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2015 (9) TMI 382 - AT - Income TaxMaintainability of appeal - Disallowance of provision made for write off of loans - Addition on account of irrecoverable interest pertain to the provision for bad and doubtful debts - CIT(A) deleted the additions - Held that - As decided in assessee s own case for the A.Y. 2002-03 the assessee is a Cooperative Grameen Bank which filed its return of income for loss after claiming various deductions mentioned in the impugned order and the AO has disallowed the same but finally deleted by the ITAT. In view of the Instruction No.5 of the CBDT dated 10.7.2014, the present appeal is not maintainable. As per the records and the grounds raised by the assessee, the assessee was enjoying the benefit of S.80P of the Income Tax Act, 1961 and as such the tax on the income is exempt even if the addition is sustained there will be no tax due as the tax effect would be nil . Keeping in view the decision rendered by Hon ble Allahabad High Court in the case of Zila Sahkari Bank Ltd. (2013 (10) TMI 1341 - ALLAHABAD HIGH COURT), the appeals filed by the Revenue are not maintainable. - Decided in favour of assessee.
Issues:
1. Disallowance of provision made for write off of loans. 2. Disallowance of provision for bad and doubtful debts. 3. Disallowance of miscellaneous expenses without furnishing details. Issue 1: Disallowance of provision made for write off of loans: The Revenue challenged the deletion of an addition of Rs. 284.57 lacs made on account of disallowing the provision made for write off of loans. The Ld. CIT(A) had deleted this addition, arguing that the tax effect was minimal and the assessee was enjoying the benefit of S.80B of the Income Tax Act. The Tribunal found that the appeals by the Revenue were not maintainable as per CBDT Instruction No.5 of 2014 and cited the decision of the Hon'ble Allahabad High Court in a similar case. The Tribunal dismissed the appeal, upholding the decision of the Ld. CIT(A) based on the tax exemption status of the assessee. Issue 2: Disallowance of provision for bad and doubtful debts: Another issue involved the disallowance of Rs. 1,15,91,500/- made on account of irrecoverable interest pertaining to the provision for bad and doubtful debts. The Ld. CIT(A) had also deleted this addition, following the same reasoning as in the previous issue. The Tribunal reiterated that the tax effect was nil due to the tax exemption enjoyed by the assessee under S.80P of the Act. The appeal by the Revenue was dismissed based on the principles laid down in the Allahabad High Court judgment. Issue 3: Disallowance of miscellaneous expenses without furnishing details: The third issue revolved around the disallowance of Rs. 2,50,000/- made on account of disallowance of miscellaneous expenses without proper details. The Ld. CIT(A) had deleted this addition as well, and the Tribunal upheld this decision considering the tax exemption status of the assessee and the minimal tax effect. The appeals filed by the Revenue for the A.Y. 2003-04, 2004-05, and 2005-06 were dismissed based on the above analysis and the relevant legal provisions and judgments cited. This judgment highlights the importance of considering the tax effect and the applicability of relevant legal provisions while determining the maintainability of appeals. The Tribunal emphasized the tax exemption status of the assessee and the minimal impact on tax liability in dismissing the Revenue's appeals. The decision was based on a thorough analysis of the facts, legal provisions, and precedents, ensuring a fair and just outcome in the dispute between the parties.
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