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TMI Blog2022 (1) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 in ITA No.1195/Bang/2015 passed by the Income Tax Appellate Tribunal (for short, 'the Tribunal'), relating to the assessment year 2012-13, whereby the order of the Appellate Commissioner has been confirmed. 2. Though the appeal was admitted to consider the substantial question of law no.3 raised in the appeal, having heard the learned Counsel for the parties, we find it appropriate to admit all the substantial questions of law raised by the revenue, which reads as under: "1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee can compute its income chargeable under the head business and profession under hybrid system of accounting when Sec.145 of the Act does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the amortization premium paid for acquisition of Government securities held as long term investment that are in the nature of capital investment is allowable as revenue expenditure? 3. Re: substantial question of law nos.1 & 2:- The issues involved herein are no more res integra in view of the ruling of the coordinate bench of this Court in the case of COMMISSIONER OF INCOME TAX VS CANFIN HOMES LTD. - (2012) 347 ITR 382, whereby identical questions have been considered and answered in favour of the assessee and against the revenue. It has been categorically observed that the contention of the revenue that in respect of nonperforming assets even though it does not yield any income as the assessee has adopted mercantile system of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of the directive from NABARD, there is also commercial exigency. It has also recorded that there was sufficient mobilization of loans and advances and deposits directly relatable to the said expenditure has been established by the assessee. There being relatable deposits to the loans and advances, the objective being laudable, allowed the appeal filed by the assessee deleting the addition made by the Assessing Officer. On appeal preferred by the revenue before the Tribunal, the order of the Commissioner of Income Tax (Appeals) has been confirmed dismissing the appeal. 6. On extensive analysis of the factual aspects, the Tribunal has arrived at a conclusion that though the assessee is promoting the formation of self help groups in the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to incur such expenditure. It is relevant to refer at this stage to the legislative history of section 37 of the Income-tax Act, 1961 which corresponds to section 10(2) (xv) of the Act. An attempt was made in the Income-tax Bill of 1961 to lay down the 'necessity' of the expenditure as a condition for claiming deduction under section 37. Section 37(1) in the Bill read "any expenditure .... laid out or expended wholly, necessarily and exclusively for the purposes of the business or profession shall be allowed" The introduction of the word 'necessarily' in the above section resulted in public protest. Consequently when section 37 was finally enacted into law, the word 'necessarily' came to be dropped. The fact that s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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