNUAL ACCOUNTS DULY AUDITED BEIN G PLACED BEFORE AND PASSED IN THE GENERAL BODY MEETING OF ITS MEMBERS FROM YEAR TO YE AR. IT RETURNED ITS INCOME FOR THE YEAR AT ` 157411/- ON 4.3.2008; ITS INCOME (I.E. IN THE MAIN ) BEING EXEMPT U/S. 80P OF THE INCOME-TAX ACT 1961 ('THE ACT' HEREINAFTER). THE CONSEQUENT ASSESSMENT LED TO ADDITIONS AS BY WAY OF DISALLOWANCE OF 10% OF THE ADMINISTRAT IVE EXPENSES (AT ` 608768/-); DEPRECIATION DISALLOWED ( ` 57073/-); DONATIONS ` 19 000/- BESIDES ` 40852/- BOOKED UNDER THE HEAD OTHER INCOME WHICH WAS NOT CONSID ERED AS ELIGIBLE FOR DEDUCTION U/S. 80P. THE ASSESSEE IS IN APPEAL ONLY AGAINST THE FI RST TWO ADDITIONS HAVING BEEN SINCE I.T.A. NO. 544/COCH/2009 2 SUSTAINED BY THE FIRST APPELLATE AUTHORITY VIDE THE IMPUGNED ORDER. CONTINUING FURTHER IT WAS SUBMITTED THAT THE ASSESSEE HAS DULY MAINTAINED BOOKS OF ACCOUNTS AND THE CORRESPONDING VOUCHERS WHICH COULD HAVE BEEN FURNI SHED BEFORE THE ASSESSING OFFICER I.E. IF SO REQUIRED BY HIM. THE LD. CIT(A) HOWEVE R HAS UPHELD THE DISALLOWANCE ON THE BASIS THAT THE ASSESSEE WAS UNABLE TO SUBSTANTIATE ITS CLAIM QUA EXPENDITURE UNDER THE HEAD `ADMINISTRATIVE EXPENSES AS BEING FULLY SUPPO RTED BY VOUCHERS. LIKEWISE FOR THE OTHER DISALLOWANCE IN RESPECT OF DEPRECIATION WHIC H WAS ALSO FOR THE REASON OF LACK OF EVIDENCE IN SUPPORT OF THE PURCHASE. IN FACT ITS E NTIRE INCOME SAVE THAT ALREADY DENIED EXEMPTION U/S. 80P IS SUBJECT TO DEDUCTION U/S. 80 P SO THAT IRRESPECTIVE OF THE MERITS OF THE DISALLOWANCES MADE THE SAME WOULD NOT RESULT I N ANY ADDITION TO ITS TOTAL INCOME UNDER THE ACT. 2.2 THE LD. DR ON THE OTHER HAND WOULD SUB MIT THAT THE ASSESSEE HAS NOWHERE DENIED THAT IT FAILED TO PRODUCE THE VOUCHERS I.E. THE SOURCE DOCUMENTS IN SUBSTANTIATION OF ITS CLAIMS FAILING WHICH ONLY THE IMPUGNED DISA LLOWANCES STAND EFFECTED. AS SUCH THE ASSESSING AUTHORITY WAS FULLY JUSTIFIED IN DISALLOW ING THE IMPUGNED CLAIMS. THE ASSESSEE HAS FAILED TO FURNISH ANY EVIDENCE IN REBUTTABLE OF THE FINDINGS BY THE AUTHORITIES BELOW BOTH OF WHOM ALLOWED IT AMPLE OPPORTUNITY TO DO SO OR OF EVEN ADDUCE SOME EVIDENCE TOWARD THE SAME EVEN BEFORE THE TRIBUNAL. NO INTERF ERENCE WITH THE ORDERS OF THE REVENUE AUTHORITIES IS CALLED FOR AND THE ASSESSEES GRIEV ANCE IS MISCONCEIVED. RELIANCE WAS PLACED BY HER ON THE DECISIONS IN THE CASE OF T.V. SUNDARAM IYENGAR & SONS LTD. V. CIT 241 ITR 420 (MAD.); ANNAMMA ALEXANDER V. CIT 176 ITR 229 (KER.); AND CIT V. S. DEVRAJ 73 ITR 1 (MAD.) BESIDES BY THE TRIBUNAL AS IN T HE CASE OF GOODYEAR INDIA LTD. VS. CIT 66 TTJ 164; JAMMU RURAL BANK VS. ITO 92 TTJ (ASR) 791; AND CIT VS. NAGPUR ZILLA KRISHI AUDYOKIK SAHAKARI SANGH LTD . 209 ITR 481 (BOM.). WITH REGARD TO THE ASSESSEES ALTERNATIVE CONTENTION THE SAME WOULD R EQUIRE A SPECIFIC FINDING OF FACT I.E. TO THE EFFECT HAT THE DISALLOWANCE AS EFFECTED IS QUA THE INCOME WHICH IS SUBJECT TO DEDUCTION U/S. 80P AS IT MAY WELL BE THAT THE SAME HAS NO RE LEVANCE OR BEARING ON THE SAID INCOME. I.T.A. NO. 544/COCH/2009 3 3. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD AS WELL AS THE CASE LAW CITED. 