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TMI Blog2019 (1) TMI 1607X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal has allowed the expenditure by holding that the assessee had to maintain good relations with the members and thus the expenditure incurred is towards the welfare of the members and same is supported by the decision of Hon ble Gujarat High Court in the case of Karjan Co-operative Cotton Sales Ginning Pressing Society vs. CIT [ 1992 (1) TMI 39 - GUJARAT HIGH COURT] . In view of this matter, respectfully following the decision of Co-ordinate Bench as mentioned above, this ground of appeal of the Revenue is dismissed. Disallowance of Special Long Term Finance Fund u/s 36(1)(viii) - HELD THAT:- Both parties have agreed that this issue is covered against that Revenue by the order of Tribunal for assessment year 2009-10 in the case of The Surat National Co-operative Bank Ltd [ 2013 (8) TMI 925 - ITAT AHMEDABAD] wherein held expenditure incurred for purchase of articles for presentation only to its members for keeping alive good image among members and for generating goodwill and ensuring continuity of business with member societies was geld to be expenditure incurred wholly and exclusively for the purpose of business. - delete the above disallowance and allow this ground o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the head payment to Education Fund on the ground that this amount is estimated provision towards fund created as per section 69 of Gujarat Co-Operative Societies Act and it has not been spent during the year under consideration. 4. In appeal, the CIT(A) has deleted this disallowance by following the decision of Co-ordinate Bench of Ahmedabad Tribunal in the case of Surat National Co-Operative Bank Ltd. for A.Y. 2007-08 dated 23.08.2013 in I.T.A.No.3242/Ahd/2010 wherein following the decision of Hon ble Gujarat High Court in the case of Mehsana District Co-Operative Milk Producers Union Ltd. 258 ITR 780 (Gujarat), such disallowance were deleted. 5. Being aggrieved the Revenue is in appeal before this Tribunal. The ld. Sr. D.R. relied on the order of the AO whereas the learned counsel for the assessee supported the order of the CIT(A) and submitted that the issue is covered by aforesaid decision of Tribunal. 6. We have considered the facts and found that the issue is covered against the Revenue by the decision of Tribunal in the case of Surat in ITA No.3242/Ahd/2010 for A.YL. 2007-08 dated 23.08.2013 wherein para 16 this Tribunal ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this issue was held in favour of the assessee by holding that the bank had to maintain good relations with the members for which it has incurred expenditure towards welfare of the members as held by the Hon ble Gujarat High Court in the case of Karjan Co-operative Cotton Sales Ginning Pressing Society vs. CIT 199 ITR 17 [1993] 69 taxmann.com 0304 (Guj). 11. Being aggrieved, the Revenue filed this appeal before Tribunal. The ld. Sr.D.R. relied on the order of the AO but could not bring anything contrary to the finding of the ld. CIT (A). 12. Au contraire, the learned counsel for the assessee supported the order of the CIT(A) and submitted that the issue is covered by aforesaid decision of Tribunal. 13. We have considered the facts and found that the issue is covered against the Revenue by the decision of Tribunal in the case of in ITA No.3242/Ahd/2010 for A.Y. 2007-08 dated 23.08.2013 wherein the Tribunal has allowed the expenditure by holding that the assessee had to maintain good relations with the members and thus the expenditure incurred is towards the welfare of the members and same is supported by the decision of Hon ble Gujar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment proceedings, it was noticed by AO that assessee has claimed gift expenses of ₹ 17,10,728/-. As per assessee s explanations, these gifts were distributed to the members of the bank to keep alive good image about members and for generating goodwill and ensuring continuity of business with members of societies and such expenses are allowable in the light of decision of Hon'ble Gujarat High Court in the case of Daskroi Taluka Co-operative Sales Union Ltd. reported in 126 ITR 413. The explanation of assessee was not accepted by AO on the ground that such expenses appeared to be an altruistic and philanthropic urge which should have been satisfied by assessee at its own cost not at the cost of public exchequer or other tax payers and such expenses also prove that assessee wants to increase the expenditure on some pretext or other thereby reducing his tax liability. With this conclusion; AO disallowed the gift expenses of ₹ 17,10,728/- and added to the income of assessee. 9. Before Ld. CIT(A), assessee's submission was as follows 3.2 During the appellate proceedings, it was submitted by appellant that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Sale Ltd. 126 ITR 413, we feel no need to interfere with the order passed by him and the same is hereby upheld. ACIT-1(2) Surat v. The Prime Co-Operative Bank Ltd. /I.T.A. No.292/SRT/2017/A.Y.: 2013-14 Page 9 of 14 11. Ground No. 3 relates to deletion of addition of ₹ 38,37,116/- made on account of Staff Ex-Gratia. 20. We further, found that the issue is covered by decision of Tribunal in assessee own case for the assessment year2010-11 dtd. 06.07.2018 in ITA No.1268/Ahd2015 wherein the Tribunal has observed as under: 10.We have considered the facts and rival submission. We find that the issue has been duly covered by the decision of Tribunal in the assessee s own case for A.Y. 2009-10 dtd.23.08.2013 wherein, the Hon ble Tribunal observed as under : 9. Before Ld. CIT(A), assessee s submission was as follows : 3.2 During the appellate proceedings, it was explained by appellant that during the assessment proceedings complete details of working out the 20% of profits derived, were furnished to the AO but the same were ignored As regards Ground No.II about deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, we find that the issue is covered in favour of the assessee, therefore, appeal of the revenue on this ground is dismissed. 21. In the light of the above, as the facts are identical as agreed by the parties, and finding of the ld. CIT (A) remained as un uncontroverted before us, therefore, respectfully following finding of the Tribunal in assessee s own case as well as in the case of Surat National Co-operative Bank Ltd. in ITA No.2793/Ahd/2012 dated 23/08/2013, this ground of appeal of Revenue is dismissed. 22. Ground No. 4 states that CIT (A) has not justified in deleting the addition of ₹ 1,48,05,817/- made by the AO on account of disallowance of investment depreciation without appreciating facts that the assessee has failed to provide any separate working for investment of depreciation nor provided any supporting evidence. 23. Brief facts are that the assessee has claimed deduction of ₹ 1,48,05,817/- under the head investment depreciation (as per separate calculation) . The AO disallowed the same as the assessee has not submitted separate working for investment depreciation nor provided any supporting evidence an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule 17 to Accounts for the year ended 31.03.2013 shown in return of income, the bank wrote back ₹ 2,86,27,844/- as excess provision for investment depreciation which included ad-hoc amount of depreciation of ₹ 2,50,00,000/- for provision for investment depreciation. As per the working filed, the assessee way back in A.Y. 2012-13 had claimed investment depreciation loss of ₹ 1,21,88,023/- (shown in schedule 17 of provisions contingencies). This market to make loss was reduced to ₹ 19,93,840/- in A.Y. 2013-14 and after reducing the outstanding loss of ₹ 19,93,840/- from investment depreciation of ₹ 1,21,88,023/- claimed in earlier year, the assessee was required to pay tax on ₹ 1,01,94,183/- i.e. [1,21,88,023 - 19,93,840] only being eligible profit for taxation and therefore, the assessee has rightly claimed the amount of ₹ 1,48,05,817/- as investment depreciation loss instead of the entire amount of ₹ 2,50,00,000/-. Thus, we find that the ld. CIT (A) has verified the working submitted by the assessee before him during appellate proceeding and after analyzing the same has allowed the claim. These facts are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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