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TMI Blog2020 (6) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of prior period expenses. Disallowance made on account of cost of debit card (ATM card) ATM machine charges - HELD THAT:- As decided in own case [ 2018 (11) TMI 1784 - ITAT KOLKATA ] we find that the issuance of ATM Cum Debit Cards to the customers of the assessee bank is part of the business activity of the assessee and there is no enduring benefit to the assessee out of incurring this expenditure. CIT(A) had observed that in the past the department had been accepting this expenditure as a revenue expenditure and we find no change in facts and circumstances of the case for the year under appeal with regard to the impugned issue warranting the department to take CL different stand. This fact has not been controverted by the revenue before us. Though the principle of res judicata does not apply to income tax proceedings in our opinion the principle of consistency cannot be given to go bye. Disallowance u/s 14A read with Rule 8D(2)(ii) of the Rules as applicable to the assessee bank - HELD THAT:- As decided in own case [ 2016 (1) TMI 135 - ITAT KOLKATA ] we uphold the impugned order of the Ld. CIT(A) deleting the disallowance made by the AO u/s 14A read with Rule 8D and dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e : Shri Soumitra Choudhury, Advocate For the Revenue : Shri I. Jamir, CIT, DR ORDER PER P.M. JAGTAP, VICE-PRESIDENT (KZ) This appeal is preferred by the Revenue against the order of Ld. CIT (A) 17, Kolkata dated 22.12.2016 and the same is being disposed of along with the cross-objection filed by the assessee being C.O. No. 47/Kol/2017. 2. The grounds raised by the Revenue in its appeal read as under: 1. The Ld. CIT(A) has erred in law and on facts in placing reliance on the judgement of M/s United Bank of India in the order of Hon'ble ITAT dated 30.12.2015 in ITA No. 1916/Kol/20l2 113/Kol/20l3 for the A.Y 2009-10 where the decision rendered is on misapprehension of the provision of section I l5JB of the IT Act- 1961 read with explanation 3 to Section 1I5JB of IT Act, l96l and ignoring the inclusive definition of company in Section I 15JB of the IT Act, 1961 . 2. The Hon ble CIT(A) has erred in law and on facts that the expenses incurred in earlier years cannot be allowed during the relevant assessment year as the assessee is maintaining its books of accounts on mercantile system of accounting. 3. The Ld. CIT(A) has erred in law and on facts that the ATM card is revenue expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DCIT reported in (2013) 33 taxmann.com 312 (Hyderabad - Tribunal) vide order dated 7.9.2012 *Maharashtra State Electricity Board vs JCIT reported in (2002) 82 ITD 422 (Mumbai Tribunal) vide order dated 6.8.2001 ITA Nos.1916/K/12 113/K/13-C-AM United Bank of India 2 *Kerala State Electricity Board vs DCIT reported in (2010) 329 ITR 91 (Ker) * Indian Bank vs Addl CIT in ITA No. 469 / Mds / 2010 dated 3.8.2011 for Asst Year 2000-01 * Kurung Thai Bank vs JCIT reported in (2012) 49 SOT 12 (Mumbai Tribunal) * Union Bank of India vs ACIT in ITA No. 4702 to 4706 / Mum / 2010 for the Asst Years 2002-03 to 2006-07 * ICICI Lombard General Insurance Co Ltd vs ACIT reported in 2012-TIOL-690-ITAT-Mum in ITA No. 2398/ Mum / 2009 dated 10.10.2012 for the Asst Year 2003-04 * Bank of India vs All. CIT reported in 2014 (5) TMI 929 in ITA No. 1498/Mum/ 2011 dated 9.4.2014 (Mumbai Tribunal) It was held by this tribunal that the provisions of section 115JB of the Act are not applicable in the case of the assessee bank and further held that the amendment brought in section 115JB of the Act read with Explanation 3 thereon by the Finance Act 2012 is applicable only with effect from Asst Year 2013-14 onward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been allowed in all earlier years in assessment completed u/s 143(3)of the I.T. Act, therefore, the disallowance of ₹ 31,15,854/- may be allowed in full. That moreover CIT(A) has allowed the said expenditure in assessment year 2011-12 by order dated 21.12.2016. Decision:- The liability of ₹ 31,15,854/- pertain to previous years but crystallized during the year. In past assessment years also this disallowance was considered and allowed by CIT(A) in A.Y. 2011-12. Hence, considering the submission of AR and nature of expenses and following consistency, I, therefore, allow these expenses of ₹ 31,15,854/- this year also. Appellant gets relief of ₹ 31,15,854/- As the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to that of A.Y. 2010-11 and 2012-13, we respectfully follow the order of the Tribunal for the said years and uphold the impugned order of the Ld. CIT(A) deleting the disallowance made by the AO on account of prior period expenses. Ground No. 2 is accordingly dismissed. 6. As regards the issue involved in Ground No. 3 relating to the deletion by the Ld. CIT(A) of the disallowance made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear under consideration as well as all the material facts relevant thereto are similar to that of A.Y. 2010-11 and 2012-13, we respectfully follow the order of Coordinate Bench of this Tribunal for the said years and uphold the impugned order of the Ld. CIT(A) giving relief to the assessee on this issue. Ground No. 3 of the revenue s appeal is accordingly dismissed. 7. At the time of hearing before us, the ld. representatives of both these sides have agreed that even the issue involved in ground no. 4 of the revenue s appeal is squarely covered by the order of the Tribunal dated 13.12.2015 passed in assessee s own case for A.Y. 2009-10 wherein a similar issue was decided in favour of the assessee for the following reasons given in paragraph no. 10 to 10.3 of its order: l0. The last issue to be decided in this appeal is as to whether disallowance u/s 14A of the Act read with Rule 8D(2)(ii) of the Rules could be made applicable to the assessee bank in the facts and circumstances of the case. 10.1. The brief facts of this issue is that the assessee bank was in receipt of exempted dividend income of ₹ 3,54,45,760/-. The Learned AO invoked the provisions of section 14A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lkata erred in fact as well as in law in dismissing the assessee's ground against addition by the assessing officer u/s. 40(a)(ia) of ₹ 14,84,01,248/- ignoring the fact that the entire amount was already paid the T.D.S. before 1iling of the return u/s. 139(1), therefore, the order passed by the Ld. CIT(A) is completely arbitrary, unjustified and illegal. 