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Income Tax Appellate Tribunal, BENCH “D” MUMBAI
Before: SHRI D.T.GARASIA, JM & SHRI RAJESH KUMAR, AM
सुनवाई की तारीख /Date of Hearing : 24.4.2017 घोषणा की तारीख /Date of Pronouncement : 24.4.2017 आदेश / O R D E R PER RAJESH KUMAR, A. M: This is an appeal filed by the assessee challenging the order of ld.CIT(A)-10, Mumbai, dated 31.10.2013 for the assessment year 2005-06.
The main issue in this appeal raised by the assessee pertains to the confirming the penalty of Rs.33,23,724/- by the ld.CIT(A) as imposed by the AO under section 271(1)( c) of the Income Tax Act, 1961 on addition made Rs.79,47,690/- on account of provision for standard assets written back.
At the outset, the ld.AR of the assessee submitted before the Bench that the issue is covered in favour of the assessee as the issue of quantum addition of Rs.79,47,690/- in respect of provision for standard assets written back has remanded back to the AO by the Co-ordinate Bench of the Tribunal vide order dated 3.3.2017 passed in (AY- 2005-06), wherein the Tribunal has restored the matter back to the file of the AO to decide the issue afresh as per law and facts. The ld. AR prayed before the Bench that the quantum has been set aside to file of the AO, the penalty confirmed by the ld.CIT(A) have no legs to stand and therefore should be deleted.
The ld. DR very fairly agreed to the contentions of the ld.AR.
After hearing both the parties and on perusal of the record including the Tribunal’s order in assessee’s quantum appeal qua addition of Rs.79,47,690/- in respect of provision for standard assets written back has been restored back to the file of the AO for verification of facts and deciding the issue afresh. For the sake of convenience, we reproduce the operative part of the Tribunal order as under : “8. Ground No. 3 relates to disallowance of provision for standard asset written back of Rs. 79,47,690/- the ld AR of the assessee argued that the assessee have been following the consistent policy of offering to tax the provisions made for standard assets in all years and, consequently, excluded from income such provision for standard asset written back. It was further submitted that the details of provision for standard asset for assessment year 2002-03 to 2005-06 were provided to the lower authorities and copies of all those evidences are placed on record. The assessee was consistently offering to tax the provisions made for standard assets and claiming as deduction the provisions return back. The provisions of written back during the year represents amounts which were disallowed in earlier assessment year and therefore should be allowable in the year of written back. The ld AR in support of submission relied upon the decision of Delhi High Court in case of Steel and General Mills Co Ltd(96 ITR 438) and Madhya Pradesh High Court in case of Nathabhai Desabhai (130 ITR 238). On the other hand the learned DR for the revenue supported the order of authorities below.
We have considered the rival contention of the parties and further gone through the orders of authorities below. The assessing officer disallowed the provisions for standard asset written back holding that assessee has failed to furnish the information as to what extent such income had been offered in the earlier years for which write back has been claimed. The learned Commissioner (Appeals) confirmed the disallowance holding that AO has no alternative to add back in absence of any detail. We have seen that the assessee bank have been consistently offering to tax the provisions made for standard asset and claiming as deduction the provision written back (as shown on page 50 to 113 of PB). The ld AR for the assessee made the submission that provision written back during the year represents amounts which were disallowed in earlier years and therefore should be allowed in the year of written back. In our view the contention raised by the assessee require consideration by assessing officer, therefore, this ground of appeal is remanded to the assessing officer to appreciate and consider the above fact and pass the order afresh in accordance with law. In the result this ground of appeal is allowed for statistical purpose.”
6. In view of the decision of the Co-ordinate Bench of the Tribunal, we set aside the order of ld. CIT(A) and direct the AO to delete the penalty with a liberty to re-initiate the same if required depending upon the assessment in the set aside proceedings.
In the result, the appeal of the assessee is allowed.