TaxTMI 
TaxTMI 
2020 (6) TMI 7
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....n of company in Section I 15JB of the IT Act, 1961 . 2. The Hon'ble CIT(A) has erred in law and on facts that the expenses incurred in earlier years cannot be allowed during the relevant assessment year as the assessee is maintaining its books of accounts on mercantile system of accounting. 3. The Ld. CIT(A) has erred in law and on facts that the ATM card is revenue expenses when the ATM card is integral part of ATM Machine which is capital expenditure and hence the same is also capital expenditure. 4. The Ld. CIT(A) has erred in law and on facts in placing reliance on the concept of excess sufficient fund which is separate from its interest bearing fund. The assessee is a banking company who takes deposit from people and lends the money for loans and trades the money in shares and securities. The Ld. CIT (A) has erred in law by observing contradictorily the definition of excess sufficient funds and the nature of business of the assessee." 3. We have heard the arguments of both the sides and also perused the relevant material available on record. As regards the issue involved in ground no. 1 relating to the applicability of section 115JB in the case of the assessee being a b....
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....CIT reported in 2014 (5) TMI 929 in ITA No. 1498/Mum/ 2011 dated 9.4.2014 (Mumbai Tribunal) It was held by this tribunal that the provisions of section 115JB of the Act are not applicable in the case of the assessee bank and further held that the amendment brought in section 115JB of the Act read with Explanation 3 thereon by the Finance Act 2012 is applicable only with effect from Asst Year 2013-14 onwards in line with the Notes to Clauses of Finance Act 2012 . 3.3. Respectfully following the co-ordinate bench decision of this tribunal in the case of UCO Bank (supra), we also hold accordingly. Hence the ground no. 2 raised by the assessee in this regard is allowed." 4. The aforesaid decision rendered in assessee's case for A.Y. 2009-10 has been subsequently followed by the Tribunal to decide a similar issue in assessee's own case for A.Y. 2010-11 vide its order dated 16.11.2018 passed in ITA No. 1972/Kol/2017. This issue thus is squarely covered in favour of the assessee by the orders of the Tribunal in assessee's own case for the immediately preceding two years i.e. A.Y. 2009-10 and 2010-11 and respectfully following the same, we uphold the impugned order of the ld. CIT(A) h....
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....reto are similar to that of A.Y. 2010-11 and 2012-13, we respectfully follow the order of the Tribunal for the said years and uphold the impugned order of the Ld. CIT(A) deleting the disallowance made by the AO on account of prior period expenses. Ground No. 2 is accordingly dismissed. 6. As regards the issue involved in Ground No. 3 relating to the deletion by the Ld. CIT(A) of the disallowance made by the AO on account of cost of debit card (ATM card) & ATM machine charges amounting to Rs. 135,39,660/-, the ld. representatives of both these sides have agreed that this issue is also squarely covered in favour of the assessee by the order of the Tribunal dated 16.11.2018 (supra) for A.Y. 2010-11 and 2012-13 wherein a similar issue was decided by the Tribunal in favour of the assessee vide paragraph no. 7 to 8 as under: "7. Ground No. 3 is relating to deletion of disallowance made on account of ATM machine charges. 7.1. Heard both and perused the material available on record. We find that the CIT(A) followed the order of this Tribunal in assessee's own case for AY 2011-12 vide order dated 21.11.2016. The relevant portion in order of CIT(A) is reproduced hereunder: Decision ....
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.... order: "l0. The last issue to be decided in this appeal is as to whether disallowance u/s 14A of the Act read with Rule 8D(2)(ii) of the Rules could be made applicable to the assessee bank in the facts and circumstances of the case. 10.1. The brief facts of this issue is that the assessee bank was in receipt of exempted dividend income of Rs. 3,54,45,760/-. The Learned AO invoked the provisions of section 14A of the Act read with Rule 8D(2)(ii) and (iii) of the Rules and made disallowance of Rs. 13,10,65,100/-/- and Rs. 1,21,01,500/- respectively. On first appeal, the Learned CIT(A) held that the assessee has got sufficient own funds to the extent of Rs. 4532.27 crores as on 31.3.2009 to make investment of Rs. 242.03 crores and hence no part of borrowed funds were utilized for making investments. Accordingly, the provisions of Rule 8D(2Xii) cannot be made applicable and deleted the disallowance u/s 14A to the tune of Rs. 13,10,65,100/-. However, he upheld the disallowance under Rule 8D(2)(iii) of the Rules @ 0.5% of investments amounting to Rs. 1,21,01,500/-. Aggrieved, the revenue is in appeal before us on the following ground:- '4. Whether on the facts and circumstance....
