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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI KULDIP SINGH & SHRI OM PRAKASH KANT
1 ITA 3029/Mum/2022
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G”, MUMBAI
BEFORE SHRI KULDIP SINGH(JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER)
I.T.A. No. 3029/Mum/2022 (Assessment Year 2007-08)
Assistant Commissioner of Income- vs M/s State Bank of India (Earlier tax 2(2)(1), Room No.545, 5th Floor known as M/s State Bank of Travancore), 3rd Floor, FRT Aayakar Bhavan, Mumbai-400 020 Department, State Bank Bhavan Nariman Point, Mumbai-400 021 PAN : AAGCS9120G APPELLANT RESPONDENT
Assessee represented by Shri Ketan Ved Department represented by Shri Dr Kishore Dhule – CIT DR
Date of hearing 28/02/2023 Date of Pronouncement 28/02/2023
ORDER PER OM PRAKASH KANT (AM): This appeal by the Revenue is directed against order dated 22/09/2022 passed by the Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi (NFAC) [in short the Ld. CIT(A)] for assessment year 2007-08, raising following grounds:
2 ITA 3029/Mum/2022 “1.1 Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in allowing on the issue of addition on account of excess claim of depreciation on fixed assets of rs.48,20,041/-. The AO has finalized the assessment by following the directions of the CIT in order u/s 263 of the Act. 2. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in allowing on the issue of addition on account of excess claim of amortized investment of Rs/.2,81,88,855/-. The AO has finalized the assessment by following the directions of the CIT in order u/s 263 of the Act. 3. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in allowing on the issue of addition on account of excess claim of depreciation on all investments of Rs.9,68,60,000/-. The AO has finalized the assessment by following the directions of the CIT in order u/s 263 of the Act.” 2. Briefly stated, facts of the case are that in this case, the original assessment passed under section 143(3) of the Act was revised by the Ld.Commissioner of Income-tax (hereinafter, Ld. CIT) holding the assessment as erroneous insofar as it is prejudicial to the interest of the Revenue directing the assessee to revise the assessment order on following issues:-
i. For an amount of Rs. 83,03,436/- claimed as rebate u/s 88E, the assessee has not furnished the evidence for payment of Security Transaction Tax in Form 10DB / 10DC. Hence rebate u/s 88E allowed in the assessment is not in order. ii. An amount of Rs.138,38,88,855/- was allowed as deduction towards amortization of investments written off. However, the amount written off in the books of accounts is Rs.135,57,00,000/- only. Thus excess claim allowed is Rs.2,81,88,855/-. iii. As there was only a debit balance in the provision for bad and doubtful debts account as on 01/04/06 the opening balance in the provision account u/s 36(1)(viia) should have been taken as nil for
3 ITA 3029/Mum/2022 allowing the deduction for the assessment year 2007-08. During the current year the provision u/s 36(1)(viia) allowed is Rs.79,76,87,916/-. 3. Consequently, the Assessing Officer passed the assessment order without any discussion except the issue of deduction under section 36(1)(viia) of the Act. The relevant finding of the Assessing Officer is reproduced as under:-
“ The objection raised by the assessee against the proposal for adding the aforesaid items to assessed income was rejected by the CIT. However the CIT has directed to re-compute deduction u/s 36(1)(viia) in the light of Apex Court’s decision in Catholic Syrian Bank Ltd. The bank does conduct business throughout the country and therefore deduction u/s 36(1)(viia) is allowable. However, the computation of deduction provided by the bank cannot be accepted on the ground that the computation of rural advances by rural branches cannot be accepted. The assessee could not specify the rural branches and the rural advances made. The rural branches is not properly identified by the assessee and I am of the considered opinion that the branches are not located in rural but urban only in absence of substantial supporting evidence. Therefore, deduction u/s 36(1)(vii) is reworked as under Particulars To Bad debts O/B 1,13,34,50,899 Provision 79,76,87,916 By balance 36,17,84,107
The balance being excess, is allowed. Therefore, the excess of deduction allowed u/s 36(1)(vii) amounting to Rs.69,75,47,090/- is added to assessed income. The CIT has also directed to re-compute the deduction u/s 36(1)(vii) in light of Apex Court’s judgement in Catholic Syrian Bank. Since the bank could not provide details regarding the rural branches, deduction claimed @10% on rural advance is withdrawn and added back to total income. The income is recomputed as under:-
4 ITA 3029/Mum/2022 Assessed Income Rs.3,76,89,84,299 Add : (1) Excess deduction allowed u/s 36(1)(vii) 69,75,47,090 (2) Excess depreciation 48,20,041 (3) Excess claim of amortized investments 2,81,88,855 (4) Excess depreciation on investments 9,68,60,000 Rs. 82,74,15,986 Rs. 4,59,64,00,285 Less: 7.5% of Gross Total Income Rs. 34,47,30,021 Total Assessed Income Rs. 4,25,16,70,264 Rounded off to Rs.4,25,16,70,260/-“ 4. The order of the Ld.CIT has been upheld by the Tribunal in ITA No.129/Coch/2012 for A.Y. 2007-08.
