M/S. GULSHAN MERCANTILE URBAN COOPERATIVE BANK LTD.,MUZAFFARNAGAR vs. ACIT, MUZAFFARNAGAR

PER KULDIP SINGH, JUDICIAL MEMBER

Since common question of facts and law is involved in all

the aforesaid appeals, the same are taken up together for disposal

by way of composite order to avoid repetition of discussion.

Bank Ltd., New Mandi, Muzaffarnagar (hereinafter referred to as

‘assessee’) by filing the aforesaid appeals sought to set aside the

impugned orders dated 30.06.2017, 06.01.2017, 30.06.2017 &

30.03.2018 for A.Y. 2009-10, 2012-13, 2014-15 & 2015-16

respectively on the identical grounds, except difference in figures

of additions, inter alia that :-

ITA No. 2166/Del/2017, A.Y. 2012-13

“1. The Ld. CIT(A) has erred in confirming the order of the AO to the extent of confirming most of the additions made by the AO making the assessment at the income of Rs. 1,18,31,749/- as against the returned income of Rs. 1,05,53,330/-.

3 ITA No. 2166 & Ors.

controversy at hand are : assessee being a co-operative bank is into

the banking activities during the years under consideration.

Assessing Officer made an addition of Rs. 1,51,634/-,

Rs.2,17,246/-, Rs. 5,56,000/- & Rs. 4,11,300/- in A.Y. 2009-10,

2012-13, 2014-15 & 2015-16 respectively on account of provisions

made by the assessee for gratuity u/s 2(5), 36(1)(v), 40A(7) &

40A(9) of the I.T.Act, 1961.

Rs.32,00/- & 32,00/- in A.Y.2009-10, 2012-13, 2014-15 & 2015-16

4 ITA No. 2166 & Ors.

respectively received by the assessee bank as dividend from UP Co-

operative Federation being not allowable u/s 80-P(4) for A.Y. 2009-

10, 2012-13, 2014-15 & 2015-16.

of interest in respect of the alleged NPAs assets in A.Y. 2012-13

on the ground that no evidence has been brought on record by the

assessee bank to prove that the same has become NPA.

by the assessee in P/L Account on account of provision for FBT

being not allowable u/s 40ic of the Act for A.Y. 2009-10. Assessing

Officer also made addition of Rs. 1,50,000/- by invoking provisions

u/s 14A by way of disallowance for earning exempt dividend

income. Consequently, Assessing Officer framed assessment at

Rs.72,72,192/- u/s 143(3)/ 147 of the Act for A.Y. 2009-10 and

framed assessment at Rs. 1,18,31,749/-, 1,33,93,140/- and

1,39,42,440/- u/s 143(3) of the Act for A.Y. 2012-13, 2014-15 and

2015-16 respectively.

filing appeals who have partly allowed the same by passing

separate orders. Feeling aggrieved assessee has come up before the

Tribunal by way of filing the present appeals.

5 ITA No. 2166 & Ors.

parties to the appeal, gone through the documents relied upon and

orders passed by the revenue authorities below in the light of the

facts and circumstances of the case.

ITA No. 2166/Del/2017, A.Y. 2012-13

findings.

GROUND NO. 2, 4, 7 & 8 OF ITA No. 2166/Del/2017,

A.Y.2012-13

pressed by the Ld. AR for the assessee, hence, dismissed as

withdrawn.

GROUND NO. 4 OF ITA No. 5481/Del/2017 for A.Y. 2009-10, GROUND NO. 3 OF ITA No. 2166/Del/2017 for A.Y. 2012-13, GROUND NO. 3 OF ITA No. 5482/Del/2017 for A.Y. 2014-15 & GROUND NO. 2 OF ITA No. 3982/Del/2018 forA.Y. 2015-16

2,17,246/-, 5,56,000/- and 4,11,300/- for A.Ys. 2009-10, 2012-13,

2014-15 and 2015-16 respectively on account of contribution made

by the assessee bank to LIC on account of gratuity fund on the

ground that the same has not been approved by Pr. Commissioner

6 ITA No. 2166 & Ors.

of Income Tax, Muzaffarnagar.

2,17,246/- the appellant has paid Rs. 1,62,441/- to one of the

employee on his retirement being deductible u/s 37 of the Act.

the assessee company is allowable only when the payment is made

on behalf of approved fund. Ld. AR for the assessee challenging

the impugned order contended inter alia that assessee bank has

moved an application to the Pr. Commissioner of Income Tax on

02-01-2009 available at page 26 to 28 of PB who has granted

approval with effect from 01.05.2017; that approval was required

to be granted from the date of application to be applicable with

effect from A.Y. 2009-10 and relied upon the order passed by co- ordinate bench of Tribunal in case cited as The Ganga Mercantile

Urban Cooperative Bank Ltd., Meerut Vs. ACIT, Muzaffarnagar.

of Tribunal in case of the Ganga Mercantile Urban Ltd. (supra) by

directing the AO to decide the issue after decision of the Pr.

Commissioner of Income Tax on the application of the assessee.

7 ITA No. 2166 & Ors.

granting approval for the gratuity trust with the Life Insurance

Corporation of India has been filed well within time i.e.

02-01-2009, it is to be allowed from the date of application itself

and not prospectively as Ld. Pr. CIT has done in this case.

