2018 (5) TMI 48 - AT - Income Tax

Addition of amount credited in the suspense account - unexplained / bogus transaction - assessee is a cooperative bank and the transactions appearing in the suspense account neither debited to the profit & loss account nor claimed as expenditure - Held that - As at the end of the year, there was an amount outstanding to the extent of ₹ 2,33,47,196/- which remained un-reconciled by the assessee. At the time of remand report also, the assessee could not reconcile the difference. The explanation offered by the assessee is general in nature for all the heads of suspense account but not furnished the specific details. The outstanding in the suspense account required to be reconciled as at the end of the year and furnish the necessary details before the A.O. Therefore, we are of the considered view that the assessee is bound to submit transaction wise details with nature of transactions name of the creditor, date of transaction, amount paid or adjusted, etc before the A.O. Therefore, we are of the opinion that the issue should be remitted back to the file of the A.O. to examine the suspense account in detail and decide the issue afresh on merits. The assessee is required to submit the complete details with regard to the transactions under each head of suspense account with name, date of entry, date of adjustment, etc. Accordingly, we set aside the orders of the lower authorities and remit the matter back to the file of the A.O.- Decided in favour of revenue for statistical purposes.

Issues Involved:
1. Addition made under the head liabilities and provisions amounting to ?2,46,55,263/-.
2. Specific items under suspense accounts and their treatment.
3. Remand report and the CIT(A)'s decision based on it.
4. Revenue's appeal against the CIT(A)'s order.

Detailed Analysis:

1. Addition under Liabilities and Provisions:
The primary issue revolves around the addition of ?2,46,55,263/- made by the Assessing Officer (A.O.) under the head liabilities and provisions. The A.O. identified a total liability of ?25,51,80,988/- as of 31.3.2009, with ?3,48,07,610/- under suspense accounts. The A.O. deemed ?2,46,55,263/- as unproved liability and added it to the total income after excluding ?1,01,52,347/- related to the previous assessment year.

2. Specific Items under Suspense Accounts:
The A.O. questioned various items under suspense accounts, including suspense bills and drafts, suspense individuals, suspense societies, suspense short-term loan disbursements, long-term loan disbursements, and long-term share capital. The assessee provided explanations for each item:

- Suspense Bills and Drafts (?6,35,640/-): The assessee explained this as a continuous running account for demand drafts issued and collected. The CIT(A) deleted the addition based on prior year’s similar deletion.

- Suspense Individuals (?58,11,875/-): This included borrower’s margin money, repayments, employee benefits, and government grants. The CIT(A) deleted the addition, noting the account's regular nature and lack of abnormalities.

- Suspense Societies (?81,63,310/-): Amounts received from government schemes and loan down payments were credited here. The CIT(A) deleted the addition, following the previous year's order.

- Suspense Short-Term Loan Disbursements (?18,26,697/-): This account held loan amounts sanctioned but not yet disbursed. The CIT(A) deleted the addition, citing the regular business nature of transactions.

- Long-Term Loan Disbursements (?28,76,896/-): Similar to short-term loans, this account held sanctioned long-term loans pending disbursement. The CIT(A) deleted the addition based on the regularity of transactions.

- Long-Term Share Capital (?40,32,778/-): This represented share capital collected but not yet allotted. The CIT(A) deleted the addition, noting the account's continuous nature.

3. Remand Report and CIT(A)'s Decision:
The CIT(A) forwarded the assessee’s additional evidence to the A.O., who accepted ?7,74,440/- for deletion. The CIT(A) deleted the remaining additions based on the A.O.'s remand report and the assessee’s explanations, noting that none of these items were charged to the profit and loss account.

4. Revenue's Appeal:
The revenue contested the CIT(A)'s deletion of ?2,33,47,196/-, arguing that the assessee failed to provide specific details for each transaction. The tribunal noted that the assessee's explanations were general and lacked reconciliation. The tribunal concluded that the assessee must furnish detailed transaction-wise information and remitted the matter back to the A.O. for a fresh examination.

Conclusion:
The tribunal allowed the revenue's appeal for statistical purposes, remitting the issue back to the A.O. for a detailed examination. The assessee's cross-objection supporting the CIT(A)'s order was also remitted back to the A.O. for reconsideration.

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