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TMI Blog2015 (12) TMI 1689X X X X Extracts X X X X X X X X Extracts X X X X ..... ges when the decision of Hon'ble Apex Court in the case of CIT vs. Bharti Cellular Ltd., relied upon, is distinguishable from the present case as some amount of human intervention is involved in clearing of cheques by the clearing house and as such the activity constitutes technical services. 3. On the facts and circumstances whether the ld. CIT(A) was right in treating the Bari Brahmana Branch as eligible for deduction u/s 36(1)(viia) when the branch is located in Bari Brahmana town having population of 31,616/- as per the "Digest of Statistics for 2002-03" published by the Government of J & K. 4. On the facts and circumstances whether the ld. CIT(A) was right in allowing 100% depreciation on wooden partitions as they are permanent structures fixed for dividing spaces in the office for the staff to work and not susceptible to dismantling. In all modern offices, it is usual to have such wooden partitions which are not shifted or relocated at regular intervals and they are always fixed at a particular location. 5. On the facts and circumstances whether the ld. CIT(A) was right in deleting the disallowance made u/s 40(a)(ia) of the Income Tax Act, 1961 on account of non deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical or consultancy services'. Herein, however, the payment has been made as processing charges to the SBI for managing consortium account of FCI. It remains undisputed that the loan involved was processed by the SBI and not by the assessee bank. Therefore, the provisions of section 194J did not get attracted. As rightly noted by the ld. CIT(A), according to section 2(28) of the Act, 'Interest' means interest payable in respect of any money borrowed, or debt incurred, or in respect of any other credit facility, which has been utilized. The processing charges had been deducted by the SBI from the gross interest paid, i.e., the processing charges were included in the interest earned. That being so, it has rightly been held that no tax was required to be deducted on the processing charges paid to the SBI. In this regard, the Tribunal, vide its order (supra) in the assessee's case for the assessment year 2008-09, has observed as follows: "6. We have heard the rival contentions and perused the facts of the case. As argued by the Ld. counsel for the assessee Mr. R.K.Gupta, CA that processing charges are part of the interest, as defined in section 2(28A) of the Act, which states that "I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et rays which scans the genuineness of cheques. No human intervention is required in MICR clearing of cheques by way of examining technical data, analyzing them and making them useful for subsequent use. In fact, MICR clearance of cheque can be possible by a mechanized system only and not through human intervention keeping in view the processing of bulk cheques. Therefore, in the facts and circumstances of the present case, the decision of Hon'ble Supreme Court in the case of CIT vs. Bharti Cellular Ltd. (supra) is clearly applicable and the ld. CIT(A) has rightly deleted the disallowance made by the A.O. in ground No.2 of the Revenue. Thus, ground No.2 of the Revenue is dismissed." 11. The disallowance was made for non-deduction of tax at source on MICR charges paid to clearing house by various Branches of the Bank. MICR stands for Magnetic Ink Character Recognition. As per this system, the machine recognizes the numeric data printed with magnetic charged ink. This is done with the help of ultraviolet rays which scan the genuineness of cheques. The department has not been able to dispute that MICR clearance of cheques can be possible by a mechanized system only and not through hu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bari Brahmana, where the population is of more than 10000. On appeal, the ld. CIT(A) deleted the addition. 16. The ld. DR contended that the ld. CIT(A) has erred in deleting the disallowance, since the Bari Barhamana Branch of the assessee is located in Bari Brahamana town having a population of 31616, as per the Digest of Statistics for 2002-03, published by the Government of J & K. 17. The ld. counsel for the assessee, on the other hand, besides placing reliance on the impugned order, also relied on the Tribunal order in the assessee's case for the assessment year 2008-09, wherein, the Tribunal has held in favour of the assessee, as follows: 10. We have heard the rival contentions and perused the facts of the case. On the identical facts, similar issue has come up before the ITAT, Amritsar Bench, in the case referred to in the CIT(A)'s order of ITAT Amritsar Bench, passed in ITA Nos.363(Asr)/99, 364(Asr)/99, 365(Asr)/99, 366(Asr)/99, 274(Asr)/2004 & 275(Asr)/2004, dated 29.08.2005, where the said issue has been identically dealt by this Bench in favour of the assessee for allowing deduction under section 36(1)(viia) of the Act and therefore, the ld. CIT(A) has rightly allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A) was wrong in allowing 100% depreciation on wooden partitions as permanent structures fixed for dividing spaces in the office for the staff to work, not susceptible to dismantling; and that in all modern offices, it is usual to have such wooden partitions, which are never shifted or relocated at regular intervals and they are always fixed at a particular location. 22. The ld. counsel for the assessee, per contra, has relied on the impugned order, as also on the Tribunal order (supra) for the AY 2008- 09. 23. It is seen that depreciation was claimed on the wooden partitions, claiming that the expenditure was incurred on wooden partitions, as purely temporary erections, eligible for 100% depreciation as provided under the I.T.Act, 1961. A similar addition was deleted by the ld. CIT(A) for the assessment year 2002-03, which deletion was not challenged by the department. The wooden partitions, as remains undisputed, were erected in leasehold (tenanted) premises. The partitions had not provided any enduring advantage to the assessee. They were redesigned time and again, as per the assessee's business requirement. It is also not the case of the department that these partition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -71), the arguments made by the Ld. DR has been dealt with, which for the sake of clarity are reproduced hereunder: "6.1. Thus, respectfully following the aforesaid order of the ITAT, Delhi Bench 'I' we dismiss the appeal filed by the Revenue by holding that the Jammu Development Authority is in exempted category where the provisions of section 194(1) are not applicable. We also hold that exception provided in section 194A(3)(iii)(f) of the Act and as per notification, the Jammu Development Authority is a creation of J & K Development Act and satisfies the condition at Entry No.39 of the said notification and we hold that no tax was deductible on accrued interest on FDRs of Jammu DevelopmentAuthority with J & K Bank Ltd. Keeping in view the above discussions, we hold that no interference is called for in the well reasoned impugned order passed by the ld. first appellate authority and accordingly we uphold the same. Hence, the appeal of the Revenue in ITA No.206(Asr)/2011 is dismissed." 15.1. In such facts and circumstances, we find no infirmity in the order of the ld. CIT(A), since on identical facts, the issue is covered by our own decision in ITA Nos. 206 to 210(Asr), dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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