TaxTMI 
TaxTMI 
TaxTMI 
2015 (12) TMI 1747
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....heard together and are being disposed of by this consolidated order for the sake of convenience. 3. The assessee in ITA No. 1108/PN/2011 has raised the following grounds of appeal:- l. The learned CIT(A) has failed to appreciate that the provision of Rs. 17,82,000.00 made by the appellant on Standard Assets is a provision for bad and doubtful debts which qualifies for deduction u/s 36 [1] [viia] of the I.T. Act 1961. In the circumstances the learned CIT(A) ought to have allowed the deduction of the said provision u/s 36[1] [viia] of the I.T. Act 1961. The said deduction may please be allowed to the appellant. 2. In the facts and circumstances of the case and in law, the learned CIT(A) ought to have allowed depreciation on Computers and Softwares purchased during the year amounting to Rs. 48,44,760.00. The finding given by the learned CIT(A) that the Computers and Softwares were put to use in A.Y.2008-09 being perverse and arbitrary and being devoid of merits the same may please be vacated and the depreciation be directed to be allowed in accordance with the provisions of law. 3. The learned CIT(A) has erred in holding that the Loss of Rs. 2,35,66,000.00 sustained by the appe....
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....rits to be admitted. He further pointed out that the issue is squarely covered against the assessee by the order of Tribunal in Shri Mahalaxmi Co-op. Bank Ltd. Vs. ITO in ITA No.1658/PN/2011, relating to assessment year 2008 -09, order dated 29.10.2013. In respect of additional ground of appeal No.2, the learned Authorized Representative for the assessee did not press the same, hence, the same is dismissed as not pressed. 6. Now, coming to the ground of appeal No.1 raised by the assessee in original grounds of appeal. The issue raised is against the disallowance of provision of Rs. 17,82,000/- made on account of Standard Assets, which is claimed to be classified deduction under section 36(1)(viia) of the Act. The learned Authorized Representative for the assessee fairly pointed out that both the Assessing Officer and the CIT(A) had allowed the claim of the assessee vis-à-vis provision for bad and doubtful debts. However, the provision made on account of Standard Assets as deductible under section 36(1)(viia) of the Act was not allowed by the CIT(A). The learned Authorized Representative for the assessee fairly admitted that the issue is covered against the assessee by the o....
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.... that the impugned claim is a contingent Provision made on the basis of a percentage on the value of standard assets. The Provision does not reflect any particular debt which is doubtful or bad and it is only a general and non-specific Provision and it has been rightly classified as a contingent provision by the income-tax authorities. In-fact, the learned counsel for the assessee, at the time of hearing, fairly conceded the contingent nature of the provision and therefore the lower authorities made no mistake in disallowing the same in view of the judgment of the Hon'ble Supreme Court in the case of Southern Technologies Ltd. (supra). Accordingly, the aforesaid Ground of Appeal raised by the assessee is dismissed." 10. The issue arising before us is identical to the issue before the Tribunal in The Cosmos Co-op. Bank Ltd. Vs. DCIT (supra) and following the same parity of reasoning, we uphold the order of CIT(A) and confirm the addition of Rs. 17,82,000/- 11. The issue vide ground of appeal No.2 is against the disallowance of depreciation on computer and software purchased during the year amounting to Rs. 48,44,760/-. 12. The Assessing Officer noted that for the year under consi....
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....year and in view thereof, the assessee was not entitled to the claim of depreciation on three bills dated 28.04.2007 for Rs. 1,40,000/-, dated 30.06.2007 for Rs. 28,70,000/- and dated 18.04.2007 for Rs. 1,94,920/-. 14. The assessee is in appeal against the aforesaid non-allowance of depreciation on computers, software and accessories purchased by the assessee. 15. The learned Authorized Representative for the assessee pointed out that the disallowance was made in the hands of assessee on account of two counts i.e. the said expenditure was capital in nature and further, whether it was put to use or not during the year. The learned Authorized Representative for the assessee referred to the details of expenditure placed at page 42 of the Paper Book and pointed out that admittedly certain expenditure was incurred during the succeeding year and certain expenditure was incurred on 30.03.2007. Our attention was drawn to the details placed at page 42 of the Paper Book and the assessee admitted that in respect of item Nos.1 to 4 and 11, the addition has to be confirmed as the assessee has no evidence when the same was put to use and in respect of balance items, the depreciation merits to ....
