2012 (12) TMI 717

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.... Accordingly the said ground is dismissed as withdrawn. The other grounds give rise to a single issue viz., whether the Ld CIT(A) is justified in confirming the disallowance of Rs.35,41,700/- relating to the diminution in the value of its current investments made in Government of India securities. 3. In the appeal filed by the revenue, the decision of Ld CIT(A) in deleting the disallowance of staff welfare expenditure is being assailed. 4. The facts relating to the above said issues are stated in brief. The assessee is a non-banking financial company engaged in the business of advancing money on the security of gold. It is also engaged in trading of shares and securities. During the year under consideration, it purchased 10.25% Government....

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....iture. The Ld A.R further submitted that the assessee has sold the above said security during the year ending 31.3.2009 and has accounted for entire profit (which includes the amount claimed as expenditure during the year under consideration) as its income. Before us the assessee has filed a copy of annual report relating to the financial year 2008-09. In the said annual report, the investment made in the Government of India security is shown as "Current investment" only. The value of the said investment as on 01.4.2008 was shown at Rs.11,81,25,000/-, meaning there by the assessee has further reduced the value during the year ending 31.3.2007 and 31.3.2008. It is not known whether the AO has made similar disallowances in those years or not.....

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....ue in the assessee's own case relating to the assessment year 2004-05. We extract below the relevant observations made by the Tribunal on this issue:- "12. The last issue relates to the disallowance of contributions made to as well as interest paid on "Staff welfare scheme a/c". The assessee has made contributions in respect of its employees to a scheme named as "Staff welfare Scheme A/c". The amount so contributed by it on behalf of its employees was treated as salary income in the hands of respective employees and income tax was also deducted there on. The amount accumulated in the name of employees were collectively accounted as "Staff Welfare Scheme" and the accumulated balance was not invested any where else. Instead, the assessee its....