2017 (8) TMI 751

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....ER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Revenue is in appeal against the judgement of the Income Tax Appellate Tribunal dated 17.08.2016 raising the following question of law for our consideration: Whether on the facts and circumstances of the case, Appellate Tribunal was justified in deleting disallowance of business expenditure amounting to Rs. 1,07,11,630/-? 2. The issue pertains to all....

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....attraction towards the bank is wholly and exclusively necessary for the purpose of business. The Hon'ble High Court of Gujarat (Full Bench) in the case of Karjan Cooperative Cotton Sales Ginning Pressing Society (supra) has held that it was absolutely necessary for the assessee to maintain goodwill amongst its members and to lure them to continue to do their business with the society if it give pr....

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....the bank in the prevailing competition so that, the members place their deposits with the assessee bank and also continue to borrow funds from the assessee bank in order to improve the profit earning and income of the assessee bank. We have also considered that the amount spent on the aforesaid expenditures is very marginal compared to the amount of interest realised on the advances made to the me....

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....ndings, we allow the aforesaid expenditure as business expenditure under Section 37 of the Act. 3. It can thus be seen that the Tribunal accepted the assessee's version that the expenditure was incurred for the purpose of business to maintain goodwill and continuity of business being provided by important members. It was pointed out that these members had provided for nearly 98% of the bank's bu....