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TMI Blog2013 (1) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 -do- -do- -do- 4. 85(Asr)/2012 -do- 16.12.2011 -do- 5. CO.5(Asr)/12 -do- -do- -do- 6. 86(Asr)/12 -do- 27.11.2011 2004-05 7. CO.06(Asr)/12 -do- -do- - do- 8. 418(Asr)/2012 -do- 06.08.2012 -do- 9. CO.33/Asr/12 -do- -do- -do- 2. In ITA No.43(Asr)/2012, the Revenue has raised following grounds of appeal: 1. On the facts and circumstances whether the ld. CIT(A) was right in treating the eight rural branches as eligible for deduction u/s 36(1)(viia), keeping in view the reports of Census of India, 1981, Series 8 of J K. 2. On the facts and circumstances whether the ld. CIT(A) was right in allowing 100% depreciation on wooden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20/- by applying the yard stick of making pro rata disallowance based on the cost inflation index. 5. On the facts and circumstances whether the ld. CIT(A) has failed to appreciate that the assessee has utilized funds available with bank for earning tax free income and therefore, the AO has rightly worked out the disallowance of ₹ 22.34 crores ₹ 6.73 crores on account of proportionate interest expenses attributable to earning if tax free income. 6. On the facts and circumstances whether the ld. CIT(A) has totally ignored the fact that sub section (2) (3) of section 14A are retrospective in nature and so is the resultant Rule 8D. Hence, the disallowance u/14A was required to be computed with reference to the mandate of these provisions. 5. In ITA No.85(Asr)/2012, the Revenue has raised following grounds of appeal: 1. On the facts and circumstances whether the ld. CIT(A) was right in holding that the assessee company which is a schedule bank and is not established for the purposes of mobilizing resources for financial infrastructure facilities, is an infrastructural capital company in terms of the provisions of section 10(23G) of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) was right in holding that the assessee company which is a schedule bank and is not established for the purposes of mobilizing resources for financial infrastructure facilities, is an infrastructural capital company in terms of the provisions of section 10(23G) of the Income Tax Act, 1961. 2. On the facts and circumstances whether the ld. CIT(A) was right in directing the AO to restrict the disallowance u/s 14A to the extent of ₹ 16,68,487/- by applying the yard stick of making pro rata disallowance based on the cost inflation index. 3. On the facts and circumstances whether the ld. CIT(A) has failed to appreciate that the assessee has utilized the funds available with bank for earning tax free income and therefore, the A.O. has rightly worked out the disallowance of ₹ 6.58 crores ₹ 2.50 crores on account of proportionate interest management expenses attributable to earning of tax free income. 4. On the facts and circumstances whether the ld. CIT(A) has totally ignored the fact that sub section (2) (3) of section 14A are retrospective in nature and so is the resultant Rule 8D. Hence, the disallowance u/14A was required to be computed wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the disallowance u/14A was required to be computed with reference to the mandate of these provisions. 7. On the facts and circumstances whether the ld. CIT(A) was right in allowing prior period expenses when evidences in respect of most of the items is supportd by only e-mail correspondences and the assessee has failed to produce any supporting bills/vouchers either before the ld. CIT(A) or before A.O. to evidentiate as to how these expenses had crystallized during the year. 10. In CO No.33(Asr)/2012, the assessee has raised following grounds: 1. The worthy CIT(A) is unjustified in holding that a sum of ₹ 16,68,487/- should be disallowed u/s 14A of the Income Tax Act, 1961 in earning the tax free income despite the fact that CIT(A) was satisfied that even this much amount had not been incurred in relation to earning income not forming part of total income. 11. Since the issues in all the appeals are identical, therefore, all the appeals of the Revenue and C.O. of the assessee in all the years mentioned hereinabove, are being decided by this consolidated order. 12. First of all we take up appeal of the Revenue in ITA No.43(Asr)/2012 and C.O. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. counsel for the assessee relied upon the order of the ld. CIT(A). 13.3 We have heard the rival contentions and perused the facts of the case at PB 10 to 23 specifically at page 17 in para 6.2 of CIT(A) s order for the assessment year 2002-03 which has been followed by the ld. CIT(A) in the impugned year, has been perused by us. In para 6.2 of CIT(A) s order for the assessment year 2002-03, the AO was directed to verify whether the wooden partition made by the assessee was on its own land or on lease/rented accommodation. The AO after verification has confirmed that the wooden partition were on leased/rented accommodation. Keeping in view these facts and the legal position emerging from the decision relied upon by the ld. CIT(A) in para 6.2. of his order in that year held that the assessee is entitled to 100% deduction in respect of expenditure incurred. A perusal of the said order of the ld. CIT(A) for the assessment year 2002-03 and in the facts and circumstances of the present case, we find no infirmity in the order of the ld. CIT(A), who has rightly deleted the addition made by the A.O. Thus, ground No.2 of the Revenue s appeal is dismissed. 