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....nd accordingly, direct the Assessing Officer to allow depreciation on balance asset Nos.5 to 10 totaling Rs. 12,79,240/-, The ground of appeal No.2 raised by the assessee is thus, partly allowed. 20. The issue in ground of appeal No.3 raised by the assessee is against nonallowance of loss of Rs. 235.66 lakhs on sale of securities. 21. Briefly, in the facts relating to the issue, the assessee for the year under consideration had debited sum of Rs. 2,35,66,000/- on account of loss on sale of securities. The explanation with regard to the said claim was that the Board of Directors of the bank had resolved to shift the securities from permanent nature to available for sale on 14.12.2006 and thereafter, the securities were sold and the assessee had incurred loss of Rs. 235.66 lakhs. The Assessing Officer observed that the assessee being a cooperative bank was governed by the Banking Regulation Act, 1949, for which the Reserve Bank of India had issued guidelines which were termed as prudential norms. Reference was made to the guidelines issued by the RBI, under which the Cooperative banks were required to classify their entire investment portfolio under three categories i.e. (1) Held T....
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....nk Ltd. Vs. DCIT & ACIT Vs. Latur Urban Co-op Bank Ltd. in ITA Nos.778/PN/2011 & 792/PN/2011, respectively, relating to assessment year 2007-08, order dated 31.08.2012 and Janata Sahakari Bank Ltd. Vs. ITO in ITA No.21/PN/2014 , relating to assessment year 2005-06 & Ors., consolidated order dated 25.02.2015. 25. The learned Departmental Representative for the Revenue placed reliance on the order of CIT(A). 26. We have heard the rival contentions and perused the record. The assessee was a cooperative bank and as per the guidelines of RBI, had made investment in various securities. The securities were held in different categories i.e. HTM, AFS and HFT. During th e year under consideration, the securities held under the category of HTM were converted by the assessee into AFS category by way of Board's Resolution dated 14.12.2006. Thereafter, the said securities were sold and loss of Rs. 235.66 lakhs was booked as business loss. The case of the authorities below was that the securities held in the category of HTM were in the nature of capital assets and the loss incurred on the sale of the same was capital loss. The contention of the assessee that it had converted the said category f....
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....on the other hand, pointed out that the CIT(A) has not adjudicated the said issue, hence, no merit in the present ground of appeal filed by the assessee. 30. The perusal of order of the CIT(A) reflects that at page 2, additions made by the Assessing Officer have been tabulated and thereafter, the grounds of appeal raised by the assessee have been reproduced under para 4. Further, at page 3, the CIT(A) has noted that out of six additions made by the Assessing Officer, the assessee had challenged only three additions i.e. addition of Rs. 17,82,000/-, addition of Rs. 48,44,760/- and addition of Rs. 2,35,66,000/-. We have already adjudicated the grounds of appeal raised by the assessee in respect of above said three additions in the paras hereinabove. The present ground of appeal raised by the assessee is not an additional ground of appeal raised before us. The assessee has raised an additional ground of appeal on a different issue. In view thereof, where the addition has been accepted by not filing any ground of appeal before the CIT(A), the assessee is barred from raising any ground of appeal by way of regular grounds of appeal against the order of CIT(A). In case, the assessee was ....
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....ssessee in ITA No.1109/PN/2011 has raised the following grounds of appeal:- 1. In the facts and circumstances of the case and in law, it may please be held that the Statutory Reserve amounting to Rs. 7,43,75,000.00 is an allowable deduction while computing the business income of the appellant. 2. In the facts and circumstances of the case and in law, it may please be held that Provision for Over due interest amounting to Rs. 19,10,80,000.00 is actually an over due interest on non performing assets which is not liable to be considered while calculating the business income of the appellant on the principle and theory of real income and hence the deduction for the same may please be allowed to the appellant. 3. The learned CIT(A) has failed to appreciate that the provision of Rs. 4,18,000.00 made by the appellant on Standard Assets is a provision for bad and doubtful debts which qualifies, for deduction u/s 36 [1][viia] of the I.T. Act 1961. In the circumstances the learned CIT(A) ought to have allowed the deduction of the said provision u/s 36[1][viia] of the I.T. Act 1961. The said deduction may please be allowed to the appellant. 4. The learned CIT(A) has erred in sustainin....
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....extent of Rs. 19,10,80,000/- was made in the hands of assessee. 39. The CIT(A) has upheld the order of Assessing Officer. 40. The assessee is in appeal against the order of CIT(A). 41. We find that similar issue as before us arose in ITO Vs. Kolhapur Mahila Sahakari Bank Ltd. in ITA No.01/PN/2013, relating to assessment year 2009-10, vide order dated 29.01.2014. The Tribunal in turn following the ratio laid down by the Pune Bench of Tribunal in ACIT Vs. Osmanabad Janta Sahakari Bank Ltd. in ITA No.795/PN/2011, order dated 31. 08.2012, held as under:- "2. The assessee is a Co-operative Bank engaged in the business of accepting deposits from members and giving loans to members. It has filed its return of income on 11.09.2009 for the year under consideration declaring total income at Rs. 14,57,840/-. In the scrutiny assessment, the Assessing Officer noticed that the assessee had not credited interest receivable or accrued on non-performing assets (hereinafter referred to as NPA) to its profit and loss account for financial year 2008- 09. The Assessing Officer after rejecting the various contentions of the assessee has held that the RBI guidelines are not intended to regulate the ....
