ACIT 2 (1), UJJAIN vs. M/S JILA SAHAKARI KENDRIYA CO OPERATIVE BNAK MARYADIT RAJGARH (BIORA), RAJGARH

Brief facts of the case as culled out from the records are that the assessee is a Co-operative Bank deriving income from banking business. Return of income was filed on 30.09.2012 declaring NIL income. Case selected for scrutiny through CASS followed by serving of notices u/s 143(2)and 142(1) along with the questionnaires. After considering the submissions of the assessee Ld. A.O made following additions assessing the income at Rs.12,16,94,998/-:-

Aggrieved assessee preferred appeal before Ld. CIT(A) and partly succeeded.

Now the revenue is in appeal before the Tribunal raising following grounds of appeal; Jila Sahakari Kendriya Co-Operative BankMaryadit “1. Whether on the facts and in the circumstances of the case, Ld. CIT(A) was justified in deleting the addition of Rs.4,08,766/- u/s 36(i)(viia) of the IT Act.

We have heard rival contentions and perused the records placed before us. The revenue has challenged the deletion of addition of Rs.4,08,766/- made u/s 36(i)(viia) of the Act. We observe that the alleged amount relates to interest received on income tax refund which was not offered to tax. While framing the assessment Ld. A.O made the addition for the alleged amount in para 3. Thereafter in Para 5 Ld. A.O again made the addition for the same amount thereby making double addition. This is clearly a case of the double addition and Ld. CIT(A) has rightly appreciated the fact and deleted the addition of Rs.4,08,766/-. No interference 3 Jila Sahakari Kendriya Co-Operative BankMaryadit is called for in the finding of Ld. CIT(A) and Ground No.1 of the revenue stands dismissed.

Apropos Ground No.2 relating to addition of Rs.4,34,22,000/- u/s 41(1) of the Act on account of cessation of liability.

Ld. Departmental Representative vehemently argued supporting the order of Ld. A.O. Per contra Ld. Counsel for the assessee submitted that the alleged liability is for sundry creditors of Rs.4,34,22,000/- which is subsequently paid/adjusted during the financial year 2012-13. Ld. A.O made the addition without examining the details even when most of the sundry creditors falling under the alleged addition of cessation of liability were current liabilities pertaining to Assessment Year 2011-12 and not old liabilities as alleged by the Ld. A.O. All the details in support of the contention that the liabilities have been adjusted in subsequent year have been rightly accepted by Ld. CIT(A) thereby deleting the addition of Rs.4,34,22,000/-.

We have heard rival contentions and perused the records placed before us. Through Ground No.2 revenue has challenged the deletion of addition of Rs.4,34,22,000/- by Ld. CIT(A) which was Jila Sahakari Kendriya Co-Operative BankMaryadit made by Ld. A.O on account of cessation of liability u/s 41(1) of the Act. Ld. CIT(A) deleted this addition giving following findings of fact;

From perusal of the above finding, we find that various sundry creditors included in the list of Rs.4,34,22,000/- stands adjusted/paid during the financial year 2012-13. It is also surprising to note that the Ld. A.O made the addition without examining the details about the period since the sundry creditors were outstanding since except the parties mentioned in No. 1 to 5 and No.13 all the remaining balances were for the year under appeal i.e. Financial Year 2011-12 which were regular accounts of sundry creditors which by no cannon could have been added u/s 41(1) of the Act as cessation of liability. The details filed by the assessee about the adjustment of sundry creditors in subsequent period has not been disputed before us. The alleged amount cannot be added u/s 41(1) of the Act for cessation of liability. No interference is therefore called for in the finding of Ld. CIT(A) and thus Ground No.2 of the revenue appeal stands dismissed.

In the result appeal of the revenue stands dismissed.