14. As regards ground No.3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.O. of the assessee is allowed. 15.3 Thus, appeal of the Revenue in ITA No.43(Asr)/2012 is dismissed and CO bearing No.4(Asr)/2012 of the assessee is allowed. 16. Now, we take up appeal of the Revenue in ITA No.53(Asr)/2012. The Ld. DR, Mr. R.L. Chhanalia, at the outset, conceded that the said appeal bearing No.53(Asr)/2012 for the A.Y. 2003-04 has been filed wrongly before the ITAT, Amritsar Bench. 17. We have heard the rival contentions and perused the material on record and find that the Revenue under some mis-conception has filed the duplicate appeal, which has been titled as ITA No.53(Asr)/2012, which is identical to Revenue s appeal bearing ITA No.43(Asr)/2012 for the same asstt. Year 2003-04, having identical grounds, arising from the same order of the ld. CIT(A), dated 30.11.2011. Since we have already decided the appeal of the assessee arising out of the order of the ld. CIT(A) dated 30.11.2011 on identical grounds, the present appeal has become infructuous and the same is dismissed. In the result, the appeal of the Revenue in ITA No.53(Asr)/2012 is dismissed. 18. Now, we take up the appeal of the Revenue in ITA No.85(Asr)/2012 and C.O. No.05(Asr)/2010 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses stated. He has merely termed it as charity and went on to disallow the same.. The ld. CIT(A) observed that the purpose of business does not mean that it should always end in generation of direct and visible profits. 22. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) in para 12 at page 20 21 of his order that the AO has not denied that these expenses are not incurred for the purposes stated. The reasoning given by the ld. CIT(A) with respect o the social responsibility and creating goodwill to promote the business in view of the decision of various courts of law mentioned in his order go to prove the expenditure incurred is for the purpose of business of the assessee and allowable under section 37(1) of the Act. Accordingly, we do not find any infirmity in the order of the ld. CIT(A), who has rightly deleted the addition so made. Thus, ground No.6 of the Revenue is dismissed. 23. In the result, all the grounds of the revenue in ITA No.85(Asr)/2012 are dismissed and sole ground of the assessee in C.O. 05(Asr)/2012 is allowed. 24. Now, we take up appeal of the assessee in ITA No.86(Asr)/2012 and C.O. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O made disallowance of ₹ 10,73,99,558/- under section 36(1)(viia) of the Act in respect of eight rural branches of the bank by not treating them as rural branches. 27.1 The Ld. CIT(A) allowed the claim of the assessee following the decision of the ITAT, Amritsar Bench in the case of the assessee vide para 4 of his order. 27.2 We have heard the rival contentions and perused the facts of the case. On identical facts, we have decided the issue in favour of the assessee by dismissing the appeal of the Revenue in ITA No.43(Asr)/2012 for the assessment year 2003-04 mentioned hereinabove and following the same ground No.1 of the Revenue being on identical facts is dismissed. 28. As regards ground No.2 of the Revenue, the A.O. allowed depreciation of 10% instead of 100% on wooden partition, as claimed by the assessee which was allowed by the ld. CIT(A) following his predecessor order referred to in para 5.10 of his order at page 8. 28.1 We have heard the rival contentions and perused the facts of the case. On identical facts, we have decided the issue in favour of the assessee by dismissing the appeal of the Revenue in ITA No.43(Asr)/2012 for the assessment year 2003-04 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced but e-mails correspondence were submitted. 31.2 The Ld. CIT(A) after considering the report of the A.O. observed that most of the items related to arrears of rent/enhanced rent. Identical situation prevailed in assessment year 2002-03 where list of items sent to A.O. for examination and consequential disallowance was vacated on identical facts. The Ld. CIT(A) in the impugned appeal, allowed certain expenditure vide page 7 8 of his order. 31.3 The Ld. DR relied upon the order of the A.O. 31.4 The Ld. counsel; for the assessee, Mr. R.K. Gupta, CA, relied upon the submissions made before the ld. CIT(A). 31.5 We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) that certain expenditure were crystalised during the year as mentioned at page 7 8 of the order and therefore, the same are allowable during the impugned year. We find no infirmity in the order of the ld. CIT(A) in this regard and he has rightly allowed the claim of the assessee in respect of such expenses. Thus, ground No.7 of the appeal of the Revenue is dismissed. 32. In the result, all the appeals of the Revenue in ITA Nos. 43, 53, 85, 86 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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