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2014 (3) TMI 1167 - AT - Income TaxAdvances made to rural branches u/s 36(1)(viia) - definition of Rural branch for the purpose of arriving at deduction u/s. 36(1)(viia ) - CIT(A) dismissed the appeals filed by the assessee - HELD THAT - CIT(A) has followed the binding decision rendered by the Hon ble Jurisdictional High Court of Kerala in the case of Lord Krishna Bank Ltd 2010 (10) TMI 860 - KERALA HIGH COURT . Since both the tax authorities have followed the binding decision of the Hon ble Jurisdictional High Court in the case of Lord Krishna Bank Ltd. (supra) we do not find any reason to interfere with the decision rendered by Ld. CIT(A). Appeals filed by the assessee are dismissed.
Issues:
Interpretation of the term "rural branch" for deduction u/s. 36(1)(viia) of the Act. Analysis: The appeals were against orders by the Ld. CIT(A), Kozhikode for the assessment year 2007-08. The appeals were heard together as they involved the same issue of defining "rural branch" for deduction u/s. 36(1)(viia) of the Act. The assessee claimed deduction based on the population of the Ward being less than 10,000, but the assessing officer rejected the claim. The officer cited a High Court judgment stating that the population of the Grama Panchayat should be considered, not that of the Ward. The Ld. CIT(A) dismissed the appeals, following the High Court decision. The parties agreed that the decision was binding, leading to the dismissal of the appeals by the ITAT Cochin. In conclusion, the key issue in this judgment was the interpretation of the term "rural branch" for the purpose of claiming a deduction u/s. 36(1)(viia) of the Act. The dispute arose from the assessee's interpretation of "place" as the Ward within the revenue village, while the assessing officer and the Ld. CIT(A) relied on a High Court judgment that defined "place" as the Grama Panchayat. Since all branches of the assessee bank were located in places with a population exceeding 10,000, the deduction claim was rejected. The ITAT Cochin upheld the decision, emphasizing the binding nature of the High Court judgment and dismissing the appeals accordingly.
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