JILA SAHKARIKENDRIYA BANK MARYADIT,REWA vs. INCOME TAX OFFICER , REWA

This is an appeal filed by the assessee against the order of the ld. CIT(A), NFAC, passed under section 250 of the Income Tax Act, 1961 on 30.12.2022. The grounds of appeal

Without prejudice to the above ground Rs. 1,21,22,912/- reflected in AS26 paid by deductor M/s M. P. State Civil Supply Corporation, Rewa, do not belongs to the present assessee. Necessary correction have already been made by deductor M/s M. P. State Civil Supply Corporation, Rewa, in AS 26. The addition so made and confirmed by CIT Appeal is without any basis and verification. The entire addition may please be deleted in toto.

That The applicant reserves his right to raise additional ground or grounds of appeal those may arise at the time of hearing of this appeal.”

The facts of the case are that the assessee filed a return of income for the A.Y. 2014-15 declaring total income of rupees Nil in the capacity of an AOP. During the course of assessment proceedings, it was found that the receipt shown in Form 26AS of the assessee was not credited in the profit and loss account amounting to a total of Rs.1,34,24,166/-. The ld. AO observed that the assessee had both failed to show the above receipt of Rs. 1,34,24,166/- and also failed to claim the TDS in respect of the same. At that time, the ld. AR of the assessee submitted that these amounts did not pertain to the bank, it pertained to the societies for whom paddy and wheat were procured by the M.P. Civil Supplies Corporation Limited and the payment was made to them but the assessee bank had not submitted any supporting documents 3 Jila Sahkari Kendriya Bank Maryadit in its claim. Therefore, the ld. AO treated the income of Rs.1,34,24,166/- as income from undisclosed sources and added the same back to the total income of the assessee. Before the ld. CIT(A), it was submitted that the entire addition was based on amount reflected in Form 26AS. It was submitted that primary agricultural credit societies from whom paddy and wheat were procured were members of the assessee cooperative bank and when purchases were effected from primary agricultural credit societies for procurement purposes of M.P. Civil Supplies Corporation Limited, the deductor corporation did not make the payments to the primary agriculture credit societies directly, but they made payments to the assessee cooperative bank instead. It is for this reason that the assessee had not returned such receipts as income and also not claimed the TDS relating to this income. It was further submitted that for the A.Y. 2012-13, where the similar issue had come up, significant relief had been given. The ld. CIT(A) held that the assessee had failed to bring any evidence on record to show that the primary agricultural credit societies had disclosed this income with regard to the receipts stated to be received by them from M.P. Civil Supplies Corporation Limited. He, therefore, upheld the decision of the ld. AO making the said addition. The ld. CIT(A) also upheld the additions to the extent of Rs.13,01,254/- on account of interest from Bank of Baroda, as reflected in Form 26AS, and income from Central Bank of India, as reflected in Form 26AS. Rejecting the pleas of the assessee that the same interest already stood accounted for in its books of accounts, he held that the assessee had failed to give a proper explanation during the course of the appellate proceedings and therefore he upheld the addition. Finally, the ld. CIT(A) upheld the addition of Rs.3,30,711/- in respect of liabilities shown in its balance-sheet and added back by the ld. AO, under section 43B of the Income Tax Act. The ld. CIT(A) disregarded the submission of the assessee that the liabilities pertained to earlier years and no fresh liability was created during the year and therefore, section 43B did not apply for this year.

Sh. Bharat Deoraj Sheogankar, Departmental Representative (hereinafter referred to as the ‘ld. DR’ appearing on behalf of the Revenue did not have any objection to the restoration of the matter to the file of the ld. AO but submitted that the direction should be given to the assessee to make prompt compliance before the ld. AO failing which an adverse view could be taken in the matter.

We have duly considered the facts and circumstances of the case. In view of the fact that the major additions have been made on account of discrepancy in Form 26AS and the returned income such Form 26AS is now stated to be revised on account of correction statements filed by the M.P. State Civil Supplies Corporation Limited, we deem it appropriate to restore the matter back to the file of the ld. AO for a fresh decision in accordance with law, after considering the evidence produced by the assessee before him. Furthermore, we also direct the assessee to produce the necessary evidences to show that it had accounted for the interest income that was reflected in Form 26AS, in its books of accounts and finally, we direct the assessee to 5 Jila Sahkari Kendriya Bank Maryadit produce evidence before the ld. AO that the liabilities in question did not pertain to the current assessment year but to an earlier year, thereby taking it out of the purview of section 43B for this assessment year. The ld. AO may consider these and pass fresh orders in accordance with law.