Tribunal, we remit this issue back to the AO to decide afresh after

getting decision from the Pr. Commissioner of Income Tax on the

application of the assessee. Application of the assessee is

reportedly pending with Pr. CIT who shall decide the same

expeditiously in accordance with law from the date of application

and thereafter AO shall decide the issue afresh accordingly.

Consequently, Ground no. 4 of A.Y. 2009-10, Ground no. 3 of

A.Y. 2012-13, Ground No. 3 of A.Y. 2014-15 & Ground no. 2 of

2015-16 is decided in favour of the assessee for statistical

purposes.

GROUND NO. 5 OF ITA No. 5481/Del./2017 for A.Y. 2009-10

& GROUND NO.5 OF ITA No. 2166/Del./2017forA.Y. 2012-13,

GROUND NO. 4 OF ITA No. 5482/Del/2017 for A.Y. 2014-15,

GROUND NO. 3 OF ITA No. 3982/Del/2018 for A.Y. 2015-16

8 ITA No. 2166 & Ors.

identical issue challenging the addition of Rs. 62,315/-, Rs. 32,00,

Rs. 32,00/- & 32,00/- A.Y. 2009-10, 2012-13, 2014-15 & 2015-16

respectively by way of disallowance on account of dividend

received by the assessee bank from UP Cooperative Federation u/s

80P(4) of the Act.

for the years under consideration from the investment made with

UP Cooperative Federation. It is also not in dispute that assessee

bank is a cooperative bank registered with Reserve Bank of India.

When we peruse the provisions contained u/s 80P(4), 80P(2)(d) of

the Act, this deduction is not available to the cooperative bank. So,

in view of the matter, we find no illegality or infirmity in the

findings returned by Ld. CIT(A), hence, Ground No. 5, Ground

no. 5, Ground No. 4 & Ground No. 3 A.Y 2009-10, 2012-13, 2014-

15 and 2015-16 respectively are decided against the assessee.

GROUND NO. 6 OF ITA No. 5481/Del/2017 for A.Y. 2009-10

confirmed by AO/ CIT on the ground that it is not allowable u/s

40ic of the Act. Perusal of the impugned order passed by Ld.

CIT(A) passed in A.Y. 2009-10 goes to prove that this issue

remained undecided by Ld. CIT(A), may be due to inadvertence.

9 ITA No. 2166 & Ors.

So, without entering into merit of allowability or disallowability,

we remit this issue back to Ld. CIT(A) to decide after providing

opportunity of being heard to the assessee. Consequently, Ground

no. 5 decided in favour of the assessee for statistical purposes.

GROUND NO. 6 OF ITA No. 2166/Del/2017, A.Y. 2012-13

account of interest qua alleged NPA assests out of unrecognized

interest income of Rs. 5,94,320/-. It is case of the assessee that the

claim of the assessee is on the ground that advances for these

accounts were NPA in nature. However, Ld. CIT(A) decided this

issue against the assessee by returning following findings :-

“ During appellate proceedings also the appellant has not brought any further submission to support the grounds of appeal that the loans have been categorized as NPA in accordance with the guidelines of the R.B.I. The reliance of the appellant upon different decisions of the Hon’ble Tribunals as mentioned in the submission does not help the case of the appellant as the appellant has failed to show that the loans have been categorized as NPA after following the guidelines of R.B.I. In the circumstances it is held that the AO was justified to make addition of Rs. 3,29,241/-. The same is hereby confirmed. Ground of appeal No. 14 is dismissed.

the assessee has failed to bring on record the evidence to prove the

fact that the loans have been categorized as NPA as per guidelines

10 ITA No. 2166 & Ors.

of the RBI qua the amounts claimed on account of interest income.

This fact has been candidly admitted by Ld. AR for the assessee.

So, we remit this issue back to the AO to decide afresh after

entertaining evidence to be brought on record by the assessee.

Accordingly this ground is also decided in favour of the assessee

for statistical purposes.

GROUND NO. 5 OF ITA NO. 5482 for A.Y. 2014-15

assessee has received Rs. 16,34,688/- as exempt dividend income

and thereby disallowed an amount of Rs. 1,50,000/- on the basis of

guess work being expenses incurred for earning exempt dividend

income.

in favour of the assessee by returning following findings :-

“11. The facts of the case as well as submission made by the appellant have been considered. The AO has made disallowance of Rs. 1,50,000/- on account of expenses incurred for earning of dividend income. The submission of the AR on this issue has been reproduced as above. Similar issue has been decided by the undersigned in the case of the appellant for AY 2012-13. Vide order in appeal No.42/15-16/MZR dated 06.01.2017. As the facts are identical in this year also, therefore following the reasoning given the order dated 06.01.2017, the AO is directed to adopt the same principle and recomputed the disallowance on this account. Ground of appeal no. 5 is partly allowed.”

11 ITA No. 2166 & Ors.

this issue in accordance with order passed by CIT(A) in

A.Y.2012-13, no ground is left with the assessee to be argued

before the Tribunal. So, AO is directed to decide this issue as

directed by Ld. CIT(A). This ground is decided accordingly.

filed by the assessee are partly allowed for statistical purposes. Order pronounced in open court on 30th September, 2021.

Sd/- Sd/- (O.P.KANT) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 30th September, 2021 *Binita*