Income Tax Appellate Tribunal - Mumbai
Acit Cir. 4, Thane, Thane vs Vasai Vikas Sahakari Bank Limited, ... on 28 December, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "G", MUMBAI
BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER
AND
SHRI AMARJIT SINGH, JUDICIAL MEMBER
ITA No. 5050/Mum/2016
Assessment Year : 2008-09
Asst. Commissioner of Income Vasai Vikas Sahakari Bank
Tax, Circle-4, Limited, Samaj Mandir,
THANE Vs. Opp: New English High School,
Parnaka,
VASAI (W)
[PAN : AAAAV 0519 Q]
(Appellant) (Respondent)
Appellant By : Shri Suhas Kulkarni, DR
Respondent By : Shri Bhupendra Shah, AR
Date of Hearing : 24-12-2018 Date of Pronouncement : 28-12-2018
ORDER
Per Rajesh Kumar, Accountant Member:
This appeal filed by the Revenue is directed against the order of the Commissioner of Income Tax(Appeals)-3, Thane, dated 25-05-2016. Revenue has raised the following grounds:
"1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A)-3, Thane erred in deleting the addition of Rs. 30,000/-:2: ITA No. 5050/Mum/2016
made on account of state education fund, Rs. 11,00,000/- on account of depreciation on Govt. securities, Rs. 6,00,000/- on account of statutory audit fees and Rs. 29,99,072/- on account of bonus payable.
2. The appellant prays that the order of the Ld. CIT(A)-3, Thane, maybe set aside and that of the Assessing Officer be restored."
Ground No. 3 is general in nature.
2. The issue in the 1st Ground of Appeal is against the various additions namely of Rs. 30,000/- on account of State Education Fund, Rs. 11,00,000/- on account of depreciation on Govt. Securities, Rs. 6,00,000/- on account of statutory audit fees and Rs. 29,99,072/- on account of bonus payable.
3. The facts in brief are that the present proceedings are set aside proceedings in consequence of revisionary order u/s. 263 of the Income Tax Act (Act) passed by the Pr.CIT. In the set aside proceedings, the AO added Rs. 1,14,30,000/- comprising - Student Education Fund of Rs. 30,000/-; Depreciation on Govt. Securities of Rs. 11,00,000/-; Bonus of Rs. 31,00,000/-; State Audit Fees of Rs. 6,00,000/- and Provisions for leave encashment of Rs. 66,00,000/- on the ground that assessee has not submitted any new materials/evidences before the AO and has merely stated that :3: ITA No. 5050/Mum/2016 all the submissions made before the CIT in the proceedings u/s. 263 of the Act may be treated as reply to AO for the queries in assessment proceedings.
4. Ld. CIT(A) partly deleted the additions made by the AO for which the revenue is in appeal whereas the assessee has not filed any appeal against the order of ld CIT(A). While partly allowing the appeal the ld CIT(A) observed g and held as under:
(i) I have carefully considered the submissions of the appellant, the observations of the AO in the assessment order, case laws relied upon by the appellant and the facts of the case, and therefore, I proceed to decide the appeal of the appellant.
(ii) The Provision of State Education Fund of Rs.30,000/- has been discussed at page 20 of the paper book, which is paid on 29.05.2008 and the same does not fall under section 43B of the Act. Therefore, the addition/disallowance made by the AO is deleted.
(iii) Depreciation of Govt. Security of Rs.11,00,000/- is an allowable deduction in view of the decision in the cases (paper book pages 22 to 38) of DCIT vs. Kallappanna Awade Ichalkaranji Janata in ITA No.449/PN/2012 A.Y. 2008-09 order dated 05.08.2013 & Suvarnyug Sahkari Bank Ltd. vs. ACIT in ITA N0.1668/PN/2012 A.Y.2008-09 order dated 29.10.2013. Therefore, the addition/disallowance made by the AO is deleted.
