TaxTMI 
TaxTMI 
2017 (5) TMI 1695
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....case and in law the Ld.CIT(A)-4, Pune was not justified in confirming the addition of Rs. 16,97,027/- claimed as broken period interest made by the A.O. The issue is covered in favour of the assessee bank by the judgment of Hon'ble Jurisdictional Bombay High Court judgment and also judgments of the Benches of the Tribunal. The addition sustained be quashed. 2) On the facts and circumstances of the case and in law the Ld. CIT(A)-4, was not justified in confirming the addition of Rs. 26,05,278/- made by A.O. and the agitated before her vide ground of appeal No. 4 which are in the nature of voluntary retirements of the employees. The payments are considered in recognition of their past services. The same be allowed to the assessee....
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....otal income of Rs. 2,31,61,482/-. The case of the assessee was taken up for scrutiny. The Assessing Officer during the course of assessment proceedings noted that the assessee had claimed deduction of Rs. 16,97,027/- towards broken period interest. The assessee was show caused to explain why the same should be allowed. The show cause notice issued by the Assessing Officer and the submissions of assessee are reproduced in the assessment order. However, the Assessing Officer held that the assessee was not eligible for broken period interest in respect of securities purchased during the previous year by the bank for the reason that such expenditure was laid out as capital outlay. Therefore, any interest elem....
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....peal No.1 raised by the assessee is thus, allowed. 9. The issue in ground of appeal No.2 is against the addition of Rs. 26,05,728/- by disallowing the payment made on account of voluntary retirement of the employees. 10. Brief facts relating to the issue are that, the assessee during the year under consideration had claimed sum of Rs. 26,05,728/- as ex-gratia payments to prematurely retired employees. The Assessing Officer disallowed the claim of assessee in the absence of any scheme formulated by the assessee bank. The plea of the assessee that the ex-gratia payment was made to the employees in recognition of their long term and meritorious services to the bank, was not accepted in the absence of for....
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....uently, the same was disallowed by the Assessing Officer. The CIT(A) on the other hand treated the said expenditure to be capital in nature as the services of the said employees resulted in long term benefit to the assessee and hence was not allowable as revenue expenditure under section 37(1). 22. In the facts and circumstances of the case, where the assessee in recognition of the services provided to its retiring employees make certain exgratia payments in recognition of their services, which are not based on any scheme or instruction formulated by the employer assessee, then the same partakes the nature of profit in lieu of salary. The relationship between the assessee and retiring employees was admittedly as of employer a....
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....said addition in the hands of assessee. 17. On perusal of record, it transpires that the assessee had claimed the deduction on account of municipal taxes on actual payment basis, in the earlier years, since the assessee was following mercantile system of accounting. Once the refund of such municipal taxes has been received by the assessee in the year under consideration, the same is to be added as income in the hands of assessee. Accordingly, the ground of appeal No.3 raised by the assessee is dismissed. 18. The last issue raised by the assessee is against the addition of Rs. 5,000/- on account of prior period expenses. The said expenses were on account of advertisement expenditure relating to assessment ye....