Income Tax Appellate Tribunal - Chandigarh
M/S The Punjab State Coop Bank Ltd., ... vs Acit, C-2(1), Chandigarh on 27 February, 2020
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, "बी " च डीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL
DIVISION BENCH, 'B', CHANDIGARH
ी एन. के. सैनी, उपा य एवं ी संजय गग , या यक सद य
BEFORE SHRI N.K. SAINI, VICE PRE SIDENT &
SHRI SANJAY GARG, JUDICIAL ME MBER
आयकरअपीलसं./ITA No. 814/Chd/2019
नधा रण वष / Assessment Year : 2013-14
The Punjab State Cooperative Vs. The Asstt. CIT,
Bank Ltd., बनाम Circle-2(1),
SCO 175-187,Sector 34-A Chandigarh
Chandigarh
थायीले खासं . / PAN NO: AAAAP0253B
अपीलाथ$/ Appellant &'यथ$ / Respondent
नधा (रतीक*ओरसे/Assessee by : Shri Atul Goyal, CA
राज वक*ओरसे/ Revenue by : Smt. Geetinder Mann, JCIT
सन
ु वाईक*तार.ख/Date of Hearing : 21.01.2020
उदघोषणाक*तार.ख/Date of Pronouncement : 27 02.2020
आदे श/ Order
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 22.3.2019 of the Commissioner of Income Tax-1, Chandigarh [hereinafter referred to as 'CIT(A)']
2. The assessee in this appeal has taken following grounds of appeal:-
1. The Ld. CIT(A) has erred in law in issuing enhancement notice under section 251(2) of the Income Tax Act, 1961.
ITA No. 814-Chd/2019 The Punjab State Cooperative Bank Ltd., Chandigarh 2
2. That the Ld. CIT(A) has erred in law and on facts in considering the amount of Rs. 12087000/- as income of the assessee under the provisions of section 43D of the Act.
3. That Ld. CIT(A) has erred on facts and in law in considering the amount of Rs. l2087000/-as income of the assessee when the assessee itself has declared the same as income in AY 2016-17 and 2017-18 at the time of accrual of income.
4. That CIT(A) is erred in law in interpreting the words "actually received" under section 43D of the Act.
5. That the Ld. CIT-(A) has erred on facts and in law in confirming the addition of Rs.743000/- on account of OTS amount received pending adjustment when the amount has not accrued to the assessee.
6. That the Ld CIT(A) has erred on facts and in law in confirming the addition of Rs.743000/- under section 41 of the Act.
7. That the Ld CIT(A) has erred on facts and in law in confirming the addition of Rs.743000/- when the assessee has unclaimed provision for NPA amounting to Rs.3828.94 Lacs.
8. The assessee craves permission to add, amend or delete any ground of appeal before the finalization of appellate proceedings.
3. Ground Nos. 1, 2, 3 & 4: The sole issue raised through ground Nos. 1 to 4 is regarding the year of taxability of interest income of Rs. 1,20,87,000/- received by the assessee on non-performing assets. The ITA No. 814-Chd/2019 The Punjab State Cooperative Bank Ltd., Chandigarh 3 assessee offered the said income in the return of income for taxation in assessment years 2016-17 & 2017-18, whereas, the Assessing Officer taxed the same in the assessment year 2014-15. However, the Ld. CIT(A) while deciding the issue in the cross appeals of the assessee as well as of the Revenue for assessment year 2014-15 held that the said income was to be assessed in the assessment year 2013-14 i.e. the year under consideration. He, accordingly enhanced the income of the assessee for the year under consideration.
4. Both the Ld. representatives of the parties have submitted that in an appeal against the order of the CIT(A) for assessment year 2014-15, the issue has been restored back by the Tribunal vide order dated 6.12.2019 passed in ITA No.1365/Chd/2018 alongwith C.O.No. 4/Chd/2019. The relevant part of the order of the Tribunal for the assessment year 2014-14 is reproduced as under:-
" 8. T he Ld. DR s tated that s ection r elated to the taxab ility of inter est an d befor e interp reting the s aid s ection, the L d. D R contend ed, what was r elevant wa s th e fact th at th e CI T( A) had accep te d the allocation of recover y m ade by the asses s ee ban k of Rs. 1. 73 crores between the inter es t an d pr incipal a s Rs. 91 la cs a nd Rs .7 9 lacs r es pectively witho ut ver ifying the bas is of the s am e. He plead ed that befo r e a pplying the pr ovis ions of s ection 43D of th e Act it was r equired to firs t ver ify what the comp onen t of in teres t was in the entir e r eco very m ade and the L d. CIT(A) by m er ely accepting t he bifur cation m ade by the as sess ee ha d allo wed r elief to t he as s es s ee without verifying th e qua ntum to w hich the pr ovis io ns of section 43D of the Act was app lica ble.