3.1 WHERE THE ASSESSEE IS UNABLE TO SUBSTANTIATE ITS CASE WITH THE RELEVANT EVIDENCE/S THE ASSESSING AUTHORITY IS FULLY JUSTIFIED IN EFFECTING THE DISALLOWANCE TO THE SAID EXTENT; THE ONUS TO PROVE ITS RETURN BEING ONLY ON THE ASSESSEE AND THE POWER OF THE ASSESSING AUTHORITY IN THE MATTER OF ASSESSMENT BEING PLENARY . THE ONLY LIMITATION THERETO WOULD BE WITH REGARD TO THE OBSERVANCE OF THE PRINCIPLES OF NATURAL JUSTICE OF WHICH WE FIND NO BREACH NOR ANY STANDS PLEADED; THE ASSESSEE HAVING BEEN AFFORDED AMPLE OPPORTUNITY TO PRESENT ITS CASE. THE ASSESSEE HAS THROUGHOUT FAILE D TO SUBSTANTIATE ITS CLAIM BY PRODUCING THE DOCUMENTS FOR VERIFICATION BEFORE THE AUTHORITI ES BELOW SO THAT ITS CLAIM OF HAVING DULY MAINTAINED THE VOUCHERS AND OTHER SUPPORTING D OCUMENTS WOULD BE OF LITTLE RELEVANCE. THE DISALLOWANCE OF THE EXPENSES CONSIDE RED NOT GENUINE OR VERIFIABLE IS THUS VALID IN LAW WHICH WE FIND TO BE AT 10% OF THE ADM INISTRATIVE EXPENSES AS WELL AS THE DEPRECIATION CLAIM ON THE ASSETS OSTENSIBLY PURCHA SED FOR ` 107600/- ALBEIT UNEVIDENCED. THE SAME IN OUR VIEW SATISFIES THE TEST OF REASON ABILITY WHICH IS THE OTHER OVER-ARCHING CONSIDERATION THAT HAS TO BE SATISFIED EVEN AS NO SPECIFIC PLEA QUA THE SAME STANDS RAISED AT ANY STAGE INCLUDING BEFORE US. 3.2 WITH REGARD TO THE ASSESSEES ALTERNATIVE CLAIM RAISED PER ITS GROUND NO. 3 BEFORE US I.E. THAT ITS ENTIRE INCOME BEING SUBJECT TO D EDUCTION U/S. 80P THE DISALLOWANCE/S WOULD BE TO NO EFFECT WE FIND THE SAME AS MAINTAIN ABLE. THIS IS FOR THE REASON THAT WHERE THE DISALLOWANCE RESULTS IN ADDITION TO ITS INCOME WHICH IS SUBJECT TO DEDUCTION INFLATION THERETO ON ASSESSMENT EXCEPT WHERE SPECIFICALLY PR ECLUDED BY LAW WOULD LEAD TO A CORRESPONDING INCREASE IN SAID DEDUCTION AS WELL; T HE SAME ONLY OPERATING TO INCREASE THE QUALIFYING INCOME. THIS IS AS THE CHARACTER OF THE INCOME WHICH IS ONLY ON THE BASIS OF THE ACTIVITIES GIVING RISE TO THE INCOME SUBJECT TO EXEMPTION WOULD REMAIN UNCHANGED. SO HOWEVER WE AGREE WITH THE LD. DR THAT THE SAME WOULD REQUIRE A FINDING OF FACT AS IT IS NOT CLEAR FROM THE MATERIAL ON RECORD IF THE DI SALLOWANCE/S RELATES TO INCOME ON WHICH DEDUCTION U/S. 80P STANDS CLAIMED AND ALLOWED. WE THEREFORE ONLY CONSIDER IT FIT AND PROPER TO IN THE FACTS AND CIRCUMSTANCES OF THE CA SE AS WELL AS IN THE INTEREST OF JUSTICE I.T.A. NO. 544/COCH/2009 4 RESTORE THE ASSESSMENT BACK TO THE FILE OF THE ASSE SSING OFFICER WITH A LIMITED PURVIEW TO EXAMINE AND ADJUDICATE PER A SPEAKING ORDER AND A FTER HEARING THE ASSESSEE IN THE MATTER IF EITHER OF THE DISALLOWANCES IS IN RELATION TO TH E INCOME WHICH HAS BEEN ALLOWED AS DEDUCTIBLE U/S. 80P AND MODIFY THE ASSESSMENT ACCO RDINGLY. WE DECIDE ACCORDINGLY. 4. IN THE RESULT THE ASSESSEES APPEAL IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. SD/- SD /- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 18TH JULY 2011 GJ COPY TO: 1. M/S. LIC OF INDIA STAFF CO-OPERATIVE BANK LTD. JEEVAN PRAKASH PATTOM TRIVANDRUM- 695004. 2. THE INCOME TAX OFFICER WARD-1(1) TRIVANDRUM. 3 . THE COMMISSIONER OF INCOME-TAX (APPEALS)-I TRI VANDRUM. 4. THE COMMISSIONER OF INCOME-TAX T RIVANDRUM. 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE.