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2013 (12) TMI 1455 - AT - Income TaxDeduction u/s 80P denied - CIT(A) allowed the claim deeming the assessee bank as co-operative society - Held that - In the present case a clear finding is given by the Assessing Officer that by various judgments cited by learned A.R. of the assessee the assessee does not get any support for the income earned from the investments made in non-SLR category because such investments were not the subject matter of the decision of CIT vs. Nawanshahar Central Co-operative Bank Ltd. 2005 (8) TMI 28 - SUPREME COURT OF INDIA . The learned CIT(A) has not given any contrary finding that this contention of the Assessing Officer is not correct and the interest income is not in respect of non-SLR investment. Therefore we find that the order of learned CIT(A) is not sustainable. We therefore reverse the same and restore that of the Assessing Officer. Decided in favour of revenue. Penalty imposed u/s 271B - photocopy of tax audit report submitted by the assessee is not genuine document as such and it is not acceptable as per CIT - depreciation on Mutual Funds and securities - Held that - While going through the assessment order we do not find any such addition having been made by the Assessing Officer of the amount in respect of disallowance of depreciation on Mutual Fund securities. In the ground of appeal it was stated by the Revenue in ground No. 2 that in course of assessment proceedings the assessee never submitted that Mutual Fund were held for the purpose of trade and not for investment. It is also submitted in ground No. 2 that the assessee did not file any evidence in this regard even after several opportunities were given during the assessment proceedings. There is no mention of any remand report in this regard in the order of CIT(A). Under these facts we are of the considered opinion that the order of CIT(A) on this issue is not sustainable. his matter should go back to the file of the CIT(A) for a fresh decision and pass speaking order. - Decided in favour of revenue for statistical purposes. Revision u/s 263 - AO has not examined the issue of Carry forward of Loss and Unabsorbed Depreciation - Held that - After carefully going through order of learned CIT passed by him u/s 263 we do not find any infirmity therein and therefore the same is confirmed. - Decided against assesse. Deduction u/s 36(1)(viia) - deduction @10% of the aggregate average advances made by the Rural branches has to be computed in the manner laid down under Rule 6ABA of the l.T.Rules - Held that - Since the date of inclusion in the Sch-H of the RBI Act is an obvious fact I hereby hold that the assessee bank was not a scheduled bank during the F.Y. 2006-07 (corresponding to the A.Y. 2007-08) and therefore is not entitled to deduction @10% u/s 36(1)(viia) of the Act.- Decided against assesse.
Issues Involved:
1. Deduction under section 80P(2)(a)(i) for a co-operative bank. 2. Penalty imposed under section 271B. 3. Depreciation on Mutual Funds and securities. 4. Jurisdiction of CIT under section 263. 5. Deduction under section 36(1)(viia). Issue-wise Detailed Analysis: 1. Deduction under section 80P(2)(a)(i) for a co-operative bank: The Revenue challenged the allowance of Rs. 20,39,000/- deducted under section 80P(2)(a)(i), arguing that the CIT(A) erred by deeming the assessee bank as a co-operative society without discussing its status, which was disputed by the Assessing Officer. The CIT(A) had relied on the Supreme Court's decision in CIT vs. Nawanshahar Central Co-operative Bank Ltd., which allowed deductions for income from statutory investments. However, the Assessing Officer noted that the income in question was from non-SLR investments, which were not covered by the Supreme Court's decision. The Tribunal found the CIT(A)'s order unsustainable and reversed it, restoring the Assessing Officer's decision, thereby allowing the Revenue's appeal. 2. Penalty imposed under section 271B: The assessee contested the penalty for not submitting the original tax audit report, which the CIT(A) deemed non-genuine based on the auditor's letter stating no such report was issued. The Tribunal upheld the CIT(A)'s decision, finding no infirmity in the order and dismissing the assessee's appeal. 3. Depreciation on Mutual Funds and securities: The Revenue argued that the CIT(A) accepted evidence without giving the Assessing Officer an opportunity to respond. The CIT(A) had allowed depreciation on Mutual Funds, treating them as held for trade rather than investment. The Tribunal noted the absence of such an addition in the assessment order and the lack of evidence submission by the assessee during proceedings. The Tribunal found the CIT(A)'s order unsustainable but remanded the matter back to the CIT(A) for a fresh decision, allowing the Revenue's appeal for statistical purposes. 4. Jurisdiction of CIT under section 263: The assessee challenged the CIT's revision order under section 263, arguing that the conditions for invoking section 263 were not met and that the CIT exceeded his jurisdiction. The CIT had revised the assessment, questioning the non-examination of carry forward of loss and unabsorbed depreciation by the Assessing Officer. The Tribunal found no infirmity in the CIT's order and confirmed it, dismissing the assessee's appeal. 5. Deduction under section 36(1)(viia): The assessee contested the disallowance of deduction under section 36(1)(viia) for rural branch advances. The CIT(A) held that the assessee was not a scheduled bank during the relevant years and thus not entitled to the deduction. The Tribunal upheld the CIT(A)'s decision, noting the detailed examination and factual verification by the CIT(A), and dismissed the assessee's appeals for both assessment years. Combined Result: All appeals by the assessee were dismissed. The Revenue's appeal for assessment year 2007-2008 was allowed, and the appeal for assessment year 2008-2009 was allowed for statistical purposes.
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