Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCHES (CAMP AT MEERUT
Before: SHRI N.S. SAINI & SHRI KULDIP SINGH
PER KULDIP SINGH, JUDICIAL MEMBER : The appellant, District Cooperative Bank Limited (hereinafter referred to as ‘the Assessee’) by filing the present appeal, sought to set aside the impugned order dated 09.02.2016 passed by Ld. CIT (Appeals), Moradabad qua the Assessment Year 2011-12 on the grounds inter alia that :-
“1. That on facts and in law addition of Rs.3,06,200/- made on account of dividend received from other Co-operative Societies is totally wrong, unjustified & illegal. Assessee has received dividend form other Co-operative Societies namely KRIBCO & Indian Farmers Fertilizers Co-operative Ltd. (IFFCO) and the same has been claimed to be exempt from tax on the basis of Principle of Mutuality. Therefore, the basis taken by Ld. CIT for confirming addition of Rs.3,06,200/- is totally wrong, unjustified and unwarranted.
2. That on facts and in law addition of Rs.76,000/- on account of expenses pertaining to previous year is totally wrong, unjustified & illegal. Assessee has paid sum of Rs.76,000/- for expenses crystallized during the year. Therefore, the basis taken by Ld. CIT for confirming addition of Rs.76,000/- is totally wrong, unjustified and unwarranted.
3. That on facts and in law addition of Rs.19,20,999/- on account of interest reversed. Therefore, the basis taken by Ld. CIT for confirming addition of Rs.19,20,999/- is totally wrong, unjustified and unwarranted.”
Briefly stated the facts necessary for adjudication of the controversy at hand are : The tax auditor in its report noticed previous year expenses amounting to Rs.76,000/-, which the Assessing Officer sought to add back to the income of the assessee.
Assessee while furnishing the break-up of the same brought on record that amount of Rs.28,500/-, Rs.3,900/- & Rs.43,600/- was incurred on generator rent of Morena Extension, Building rent of Swaheri and Building rent of Jhalu respectively. AO made disallowance of Rs.76,000/- on the ground that since the expenses pertained to previous years, the same are not allowable one. AO made further addition of Rs.19,20,999/- on account of interest reversed by the assessee on the ground that the same pertains to earlier year and as such, the income of the earlier years is derecognized in the subsequent years.
Assessee carried the matter by way of an appeal before the ld. CIT (A) who has dismissed the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal.
We have heard the ld. Authorized Representatives of the 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.
GROUND NO.1
Ground No.1 is dismissed having not been pressed during 5. the course of arguments.
GROUND NO.2
Out of the addition of Rs.76,000/-, the assessee claimed to have paid a sum of Rs.28,500/- as rent for the period January to March, 2010 for Morena branch, Rs.3,900/- for Swaheri branch for the month of March 2010 and Rs.43,600/- as enhanced rent for Jhalu branch for the last five years on settlement of dispute and difference of the enhanced rent was paid during the year under assessment.
Ld. AR for the assessee contended that the amount of Rs.43,600/- on account of enhanced rent @ 20% for last five years which was agreed to be paid during the year under assessment. It is the case of the assessee that rent agreement showing enhancement of rent was furnished but not taken into account by the AO. We are of the considered view that when the amount of Rs.76,000/- has been paid being rent for January to March 2010 for Morena branch, Rs.3,9000/- for Swaheri branch and Rs.43,600/- for enhanced rent for Jhalu branch on settlement of dues, the same are allowable expenditure as the AO has not dispute the incurrence of the expenses to run the business of the bank. So, when payment of rent is not disputed which was stated to be paid in the next month due to negligence, the same cannot be disallowed. So, the AO is directed to allow the same after verification of the rent agreement as to the enhancement of the amount for the last five years paid during the year under assessment after settlement.
GROUND NO.3 8. The addition of Rs.19,20,999/- has been made by the AO on account of interest reversed pertaining to previous year. It is the admitted case of the assessee that the amount of Rs.19,20,999/- has been shown in the account books on account of interest charged but subsequently it came to the notice that it was wrongly charged and consequently the same was reversed on 07.05.2010. When it is undisputed case of the assessee as per books of account that the interest of Rs.19,20,999/- has been extra charged on loan in Kiratpur branch on 31.03.2010, but the said mistake of fact has been rectified by the assessee by making reverse entries, AO as well as ld. CIT (A) have made addition on the ground that this claim tantamount to earlier years without going into the fact that it was due to bonafide mistake. When undisputedly, there is no income to the assessee on account of extra charge of the interest on loan in Kiratpur branch how the same amount can be assessed to income and as such, addition of Rs.19,20,999/- on account of interest reversed is not sustainable, hence ordered to be deleted.
So, ground no.3 is determined in favour of the assessee.
Resultant, the appeal filed by the assessee is partly allowed. Order pronounced in open court on this 16th day of January, 2019.