(iv) Audit fees of Rs.6,00,000/-paid to Auditors is not a statutory fees, therefore, the provision of section 43B do not attract in this case and the same is decided in favour of the appellant in view of the decision in the case of CIT vs. Shree Warna Sahakari Sakhar (2002) 173 CTR 188(Bom) order dated 23.07.2001, The appellant has claim the deduction on accrual basis and paid subsequently by deducting TDS, Therefore, the addition made by the AO is deleted.:4: ITA No. 5050/Mum/2016
v) Out of Rs.31,00,000/- bonus payable, the details of bonus paid of Rs,29,99,072/- upto filing of the return has been discussed at page 52 of the paper book and the balance amount of Rs.1,00,928/- has not been paid. Therefore, the addition of Rs.29,99,072/- is deleted and the balance amount of Rs. 1,00,928/- is confirmed.
vi) The appellant has claimed that, out of Leave Encashment of Rs.66,00,000/-, the amount of Rs.12,68,780/- has been paid as discussed at 64 of the paper book, However, on perusal of the details, the and submission of the AR of the appellant is not accepted because the payments were made after the return of income was filed on 30.09.2008, therefore, the addition of Rs. 66,00,000/- made by the AO u/s. 43B of the Act is sustained."
4.1. Finally Ld. CIT(A) partly allowed the appeal of assessee by sustaining the addition to the extent of Rs. 67,00,928/- and allowing the relief of Rs. 47,29,072/-.
5. Ld. DR relied heavily on the order of AO, whereas the Ld. AR supported the well reasoned and speaking order of CIT(A).
6. After hearing both the parties and perusing the material on record, including the impugned order passed by the CIT(A), we observe that in this case Ld. CIT(A) has given a clear-cut finding on each and every issue.
i. On the issue of Provision of State Education Fund of Rs. 30,000/-, CIT(A) observed that the same was paid on :5: ITA No. 5050/Mum/2016 29-05-2008 and does not fall under the provisions of Section 43B of the Act.
ii. Similarly, depreciation on Government Securities, it is the stock-in-trade in the case of bank, which is allowable deduction in view of the decision of DCIT Vs. Kallappanna Awade Ichalkaranji Janata in ITA No. 449/PN/2012, AY. 2008-09, order dt. 05-08-2013 & Suvarnyug Sahkari Bank Ltd., Vs. ACIT in ITA No. 1668/PN/2012, AY. 2008-09, order dt. 29-10-2013, therefore, the same is allowable. iii. On the issue of audit fees of Rs. 6,00,000/- paid to Auditors is not a statutory fees, therefore, the provisions of Section 43B do not attract in this case and the same is decided in favour of assessee in view of the decision in the case of CIT Vs. Shree Warna Sahakari Sakhar [173 CTR 188] (Bom).
iv. On the issue of bonus - out of Rs. 31,00,000/- bonus payable, the details of bonus paid of Rs. 29,99,072/- upto filing of the return has been discussed in the paper book and the balance amount of Rs. 1,00,928/- has not be paid, which was verified by the Ld. CIT(A). Therefore, the addition of Rs. :6: ITA No. 5050/Mum/2016 29,99,072/- is deleted and the balance amount of Rs. 1,00,928/- is confirmed.
6.1. Since the ld CIT(A) has passed a very reasoned an speaking order on various issues raised by the revenue, we do not find any reason to interfere with the findings given by the Ld. CIT(A). Grounds raised by Revenue are dismissed.
7. In the result, the appeal of Revenue is dismissed. Order pronounced in the open court on 28th day of December, 2018 Sd/- Sd/-
(AMARJIT SINGH) (RAJESH KUMAR) या यक सद य/JUDICIAL MEMBER लेखा सद य/ACCOUNTANT MEMBER मब
ुं ई/Mumbai; दनांक/Dated : 28th December, 2018 TNMM :7: ITA No. 5050/Mum/2016 आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ" / The Appellant
2. #यथ" / The Respondent
3. आयकर आयु%त(अपील) / The CIT(A), Mumbai
4. आयकर आयु%त / CIT, Mumbai
5. वभागीय त न+ध, आयकर अपील.य अ+धकरण, मुंबई / DR, ITAT, Mumbai
6. गाड1 फाईल / Guard file आदे शानस ु ार/ BY ORDER, स#या पत त //True Copy// उप/सहायक पंजीकार (Dy./Asst. Registrar) आयकर अपील.य अ+धकरण, मुंबई / ITAT, Mumbai