Tribunal allows deduction for statutory liability, remands LIC premium, and directs AO on business expense.

The Tribunal allowed the assessee's appeal regarding the addition of Rs.65,67,700 debited to the Suraksha fund, considering it a statutory liability deductible under section 37. The issue of Rs.15,71,767 premium paid to LIC was remanded for further verification. The Tribunal directed the AO to allow the Rs.28,17,236 premium for Leave Encashment Group Scheme as a business expense. The matter of interest charges under sections 234A, 234B, and 234C was deemed consequential and ordered accordingly. The appeals for multiple assessment years were consolidated and partly allowed for statistical purposes.

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Issues Involved:
1. Confirmation of addition of Rs.65,67,700/- debited to Suraksha fund.
2. Confirmation of addition of Rs.15,71,767/- being premium paid to LIC group gratuity scheme.
3. Confirmation of addition of Rs.28,17,236/- paid as premium for Leave encashment group scheme.
4. Legality of the charge of interest u/s 234A, 234B, and 234C of the Act.

Issue-wise Detailed Analysis:

1. Confirmation of Addition of Rs.65,67,700/- Debited to Suraksha Fund:
The assessee filed the return of income declaring Rs.3,89,69,650/- and debited Rs.65,67,700/- to the Suraksha fund. The Assessing Officer (AO) disallowed this amount, stating it was not created by RBI instructions but by the Registrar of Co-operative Societies, Rajasthan, and did not increase the bank's profitability. The CIT(A) upheld this view, noting that the amount included a provision of Rs.58,00,000/- and interest of Rs.7,67,700/-, which were not allowable as deductions under section 37 of the Act. The Tribunal, however, decided in favor of the assessee by following a precedent set in the case of The Sirohi Central Coop. Bank Ltd., where similar contributions were deemed statutory liabilities and thus deductible.

2. Confirmation of Addition of Rs.15,71,767/- Being Premium Paid to LIC Group Gratuity Scheme:
The AO disallowed Rs.15,71,767/- paid as premium to LIC, citing the absence of fund approval as per section 36(v) of the Act. The CIT(A) confirmed this, stating the payment was for future liabilities and not current expenses. The Tribunal set aside this issue to the AO for fresh consideration, emphasizing the need to verify whether the fund was approved, referencing the judgment in CIT vs. Bitoni Lamps Ltd.

3. Confirmation of Addition of Rs.28,17,236/- Paid as Premium for Leave Encashment Group Scheme:
The AO disallowed Rs.28,17,236/- as the assessee did not provide evidence of actual payment. The CIT(A) upheld this, noting the payment was for future liabilities. The Tribunal referenced its earlier decision in The Sirohi Central Coop. Bank Ltd., which allowed such premiums as business expenses under section 37. Therefore, the Tribunal directed the AO to allow the claim of the assessee.

4. Legality of the Charge of Interest u/s 234A, 234B, and 234C of the Act:
The issue regarding the charging of interest under sections 234A, 234B, and 234C was deemed consequential by both parties. The Tribunal ordered accordingly.

Consolidated Order:
The Tribunal consolidated the appeals for assessment years 2007-08, 2008-09, and 2009-10, as the issues were common. The findings for I.T.A. No.212/Jodh/2010 were applied mutatis mutandis to the other appeals. The appeals were partly allowed for statistical purposes.

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