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TMI Blog2018 (5) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - I.T.A.No.431/Vizag/2016 And C.O. 1/Vizag/2017 - - - Dated:- 25-4-2018 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Shri K.C. Das, DR For The Respondent : Shri G.V.N. Hari, AR ORDER PER D.S. SUNDER SINGH, Accountant Member: This appeal filed by the revenue is directed against order of the Commissioner of Income Tax (Appeals)-2, Guntur vide ITA No.174/11- 12 dated 24.8.2016 for the assessment year 2009-10. 2. All the grounds of appeal in this case are related to the addition made by the A.O. under the head liabilities and provisions amounting to ₹ 2,46,55,263/-. During the assessment proceedings, the A.O. found that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isbursements ₹ 18,26,697 v. Long Term loans disbursements ₹ 28,76,896 ₹ 2,33,47,196 6. Before the CIT(A), the assessee explained details of suspense account item wise and the Ld. CIT(A) sent the details to the A.O. and the A.O. has submitted the remand report after discussing with the assessee and verifying the relevant details. 7. Suspense bills and drafts Rs. 6,35,640/-: The assessee stated before the A.O. in the remand proceedings that as and when the demand drafts are issued by bank, the value of the draft issued is credited to this account and when DDs are presented for collection and proceeds are paid the same are debited from this account. This account is stated to be continuous running account, even if the validity period of draft is expired, the drafts have to be revalidated and proceeds are to be paid. When the A.O. has asked for the evidence for outstanding as on 31.3.2009 and called for the details, the assessee stated that, since huge amounts are debited and credited to this account on day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gular items, no abnormalities were found and the amount was not charged to P L account, the Ld. CIT(A) following the order of the assessee s case in the immediately preceding assessment year(supra) deleted the addition. 9. Suspense account Societies ₹ 81,63,310/-: The assessee explained the nature of the amount outstanding in the suspense account in the remand proceedings before the A.O. as under: i. Amounts received from Government towards schemes like Debt Waivers, Interest Rebates, Subsidies, Incentives, etc are credited to this account. The said amounts are subsequently transferred to respective PACS after thorough verification and tally. Share Capital receipts are also routed through this account till such time shares are allotted to them. ii. Loan down payment amounts will be placed initially in this Head and will be transferred to respective account on sanction of loan. The assessee produced the copies of vouchers of two branches as example and stated that amounts outstanding are part of regular business activities of the bank and further stated that nature of account was intermediate account and the balances are either to be transferred to beneficiary ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 30.9.2009 for ₹ 18,26,697/- subsequently. The AR stated that on presentation of drawal statements (loan proposals) by PA CS, the Bank sanctions the Short Term loans and after sanction, the said loan amount is debited to PACS Loan account and credited to Suspense Short Term Loan Disbursement account. Whenever, the Borrowers / Farmers approach Bank through their PA CS, the Bank disburses the loan to Farmer Borrowers by debiting this account. This account is also stated to be an intermediate account maintained for the purpose of holding the loan amounts sanctioned to beneficiaries till the date of actual disbursement to them. The AR stated to the A.O. that this account is also a running account and submitted the copies of relevant ledger extracts of Kotabommali Branch, alongwith the vouchers in support of disbursement. The amounts outstanding are part of regular business activities of the bank. The nature of outstanding amounts under this account is not covered under Section 43B of the IT Act. Considering the voluminous transactions occurring in the above account across numerous branches of the bank, the AO requested the Ld.CIT(A) consider the issue on merits. 11.1 The Ld.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/2013 in ITA No.229/10-11/DCIT,Circle-4(1)/VSP/2012-13 and in the subsequent year no such addition was made. The ld CIT(A) further observed that none of these items were charged to the P L account and accordingly deleted the addition. 13. Long term Share Capital ₹ 40,32,778/-: The AO submitted the remand report to the Ld.CIT(A) stating that a sum of ₹ 40,32,778 is shown as outstanding as on 31-3-2009 and the same is found to be outstanding as on 30-9-2009. The assessee was asked to furnish the evidences for squaring up of the outstanding amount but the assessee explained that at the time of receipt of loan application for Long Term loans, the Bank collects applicable Share Capital amount by crediting this account. On completion of loan appraisal and sanction, this amount is transferred to Share Capital account in the name of the Borrower. In case the loan is not sanctioned it will be returned to the respective Applicant. This amount is stated to be representing Share Capital received, but not allotted to Individuals by the Branches for want of details. The AR stated that the balances have to be squared up at the time of allotment of shares to the Share holders. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. The District Central Co-operative Bank is a Government institution, there is no suppression of income and there is no inflation of expenditure. Since the accounts were written manually, it was a stupendous task to reconcile the same. Since the transactions are genuine and there is no scope for inflation of expenditure or suppression of income keeping in view of the voluminous transactions Ld. A.R. requested to uphold the order of the CIT(A) and dismissed the appeal of the revenue. 16. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. 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. If the assessee fails to furnish the details even at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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