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.... ITO Vs. Kolhapur Mahila Sahakari Bank Ltd. (supra) and following the same parity of reasoning, we hold that no addition is warranted on account of interest accrued on NPAs. Accordingly, we direct the Assessing Officer to delete the addition of Rs. 19,10,80,000/-. The ground of appeal No.2 raised by the assessee is thus, allowed. 44. The issue in ground of appeal No.3 is against the disallowance of provision made on account of Standard Assets under section 36(1)(viia) of the Act. 45. The issue raised vide ground of appeal No.3 is identical to the issue raised vide ground of appeal No.1 in assessment year 2007-08. Following the same parity of reasoning, we uphold the orders of authorities below and dismiss the ground of appeal No.3 raised by the assessee. 46. The issue in ground of appeal No.4 raised by the assessee is in respect of commission paid to Pigmy deposit agents amounting to Rs. 16,89,806/-, in ground of appeal No.5 is in respect of legal charges of Rs. 2,68,598/- and in ground of appeal No.6 is in respect of professional fees of Rs. 22,000/-. 47. The disallowance was made by the Assessing Officer, in view of the provisions of section 40(a)(ia) of the Act for non-deduc....
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.... be understood as retrospective in nature as it has been introduced to eliminate unintended consequences which may cause undue hardships to the tax payers. It was pointed out that in similar circumstances, the Pune Bench of the Tribunal in the case of ITO vs. M/s Gaurimal Mahajan & Sons vide ITA No.1852/PN/2012 dated 06.01.2014 following the decision of the Cochin Bench of the Tribunal in the case of Antony D. Mundackal vs. ACIT vide ITA No.38/Coch/2013 dated 29.11 .2013 has restored the matter back to the file of the Assessing Officer. In the precedent dated 06.01.2014 (supra), the Tribunal noted that such a plea was raised for the first time before the Tribunal and the correctness or otherwise of the contentions raised was not examined by the lower authorities. Therefore, the Tribunal restored the matter back to the file of the Assessing Officer for examination afresh, following the decision of the Cochin Bench of the Tribunal in the case of Antony D. Mundackal (supra) in a similar circum stance. The Ld. Representative submitted that the matter be restored back to the file of the Assessing Officer in the light of the order of the Tribunal dated 06,01.2014 (supra). The aforesaid p....
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....r the assessee pointed out that the issue was identical to the issue raised vide additional ground of appeal No.1 in assessment year 2007-08 and the same is to be decided against the assessee. Following the same parity of reasoning as in the paras hereinabove, we dismiss the additional ground of appeal No.1 after admitting the same to be a legal issue. 55. Further, vide additional ground of appeal No.2, the issue raised is consequential i.e. where the expenditure incurred on computers and software purchased in earlier years was capitalized in the hands of assessee, depreciation is to be allowed on the said capital assets. We find merit in the plea of the assessee, in view of the order passed in assessment year 2007-08, wherein, certain expenditure incurred by the assessee was capitalized. The Assessing Officer is directed to allow the depreciation on the items capitalized in assessment year 2007-08 on which directions have been given to allow the depreciation. The additional ground of appeal No.2 is thus, allowed. The grounds of appeal raised by the assessee are thus, partly allowed. 56. The assessee in ITA No.2330/PN/2012 has raised the following grounds of appeal:- 1. In the f....
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....ny lawful deduction on the ground of his inadvertent failure to make his claim before the lower authorities. 6. The appellant craves the permission to add, am end, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal. 57. The issue in grounds of appeal No.1 and 2 raised is against the claim of deduction under section 36(1)(viia) of the Act, which is identical to the additional ground of appeal No.1 raised by the assessee in assessment year 2007-08. 58. The learned Authorized Representative for the assessee has fairly admitted that the issue is covered against the assessee by way of decision of Pune Bench of Tribunal and following the same parity of reasoning as while deciding the additional ground of appeal No.1 in assessment year 2007-08, we dismiss the grounds of appeal No.1 and 2 raised by the assessee. 59. Now, coming to the alternate plea raised by way of ground of appeal No.3, which is the deduction on account of provision on Standard Assets debited to the Profit & Loss Account. The said issue is also identical to the issue raised vide ground of appeal No.1 in assessment year 2007-08 and followin....