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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
आदेश आदेश / ORDER आदेश आदेश
PER D. KARUNAKARA RAO, AM
This appeal is filed by the Revenue against the order of CIT(A)-4, Pune dated 29.03.2016 for theA.Y. 2009-10.
Grounds raised by the Revenue are extracted below :
“1.Whether on the facts and in the circumstances of the case and in law, order of Ld.CIT(A) is contrary to law and to the facts and circumstances of the case. 2. Whether on the facts and in the circumstances of the case, the CIT(A)-4, Pune was justified in deleting the addition of Rs.54,38,180/- on account of loss on sale of Government securities.
2 ITA No.1112/PUN/2016 The Satara Merchant Cooperative Bank Ltd.,
Whether the CIT(A)-4, Pune erred in not appreciating the fact that the assessee did not specify the nature of Government securities and the decision of Hon'ble Bombay High Court given in the case of HDFC Bank Ltd. Vs. ACIT (2014) 366 ITR 505 is applicable in respect of HTM securities. 4. Whether the CIT(A)-4,Pune erred in considering the disallowance of Rs.54,38,180/-made by the AO on account of loss on sale of Government securities as Amortization of Premium paid on purchase of Government securities, which is factually different issue. 5. For these and such other reasons as may be urged at the time of hearing, the order of the Commissioner of Income-tax (Appeals) may be vacated and that of the Assessing Officer be restored. 6. The appellant craves leave to add, amend, alter or delete any of the above grounds of appeal during the course of the appellate proceedings before the Hon'ble ITAT.”
Briefly stated relevant facts includes that the assessee is an AOP
and filed the return of income on 29-09-2009 declaring total loss at
Rs.1,14,47,492/-. In the assessment, AO noticed that assessee debited an
amount of Rs.54,38,180/- to the profit and loss account as “Loss on Sale
of Govt. Securities. Assessee explained that the bank was facing financial
crisis due to heavy withdrawal of deposits, non-renewal of deposits.
Apprehension of the public due to vide publicity that people will lose their
deposits and due to various other factors, it chose to sell the Govt.
Securities. Not satisfied with the explanation by the assessee, the AO
denied the said claim of the assessee. He held that assessee had not
shown any evidence as to whether the securities sold by the assessee
were in the category of ‘Available for sale’ of “Held to Maturity’ or ‘Held for
trading’. Eventually, the AO made addition of Rs.54,38,180/- on account
of loss on sale of Government Securities. AO also made other addition of
Rs.9,163/- on account of Loss on sale of fixed asset which the CIT(A)
confirmed the same.
3 ITA No.1112/PUN/2016 The Satara Merchant Cooperative Bank Ltd.,
Aggrieved with the assessment order dated 25.10.2011, the
assessee filed an appeal before CIT(A). The CIT(A) granted relief to the
assessee and deleted the addition made by the AO. Now, the Revenue is in
appeal against the order of CIT(A).
At the outset, Ld. Counsel for the assessee submitted that appeal
filed by the Department is liable to be dismissed on account of low tax
effect. The ld. AR pointed that as per CBDT Circular No. 3/2018 dated
11th July, 2018, the monetary limit for filing of appeal by the Department
before the Tribunal is Rs.20 Lakhs, therefore, the appeals filed by the
Department are not maintainable.
On the other hand, the Ld. DR for the Revenue defended the 6.
assessment order and prayed for reversing the findings of the CIT(A).
However, the Ld. DR fairly admitted that tax effect in the present appeal is
less than Rs.20 Lakhs.
Both sides heard. A perusal of the impugned orders shows that
addition of Rs.54,38,180/- made in the year under consideration is on
account of loss on sale of Government Securities which was eventually
deleted by the CIT(A). However, as pointed out by the Ld. Counsel before
us, undisputedly, the tax effect in the present appeal is less than Rs.20
Lakhs in view of the CBDT circular No.3/2018 dated 11th July, 2018
where the monetary limit of tax effect for filing of appeal by the
Department before the Tribunal was raised to Rs.20 Lakhs. The circular
applies to the pending appeals of the Department before the Tribunal too.
Thus, in view of the CBDT circular, we are of the opinion that the present
4 ITA No.1112/PUN/2016 The Satara Merchant Cooperative Bank Ltd.,
appeal of the Revenue is liable to be dismissed on account of low tax effect.
In the result, the appeal of the Revenue is dismissed.
Order pronounced on 19th day of July, 2018.
Sd/- Sd/- िवकास अव�थी /VIKAS AWASTHY) (डी डी डी. क�णाकरा राव डी (िवकास अव�थी िवकास अव�थी िवकास अव�थी क�णाकरा राव क�णाकरा राव/D. KARUNAKARA RAO) क�णाकरा राव �याियक सद�य �याियक सद�य/JUDICIAL MEMBER लेखा सद�य लेखा सद�य/ACCOUNTANT MEMBER �याियक सद�य �याियक सद�य लेखा सद�य लेखा सद�य
पुणे / Pune; �दनांक / Dated : 19th July, 2018. Satish
आदेश क� �ितिलिप अ�ेिषत आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : आदेश क� �ितिलिप अ�ेिषत आदेश क� �ितिलिप अ�ेिषत अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-4, Pune. 4. The Pr. CIT-3, Pune. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “बी बी बी” ब�च, बी 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
आदेशानुसार / BY ORDER, // True Copy //
Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.