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....otal amount instead of allowing Rs. 86,800/- (1/5th of Rs. 4,34,000/-), as such his finding is completely arbitrary, unjustified and illegal. 3. For that on the facts and in the circumstances of the case the Ld. C.I.T. (A)-17, Kolkata erred in fact as well as in law in dismissing the assessee's ground against addition by the assessing officer Rs. 31,47,73,346/- u/s. 36(1)(viii). The A.O. has changed the allocation basis from asset to turnover basis thereby reducing the deduction u/s 36(1)(viii) by Rs. 31,47,73,346/- which is confirmed by the Ld. CIT(A), as such his finding is completely arbitrary, unjustified and illegal. 4. For that on the facts of the case, the Ld. CIT(A) was wrong in sustaining the addition Rs. 42,000/- under Rule 8D(2)(iii) which is completely arbitrary, unjustified and illegal." 10. We have heard the arguments of both the sides and also perused the relevant material available on record. As regards ground no. 1 of the assessee's cross-objection, it is observed that a similar issue as raised therein relating to the disallowance u/s 40(a)(ia) for non-deposit of TDS was also involved in assessee's own case for the immediately preceding year i.e. A.Y. 2010-11 ....
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....sdictional High Court in the case of Virgin Creations (supra). Ground No. 1 of the assessee's cross-objection is accordingly treated as allowed for statistical purpose. 12. As regards the issue involved in Ground No 2 relating to the disallowance of share issue expenses of Rs. 4,34,000/- the limited relief that the learned counsel for the assessee has sought is for allowing the deduction only to the extent of Rs. 86,800/- being 1/5th of the total share issue expenses u/s 35D of the Act. It is observed that the case of the assessee on this issue is duly supported by the decision of Mumbai Bench of this Tribunal in the case of Indusind Bank Ltd. vs Addl. CIT vide order dated 28.02.2019 passed in ITA No. 3875 & 3876/M/2017 wherein a similar issue was decided by the Tribunal in favour of the assessee vide paragraph no. 17 to 20 of its order which read as under: "17. The issue raised in ground Nos.4, 5 & 6 is against the order of Ld. CIT(A) holding that new claim of deduction under section 35D can be admitted first time which was not raised before the AO at all. 18. The facts in brief are that the assessee has raised the issue of non granting of deduction under section 35D in resp....
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....e order after following the decisions of the Hon'ble Bombay High Court in the case of CIT vs. Pruthvi Brokers and Shareholders Pvt. Ltd. and Grasim Industries Ltd. (supra) wherein the decisions of the Hon'ble Supreme Court in the case of Goetz India Ltd. has been considered and it was held that the fresh issue can be admitted before the appellate authority. We, therefore, do not find any infirmity in the order of the Ld. CIT(A) and accordingly the same is upheld. We also note that the similar issue has been decided by the co-ordinate bench of the Tribunal in DCIT vs. Deccan Chronicle Holding Ltd. 60 taxmann.com 240 and Transport Corporation of India vs. ACIT in ITA No.117/Hyd/2016. We, therefore, respectfully following the decisions as stated hereinabove uphold the order of the Ld. CIT(A) and the issue raised by the Revenue in ground Nos.4 to 6 is dismissed." 13. Respectfully following the decision of Mumbai Bench of this Tribunal in the case of Indusind Bank Ltd. (supra), we direct the AO to allow the claim of the assessee for share issue expenses to the extent of Rs. 86,800/- u/s 35D of the Act being 15th of the total expenses of Rs. 4,34,000/-. Ground No. 2 of the asses....
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....es by taking into consideration the non-performing assets which did not yield any income. As rightly contended on behalf of the assessee in this regard before the ld. CIT(Appeals) as well as before us, the operating expenses were required to be incurred by the assessee in relation to its total banking business and the non-performing assets definitely formed part of such business. The assessee-Bank was required to manage both performing as well as nonperforming assets and the operating expenses incurred by it thus were attributable to non-performing assets also. It appears that this vital aspect was not appreciated by the authorities below in proper perspective and as righty contended by the ld. Counsel for the assessee, the basis adopted by them for apportioning the operating expenses without proper appreciation of the vital position resulted in a distorted picture. Keeping in view all these facts and circumstances of the case, we are of the view that the cases adopted by the assessee for the apportionment of operating expenses was more fair and reasonable and since the same followed consistency by the assessee in the earlier years was accepted by the revenue till assessment year....