ITA No. 814-Chd/2019 The Punjab State Cooperative Bank Ltd., Chandigarh 4
9. T he Ld. Couns el for the as s es s ee, on the other han d, contend ed that even the ass ess ee was agg rieved with the findings o f th e CIT (A) o n this issue tr eating the inter es t com pon ent taxabl e in ass essm en t year 2013- 14 as a gain st tha t r etur ned by the as s ess ee fo r a ss ess ment yea rs 20 15-1 6 a n d 201 6-17 when th e am oun t had fina lly accr ued to the a ss ess ee when th e H ig h Cour t had d enied s tay to the guar antor fro m who m the amou nt had bee n r ecover ed. It wa s co ntended that even the accou nting s tan dar ds tr eated r eceipt of the am ount only wh en ther e w as certainty of the sa me and in ass essm en t yea r 2013- 14 there was no cer tain ty of r eceipt o f th e am ount s ince the g uar antor ha d fi le d cas e agains t the or der of the cour t m akin g r ecover y. At his junctu re the L d. Coun sel for the ass ess ee was as ked to addr ess the m anner an d bas is on which t he am ount r ecover ed h ad b een bifu rcated by it be tween th e inter est an d pr incipa l am ount. To this the L d. Coun sel for the asses s ee was un able to given a plaus ible explana tion, s ta ting that it wa s sys tem gen er ated. T he L d. Couns el for the ass essee agr eed that the m atter be r es tor ed back to the CIT (A) to ver ify an d deter mine th e qu antum of inter es t in the am oun t r ecover ed.
10. We h ave hear d th e contentio ns of b oth th e par ties. We h ave go ne thr ou gh the or ders o f the CIT (A) and the AO als o. T he L d. CIT (A) has held the interes t compon ent, in the total am oun t r ecover ed, as taxab le in th e year of r eceipt as per the pr ovis ions of s ection 43D of the Act and has taken th e figur e o f inter es t in the tota l am ount r ecover ed as tha t s hown by the a ss ess ee in its boo ks in the s ubs eq uent year s i. e. 2015-1 6 a nd 201 6-17 when it cr ed ited the a mou n t to its Pr ofit & L os s Account.T he L d. CIT (A) has no t ver ified th e inter es t com ponent in the same, wh ich the L d. Couns el for the as s ess ee adm itted wa s s ys tem gener ated a nd co ul d not given a pl aus ible bas is for the sam e. In vie w of th e s am e, since the fact r elating to th e pr es ent issue vis -à-vis the am ount of inter es t ear ned by the ass ess ee held lia ble for taxation as p er s ection 43D of the A ct , r em ains to be deter mined and ver ified, we cons ider it fit to r es tor e th e iss ue b ack to the CI T( A) to fir s t ITA No. 814-Chd/2019 The Punjab State Cooperative Bank Ltd., Chandigarh 5 deter mine the s ame and ther eafter a dju dicate the issue in accor dance with law. Needless to ad d that the as sess ee is fr ee to r ais e all contentions befor e the CIT (A), wh o i n tu rn is d ir ected to d ecide the issue after dealing with the sa me and pas s ing a s peaking or der in this regar d."
5. In view of this, since the very issue relating to taxability of the interest income of Rs. 1,20,87,000/- has already been restored by the Tribunal to the file of the CIT(A) and the issue with regard to the year of the taxability is also under the consideration of the said CIT(A), hence, ground Nos.1 to 4 are accordingly restored to the file of the CIT(A) to be decided in view of the directions, as reproduced above, by the ITAT vide order dated 6.12.2019 for the assessment year 2014-15.
