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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 ..... -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 partition as they are permanent partitions and not susceptible to dismantling. 3. On the facts and circumstances whether the ld. CIT(A) was right in allowing depreciation of 60% as against the admissible rate of 25% on UPS & Batteries. 4. 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 ₹ 10,45,220/- 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue 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 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 ₹ 10,45,220/- 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 ₹ 4.58 crores & ₹ 1.38 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount 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 with reference to the mandate of these provisions." 5. On the facts and circumstances whether the ld. CIT(A) was right in allowing expenditure of ₹ 3,10,57,775/-(Correct figure is ₹ 10,57,775.-claimed on account of scholarship & education aid to different persons when there is no proximate nexus of this expenditure with the business activities of the assessee as per the provisions of section 37(1) of the Income Tax Act, 1961 as it is nothing but of the nature of charity." 8. In CO No.06(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 inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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.4(Asr)/2012 for the assessment year 2003-04. Our decision in this order shall be applicable in other appeals of the Revenue and C.Os of the assessee, being on identical facts wherever applicable. 12.1 In ground No.1 of the Revenue, the brief facts are that the A.O. has disallowed an amount of ₹ 8,75,79,887/- treating it as claimed in excess to as provided under section 36(1)(viia) of the I.T.Act, in respect of eight rural branches of the bank by not treating them as rural branches on the ground that these branches were situated at places where population was more ten thousand. 12.2 The Ld. CIT(A) allowed the claim of the assessee following the order of the ITAT, Amritsar Bench, in ITA No.363(Asr)/1999 and others mentioned at page 5 of CIT(A)'s order, on identical facts. 12.3 The Ld. DR relied upon the order of the Assessing officer. 12.4 The Ld. counsel for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, the brief facts are that the AO has allowed depreciation on UPS and batteries attached with computers. @ 25% instead of 60% as claimed. 14.1 The Ld. CIT(A) following the order of his predecessor, who has followed the decision of the ITAT, Amritsar Bench, in assessee's own case for the assessment year 1997-98 and 2000-01 in ITA No.274/275(Asr)/2004, has allowed the claim of the assessee as depreciation onf UPS and batteries attached to the computer @ 60%. 14.2 The Ld. DR relied upon the order of the Assessing Officer and the ld. counsel for the assessee relied upon the order of the ld. CIT(A). 14.3 We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) at page 6 & 7 of his order where the issue is covered by the decision of our own Bench, mentioned hereinabove, in favour of the assessee. In the facts and circumstances of the case, we fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee for the assessment year 2003-04. 18.1. With regards to grounds No.1 to 4 of the revenue and C.O. of the assessee, the AO denied exemption under section 10(23G) of the Act and made a disallowance under section 14A. 18.2 The Ld. CIT(A), allowed the claim of the assessee under section 10(23G) and restricted the disallowance u/s 14A to ₹ 10,45,220/- as per his order in para 4 to 5.3 at pages 4 to 10 of his order. 19. A perusal of record and arguments by the parties before us, the present issue is covered by our own decision in the assessee's own case for the assessment year 2002-03 in ITA No.136(Asr)/2010 and C.O. No.09(Asr)/2010 dated 31.12.2012 and following the same, the AO was not justified in making any disallowance, as claimed by the assessee. Accordingly ground Nos. 1 to 4 of the Revenue are dismissed and sole ground of the assessee in the C.O. is allowed. 20. As regards ground No.5 of the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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.06(Asr)/2012 of the assessee for the assessment year 2004-05. 24.1 As regards grounds No. 1 to 4 of the Revenue and C.O. of the assessee are concerned, the AO denied exemption u/s 10(23G) of the Act and made disallowance under section 14A of the Act. 24.2 The Ld. CIT(A) allowed the claim of the assessee and restricted the disallowance under section 14A at ₹ 16,68,487/- vide para 4 to 5.3 of his order. 24.3 After hearing the parties and on perusal of record, the issue in the present appeal of the Revenue and C.O. of the assessee is squarely covered by our own decision in assessee's own case for the assessment year 2002-03 decided by this Bench in ITA No.136(Asr)/2010 and C.O. No.09(Asr)/2010, dated 31.12.2012. Following the same, the AO is not justified in disallowing the claim of the assessee. Accordingly, grounds No. 1 to 4 of the Revenue are dismissed and sole ground in the C.O. of the assessee is allowed. 25. As regards ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ival 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.2 of the Revenue being on identical facts is dismissed. 29. As regards ground No.3 of the Revenue, the AO allowed depreciation on UPS and batteries @ 25% instead of 60%, as claimed by the assessee, following the order of his predecessor, as mentioned at para 9 of his order. The ld. CIT(A) also followed the decision of the ITAT, Amritsar Bench in the case of the assessee for the assessment year 1997-98 & 2000-01 in ITA Nos. 274 & 275(Asr)/2004 on identical facts. 29.1 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 mentioned hereinabove and following the same ground No.3 of the Revenue being on identical facts is dismissed. 30. As regards grounds No. 4, 5 & 6 and C.O. No.33 of the assessee are concerned, the AO made disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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