Against the order of the Assessing Officer dated 31/03/2013 passed in consequence to order under section 263 of the Act, the assessee preferred appeal before the Ld.CIT(A). However, the Ld.CIT(A) partly allowed the appeal of the assessee.
Aggrieved with the finding of the Ld.CIT(A), the Revenue is in appeal before us.
Before us, the Ld.Departmental Representative submitted that the Ld.CIT(A) has passed unreasoned order without any finding on the issue in dispute. Therefore, his order may be set aside for deciding afresh.
On the contrary, the Ld.Counsel for the assessee submitted that before the Ld.CIT(A) assessee has made detailed submissions and after considering the
5 ITA 3029/Mum/2022 same, the Ld.CIT(A) has allowed the appeal of the assessee and, therefore, there is no requirement for restoring the appeal back to the file of Ld.CIT(A).
We have heard rival submissions of the parties on the issue in dispute and perused the relevant material on record. We find that on the issue of deduction under section 36(1)(vii) of the Act, the Ld.CIT(A) has restored the matter back to the file of the Assessing Officer for verification. However, on the issue of excess depreciation of Rs.48,20,041/-, on the issue of the excess claim of the amortised investment of Rs. 2,81,88,855/- and excess claim of depreciation on investment of Rs.9,68,60,000/-, the Ld.CIT(A), allowed the appeal observing as under:-
“As the AO has not given any basis for these addition, I am left with no choice but to accept the contention of the Appellant. Accordingly these addition are deleted and the Grounds of Appeal are “Allowed”. 10. In view of the above finding of the Ld.CIT(A), it is evident that no reasons have been cited by the Ld.CIT(A) for accepting the contention of the assessee. We find that the Assessing Officer also did not discuss the claim of the assessee.
In the background of the above facts, we feel appropriate to restore the matter back to the file of the Assessing Officer for providing adequate opportunity of being heard to the assessee and after verification of the claim of the assessee, decide the issue in accordance with law. The grounds raised by the Revenue are allowed for statistical purpose.
6 ITA 3029/Mum/2022 12. In the result, appeal of the Revenue is allowed for statistical purpose. Order pronounced in the open court on 28th day ofFeb. , 2023.
Sd/- sd/- (KULDIP SINGH) (OM PRAKASHRI. KANT) �ाियक सद�/JUDICIAL MEMBER लेखा सद�/ACCOUNTANT MEMBER मुंबई/Mumbai, िदनांक/Dated: 28/02/2023 Dragaon Legal / Pavanan, Sr.PS
�ितिलिप अ�ेिषतCopy of the Order forwarded to : अपीलाथ�/The Appellant , 1. �ितवादी/ The Respondent. 2. आयकर आयु�(अ)/ The CIT(A)- 3. आयकर आयु� CIT 4. िवभागीय �ितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, 5. Mumbai गाड� फाइल/Guard file. 6.
BY ORDER, //True Copy//
(Dy./Asstt. Registrar) ITAT, Mumbai