2. For that on the facts and in the circumstances of the case the Ld. C.I.T. (A)-17, Kolkata erred in fact as well as in law in dismissing the assessee's ground against addition by the assessing officer ₹ 4,34,000/- on share issue expenses ignoring the fact that 1/5th of the total share issue expense is allowable u/s 35D for five successive assessment years. Therefore, the Ld CIT(A) was wrong in disallowing the total amount instead of allowing ₹ 86,800/- (1/5th of ₹ 4,34,000/-), as such his finding is completely arbitrary, unjustified and illegal. 3. For that on the facts and in the circumstances of the case the Ld. C.I.T. (A)-17, Kolkata erred in fact as well as in law in dismissing the assessee s ground against addition by the assessing officer ₹ 31,47,73,346/- u/s. 36(1)(viii). The A.O. has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Hon ble Calcutta High Court in the case of CIT vs Virgin Creations (supra). He however has contended the claim of the assessee of having paid the TDS before the date of filing of return of income u/s 139(1) of the Act for the year under consideration requires verification and the AO may be given an opportunity to verify the same. We find merit in this contention of the Ld. DR. This issue is accordingly restored to the file of the AO for the limited purpose of verifying the claim of the assessee of having paid the relevant TDS amount before the date of filing of return of income u/s 139(1) of the Act for the year under consideration and to decide the same accordingly keeping in view the decision of the Tribunal in assessee s own case for A.Y. 2010-11 (supra) as well as the decision of Jurisdictional High Court in the case of Virgin Creations (supra). Ground No. 1 of the assessee s cross-objection is accordingly treated as allowed for statistical purpose. 12. As regards the issue involved in Ground No 2 relating to the disallowance of share issue expenses of ₹ 4,34,000/- the limited relief that the learned counsel for the assessee has sought is for allowing the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t time. Following the ratio laid down in the said decisions, the Ld. CIT(A) recorded a finding of fact that share issue expenditure is covered under section 35D of the Act and is a legal issue and thus came to the conclusion that the assessee is eligible for deduction under section 35D equal to 1/5th of the total preliminary expenses. Accordingly the ld CIT(A) decided the issue in favour of the assessee by directing the AO to allow the same. 20. After hearing both the parties and perusing the material on record, we find that the Revenue has challenged that the Ld. CIT(A) has erred in accepting the issue of grant of deduction in respect of share issue expenses under section 35D which was not raised before the AO. After perusing the appellate order, we find that the appellate authority has passed the order after following the decisions of the Hon'ble Bombay High Court in the case of CIT vs. Pruthvi Brokers and Shareholders Pvt. Ltd. and Grasim Industries Ltd. (supra) wherein the decisions of the Hon'ble Supreme Court in the case of Goetz India Ltd. has been considered and it was held that the fresh issue can be admitted before the appellate authority. We, therefore, do not fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following reasons given in paragraph no. 17 of its order: 17. We have considered the rival submissions and also perused the relevant material available on record. It is observed that the apportionment of operating expenses made by the assessee in the ratio of eligible business to total business by taking into consideration the advances and deposits while determining the profit of the eligible business of long-term finance eligible for deduction under section 36(1)(viii) was not accepted by the authorities below mainly on the ground that the said basis adopted by the assessee had also taken into consideration the nonperforming assets from which no income was recognized. According to them, when no income was recognized from the non-performing assets, there was no justification to apportion operating expenses by taking into consideration the non-performing assets which did not yield any income. As rightly contended on behalf of the assessee in this regard before the ld. CIT(Appeals) as well as before us, the operating expenses were required to be incurred by the assessee in relation to its total banking business and the non-performing assets definitely formed part of such business. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d No.5 of assessee s cross-objection relating to the adoption of the Municipal Valuation by the ld. CIT(A) for determination of rental income from the relevant properties, it is observed that a similar issue was involved in assessee s own case for A.Y 2009-10 and while deciding the same vide paragraph no.8.3 of its order dated 13.05.2012(supra), it was held by this Tribunal that the ld. CIT(A) had correctly adopted the municipal valuation for determination of rental income of the assessee from the concerned property owned by it. Respectfully following the said order of this Tribunal in assessee s own case for A.Y 2009-10, we find no infirmity in the impugned order of the ld. CIT(A) directing the A.O to adopt municipal valuation to determine the rental income of the assessee from the concerned properties owned by it. Ground No.5 of assessee s cross-objection is accordingly dismissed. 19. Before parting, it is noted that the order is being pronounced after ninety (90) days of hearing. However, taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. For coming to such a conclusion, we rely upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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