Punjab National Bank Vs DCIT (ITAT Delhi)
ITAT Delhi Remands Loss-Setoff, Bad-Debt & MAT Issues; Dismisses Revenue’s 14A, TDS & LTCG-Loss Grounds Following Jurisdictional HC
These were cross-appeals by Punjab National Bank (PNB) and the Revenue against the NFAC order for AY 2020-21.
Assessee’s Appeal – Partly Allowed for Statistical Purposes
(a) Set-off of brought-forward business loss – ₹47.15 crore
ITAT found uncertainty regarding whether the business loss of AY 2018-19 was already allowed in subsequent years. The matter was restored to the AO to verify records:
If already allowed in later years → no adjustment.
If not allowed → benefit must be granted in this year.
(b) Additional Grounds – Bad debts u/s 36(1)(vii) & MAT applicability (115JB)
These issues were neither examined by AO nor CIT(A), though they arise from the bank’s operations. In the interest of natural justice, the ITAT remanded both issues to AO for full verification and fresh adjudication.
Revenue’s Appeal – Fully Dismissed
(a) 14A disallowance – ₹58.56 crore
Following Maxopp (SC), South Indian Bank (SC) and Delhi HC judgments in PNB’s own cases, shares held as stock-in-trade by a bank do not attract Rule 8D(iii). Ground dismissed.
(b) Rule 37BA(2) – TDS credit of ₹4.41 crore
CIT(A) held, with detailed factual findings, that PNB had rightfully offered the related income (interest/charges recovered under SARFAESI), even though not under the “capital gains” head. TDS credit cannot be denied merely because income is taxed under a different head.
ITAT upheld the finding. Ground dismissed.
(c) Long-term capital loss – ₹53.11 crore
CIT(A) found that the brought-forward LTCL of AYs 2016-17 & 2018-19 had never been disallowed in scrutiny orders and was already accepted in AY 2019-20. ITAT confirmed that Revenue showed no contrary evidence. Ground dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
