NAINITAL DISTRICT COOP BANK LTD,HALDWANI vs. ASSISTANT COMMISSIONER OF INCOME TAX, HALDWANI

At the outset, ld. Counsel pointed out that the assessee has raised two grounds of appeal i.e. the ld. CIT(A) erred in upholding the disallowance on an ad-hoc and estimated basis at 25% at Rs.52,31,060/- out of the total disallowance made by

We have heard the rival contentions and gone through the facts and circumstances of the case. As regards to the first issue, the Assessing officer made disallowance of expenditure claimed by assessee at Rs.2,09,24,241/- as the assessee could not file any bifurcation of nature of expenses and justification of expenses under the head “other expenses”. According to the AO, the unallowable expenses have been identified and added to the income of the assessee. The ld. CIT(A) also confirmed the action of the AO as the assessee has not discharged his burden fully as the detailed documentary evidence and branch- wise ledgers were not furnished by the Assessing Officer. Therefore, the ld. CIT(A) estimated the disallowance at 25% of the total expenses claimed by the assessee under the head

Now before us, ld. Counsel for the assessee pointed out that neither the Assessing Officer nor ld. CIT(A) has rejected the books of accounts u/s 143(3) of the Act and there is no basis provided for confirming the 25% of disallowance in respect of other expenses. It was claimed that the assessee furnished head-wise statement of other expenses, sample bills from major CBS/technology service providers and when it was pointed out to ld. Counsel that the assessee has not filed complete bills & vouchers for verification and other details, he agreed that for verification purposes, the matter can be remanded back to the file of the AO.

The second addition is regarding the disallowance of Rs.40,00,000/- on ad-hoc basis out of the total disallowance made by AO of Rs.1,27,56,490/-. The Assessing Officer relied upon information reflecting the gross value of services in the Sales Tax return and tallied with the Income Tax return and without considering the reconciliation, he disallowed the entire expenses pertaining to gross value of service at Rs.1,27,56,490/- and ld. CIT(A) simply on estimate basis,

After hearing both the sides and going through the facts of the case, we are inclined to restore both these issues to the file of the AO. The AO will verify bills & vouchers and ledgers etc. and thereafter will decide this issue. As regards the difference in Sales Tax figure and Income Tax return figures in regard to value of services, the AO will verify the reconciliation submitted by assessee for which purpose the assessee undertakes to submit before the AO as and when called to do so. In terms of these observations, this matter is restored back to the file of the AO for fresh re-conciliation in terms of the above.

In the result, appeal of the assessee is allowed for statistical purposes. Order Pronounced in the Open Court on 28/07/2026. Sd/- Sd/- (Sanjay Awasthi) (Mahavir Singh) Accountant Member Vice President Dated: 28/07/2026 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR