BOMBAY MERCANTILE CO-OPERATIVE BANK LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX 1(1)(2), MUMBAI

This appeal has been filed by the assessee against the order dated 01.01.2018 passed by the Commissioner of Income Tax (Appeals)-2 (for short ‘the CIT(A), Mumbai, for the assessment year 2014-15, whereby the Ld. CIT(A) has partly allowed the appeal filed by the assessee against the assessment order passed u/s 143 (3) of the Income Tax Act, 1961 (for short the ‘Act’).

Brief facts of the case are that the assessee is a Co-operative Society, filed its return of income for the assessment year under consideration declaring the nil income. Since, the case was selected for scrutiny, the AO issued notices u/s 143 (2) and 142 (1) of the Act. In response to the said notices, the authorized representative of the assessee appeared before the AO and furnished the details called for and discussed the case. It was noticed that the assessee had claimed a deduction on account of amortization of book value of Assessment Year: 2014-15 investment amounting to Rs. 1,60,07,715/-. Accordingly, the AO asked the AR to explain as to why the said amount should be allowed as a deduction under the Act. The AO after hearing the plea of the assessee rejected the claim of the assessee and made addition of the said amount to the total income of the assessee. The assessee challenged the assessment order before the Ld. CIT (A) inter alia on the ground that the Ld. CIT (A) has wrongly confirmed the addition of Rs. 1,60,07,715/- claimed by the assessee on account of amortization of depreciation. The Ld. CIT (A) after hearing the assessee dismissed the said ground of appeal

At the outset, the Ld. counsel for the assessee submitted that the Mumbai Bench of the Tribunal has dealt with the identical issue in assessee’s own case for the A.Y. 2009-10 and the Tribunal after hearing the assessee restored the issue back to the file of AO with the direction to allow the assessee to take recourse to the provisions of section 158A. The Ld. counsel further submitted that the appeal of the assessee may be sent back to the AO to enable the assessee to complete all formalities as envisaged by Section 158A.

The Ld. Departmental Representative (DR) fairly admitted the facts stated by the Ld. counsel for the assessee. Assessment Year: 2014-15

We have heard the rival submissions and perused the material on record including the order passed by the co-ordinate Bench in the assessee’s own case for the A.Ys. 2009-10 and 2010-11. We notice that the assessee had pleaded before the Tribunal to allow the assessee to apply the provisions of section 158A and the co-ordinate Bench allowed the request of the assessee and sent the appeal back to the AO for allowing the assessee to take recourse to the provisions of section 158A. The relevant paras of the order of the coordinate Bench read as under:- “4. Heard and perused relevant material on record. Upon perusal, we concur with the submissions that identical matter is sub-judice before Hon’ble Bombay High Court. Hence, the provisions of Section 158A titled as ‘procedure when assessee claims identical question of law is pending before High Court or Supreme Court’ squarely apply to the facts of the case. The Ld. AR, vide letter dated 10/11/2017 has placed on record application in Form No. 8 read with Rule 16 of Income Tax Rules pursuant to Section 158A. Hence, without delving much deeper into the matter, we restore the matter to the file of Ld. AO for completion of all formalities as envisaged by Section 158A. Needless to say that the matter on merits shall be kept in abeyance till the outcome of the decision of Hon’ble Court in the cited appeals. Resultantly, the assessee’s appeals stands allowed for statistical purposes. 5. We find that the identical ground is sole ground in for AY 2009-10 & ITA No. 829/Mum/2016 for AY 2010-11. The Ld. AR has pleaded on similar lines to apply the provisions of section 158A to the same. Hence, the matter is restored back to Ld. AO with similar directions including completion of necessary formalities in this regard. Resultantly, these two appeals also stands allowed for statistical purposes.”

Since, the facts and the issue involved in the present appeal are identical to the facts and issue involved in the assessee’s own case for the A.Y. 2009-10 and 2010-11 and since the Tribunal has restored the identical issue to the file Assessment Year: 2014-15 of the AO with the direction to allow the assessee to take recourse to section 158A of the Act, we respectfully following the decision of the co-ordinate Bench, restore this appeal to the file of AO with the similar directions.