6. Ground Nos. 5, 6 & 7 : The issue raised through ground Nos. 5, 6 & 7 is relating to the taxability of the amount of Rs. 7,43,000/- received by the assessee on account of one time settlement with regard to the non-performing assets. The Ld. Counsel in this respect has moved an application for additional evidences which reads as under:-
"Dated: 20-01-2020 The Presiding Officer, Income Tax Appellate Tribunal, Chandigarh - Bench -B Chandigarh.
Subject:- Permission to file Additional Evidence in IT A. No. 814/Chandigarh/2019 In case of Punjab State Co-operative Bank Ltd Chandigarh -A.Y. 2013-14.
Sir/Madam, ITA No. 814-Chd/2019 The Punjab State Cooperative Bank Ltd., Chandigarh 6 Kindly refer to the subject cited above. In this connection it is submitted that Punjab State Co-operative Bank Ltd. Chandigarh had filed the above referred appeal during May 2019 against the orders of Ld CIT(A) Chandigarh on 8 grounds of appeal. Out of that Ground No. 5 was as under::-
"That the Learned CIT(A) Chandigarh has erred in law in confirming the addition of Rs.743000/- on account of OTS amount received pending adjustment when the amount has not accrued to the assessee"
The Ld. CIT (A) Chandigarh had decided the issue vide orders dated 22-03-2019 holding that the assessee was asked to provide party-wise details of OTS but he failed to submit the same. Initially the assessee had stated that it had declared the amount of OTS received amounting to Rs.743000/- as income during the year under consideration. Later he changed the stand that it had not booked the amount as income . However it has failed to show the amount as income which has been recovered from the NPA's . The AO has rightly treated the same as income of the assessee.
In this regard it is submitted that according to OTS Scheme 2011, the customers who had taken Consumer Loans and there amount became NPA up to 31-03-2006 will be eligible for relief under this OTS Scheme. Accordingly the assessee had entered into One Time Settlement with 14 customers DURING THE YEAR.
The same was not available with the assessee at that point of time. However subsequently the information has been received from the auditors on the basis of whose comments the addition has been made by the Ld. A.O. The documents are crucial evidence to demonstrate that the amount of Rs. 7.43 lacs provided by the auditors and also to appreciate and understand the OTS policy. Our Prayer ITA No. 814-Chd/2019 The Punjab State Cooperative Bank Ltd., Chandigarh 7 In view of the foregoing discussions we are enclosing herewith copies of the following documents as additional evidence with the request that the same kindly be admitted under Rule 29. It is respectfully submitted that facts would play a pivotal role for proper consideration and adjudication of the appeal. Grave prejudice would be caused to the appellant if these documents are not permitted to be filed.
a) Details of accounts
b) Ledger accounts of the customers Hope to be accommodated and obliged.
Thanking you, Yours Sincerely, Sd/-
Counsel for Assessee ( ATUL GOYAL)"
7. Since the additional evidences sought to be produced by the assessee go to the root of the case and are very much necessary for just and proper decision on this issue, hence, the additional evidence sought to be produced by the assessee are directed to be admitted. The issue is restored to the file of the CIT(A) for decision afresh with the directions that the Ld. CIT(A) will admit the evidences furnished by the assessee regarding the taxability of the aforesaid amount of Rs. 7,43,000/-, consider the evidence and explanation given by the assessee and decide the issue in accordance with law by way of a speaking order.
8. Ground No.8: This ground is general in nature and does not require any specific adjudication.
In the result, the appeal of the assessee is treated as allowed for statistical purposes.
ITA No. 814-Chd/2019 The Punjab State Cooperative Bank Ltd., Chandigarh 8 Order pronounced in the Open Court on 27.02.2020.
Sd/- Sd/- (एन. के. सैनी / N.K. SAINI) (संजय गग / SANJAY GARG) उपा"य# /Vice President या$यकसद%य/ Judicial Member Dated : 27.02. 2020 "आर.के."
आदे शक*& त3ल4पअ5े4षत/ Copy of the order forwarded to :
1. अपीलाथ$/ The Appellant
2. &'यथ$/ The Respondent
3. आयकरआय6 ु त/ CIT
4. आयकरआयु6त (अपील)/ The CIT(A)
5. 4वभागीय& त न8ध, आयकरअपील.यआ8धकरण, च:डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदे शानस ु ार/ By order, सहायकपंजीकार/ Assistant Registrar