Tribunal upholds deletion of broken period interest & retirement payments in staff appeal

The Tribunal upheld the deletion of the addition of broken period interest and voluntary retirement payments made to staff. The appeal by the Revenue was dismissed, and the order was pronounced on August 19, 2019.

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Issues involved:
1. Deletion of addition of broken period interest.
2. Deletion of addition of voluntary retirement payments made to staff.

Analysis of the Judgment:

Issue 1: Deletion of addition of broken period interest
The Revenue appealed against the deletion of the addition of broken period interest. The Tribunal referred to previous cases and cited the Hon'ble Bombay High Court's ruling that broken period interest is allowable as a deduction. Relying on this precedent, the Tribunal allowed the deduction for broken period interest claimed by the assessee. The appeal by the Revenue on this issue was dismissed.

Issue 2: Deletion of addition of voluntary retirement payments made to staff
Regarding the addition of voluntary retirement payments made to staff, the Assessing Officer disallowed the expenses, citing section 35DDA of the Income-tax Act and held that they were not allowable under section 37(1) of the Act. However, the CIT(A) allowed the claim based on a Tribunal ruling in favor of another bank. The Tribunal, in previous cases, had decided in favor of the assessee on similar grounds. Therefore, the Tribunal dismissed the Revenue's appeal on this issue as well.

In conclusion, the Tribunal upheld the deletion of the addition of broken period interest and voluntary retirement payments made to staff. The appeal by the Revenue was dismissed, and the order was pronounced on August 19, 2019.

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