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Income Tax Appellate Tribunal, DELHI BENCH: ‘E’: NEW DELHI
Before: SHRI G.D. AGRAWAL, HON’BLE & SHRI KULDIP SINGH
The appellant, The Karnal Central Co-operative Bank, Karnal, (hereinafter referred to as ‘the Assessee’) by filing the present appeal, sought to set aside the impugned order dated 22.12.2015 qua Assessment Year 2012-13 passed by Ld. CIT(A), Karnal, on the grounds that:-
“1. That the Ld. ACIT has erred in taxing the dividend exempted income of Rs. 453821.00. 2. That the Ld. ACIT has erred in disallowing the loan waived off Rs. 156909.00 3. That the appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposal off.”
2. Briefly stated the facts necessary for adjudication of the controversy at hand are: The Assessing Officer by invoking the provision contained u/s 14A read with Rule 8D of the Income-tax Rules, 1961 (for short ‘the Rules) made addition of Rs 4,53,821/- on account of disallowance of expenditure claimed in relation to earning of exempt income by declining the contentions raised by the assessee that, it is the policy of the Cooperative Bank that in case they intend to borrow money from Apex Banks, then they would have to purchase share of the lending bank equal to 2.50% of borrowing amount of the Government and as such said investment was business requirement of the assessee.
3. The AO also disallowed an amount of Rs. 1,56,909/- on account of loan waived off, on failure of the assessee to produce any evidence.
4. The assessee carried the matter before the Ld. CIT(A) by way of filing the appeal, who has confirmed the addition by dismissing 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 order passed by the revenue authorities below in the light of the facts and circumstances of the case.
By moving the separate Application for filing Additional Evidence under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 sought to bring on record additional evidence, so as to prove the fact qua Ground no. 1 that it was mandatory for the assessee to purchase shares of the lending bank qua to 2.50% and to produce on record relevant copy of the Punjab Civil Services Rules (Haryana), so as to prove ground no. 2 as to loan waived off during the year under assessment.
Since the assessment order has been passed by the Assessing Officer, on failure of the assessee to substantiate its claim and before Ld. CIT(A), this piece of evidence has also not been brought on record, we are of the considered view that in the larger interest of justice, application for additional evidence is required to be allowed, hence allowed.
Documents in the form of circulars, details of investment and Punjab Civil services Rules (Haryana), for waiving off loan of the employees belonging to C & D group died during service are available at page 11 to 40 and 53 of the Paper Book and detail of employees and their loans waived off is also made available in the application itself. So, we are of the considered view that the entire piece of additional evidence is required to be examined by the AO in the light of the books of accounts of the assessee. Hence, we hereby remand this case back to the AO to decide afresh after providing an opportunity of being heard to the assessee. Consequently, impugned order stands set aside and appeal filed by the assessee stands allowed for statistical purposes.
Order pronounced in the open court on 19/6/2018