AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (1) TMI 1600
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....he case of Bank of Tokyo Ltd. (71 Taxman 85). 2. The learned CIT(A) erred in confirming the disallowance of Rs. 10,13,45,532 in respect of depreciation on securities which had fallen due for redemption during year ended 31 March 1999 but redemption proceeds were not received. 3. The learned CIT(A) erred in confirming the disallowance of Rs. 38,89,011/- in respect of payments for scientific research. 4. The learned CIT(A) erred in upholding the action of the Assessing Officer in disallowing expenditure of Rs. 4,48,16,70,145 by applying the provisions of section 14A read with rule 8D. The learned CIT(A) erred in not appreciating that the appellant has not specifically borrowed any funds for making investment in tax-free bonds, the appellant has sufficient own funds to make investment in tax-free bonds and that only the actual expenditure could be considered for disallowance and not the notional expenditure. The learned CIT(A) erred in not appreciating that the Bank's investment in securities yields two streams of income viz. business income which is taxable and dividend income which is exempt and accordingly the expenditure (if any) to be disallowed can be only in relat....
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....ourt in the case of Vijaya Bank Limited (323 ITR 166). It is submitted that necessary directions may be given to the Assessing Officer to allow the claim of write-off bad debts. 2. The appellant submits that the recovery of bad debts written off should not be liable to tax under section 41 (4) as the appellant had not claimed a deduction under section 36(1)(vii), as held by the Bangalore Tribunal in the case of State Bank of Mysore (ITA No. 647/Bang 2008). It is submitted that necessary directions may be given to the Assessing Officer to not tax the recovery of bad debts where deduction under section 36(1)(vii) has not been claimed. 3. The appellant submits that the income earned by the foreign branches of the appellant should not be liable to tax in India in terms of the relevant tax treaties in light of various judicial pronouncements. It is submitted that necessary directions may be given to the Assessing Officer to not tax income of foreign branches based in countries with which India has a tax treaty. 4. Each of the above grounds of appeal is without prejudice to the other. 2. In ITA No. 4598/Mum/2010, the Revenue has raised the following grounds of appeal: On the....
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..... 860,81,77,400/-. The assessment was completed under section 143(3) on 04.02.2002. The Assessing Officer (AO) while completing assessment made a number of additions/disallowances as per para-18 of the assessment order. On appeal before the ld. Commissioner of Income Tax (Appeals) [(CIT(A)], the assessee was granted partial relief on certain additions/disallowances in the impugned order. Being aggrieved by the order of ld. CIT(A), the assessee as well as revenue both have filed their cross appeal raising various grounds of appeal as referred in para-1 and 2 above. 4. We have heard the ld. Authorized Representative of assessee and ld. Departmental Representative (DR) for the Revenue and perused the orders of authorities below and the various decisions relied by ld. representatives. First we are taking appeal filed by assessee in ITA No. 4736/Mum/2010. 5. Ground No.1 relates to Deferred Payment Guarantee Commission of Rs. 7,98,63,710/-. The ld. AR of the assessee argued that this ground of appeal is covered in favour of assessee in assessee's own case for AY 184-85 to 1989-90 and 1996-97. The copies of the decision are filed in legal Paper Book placed on record. After going through....
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.... find that undisputedly the assessee is a banking company. The assessee is following the mercantile system of accounting and therefrom, income is eligible to tax upon accrual. The system of accounting followed by the assessee is bona fide. The assessee receives the commission for the entire period of the debt repayment that it guarantees at the time when the guarantee agreement is entered into. The assessee had consistently followed the books of account deferred guarantee commission receivable in respect of future periods, should not be taxed in the year. In other words, when the commission related to a period beyond the previous year, the proportionate commission was deferred and shown as income in the year to which it related. The guarantee related to more than 12 months and/pr the guarantee period extended beyond the period covered by the previous year relevant to the Assessment Year. Refund of upto 50% of guarantee commissioner for the unexpired period to valued clients may be permitted by the assessee's officials on receiving back the discharged guarantee bond in those cases also where the purpose for which the guarantee was issued has been fulfilled in a shorter period. Thus,....
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....ave gone through the orders of authorities below. We have noted that similar ground of appeal has been dismissed by the Tribunal in assessee's own case, with the following order: 38. Additional Ground No. 2 is regarding depreciation on matured securities. The assessee has claimed a sum of Rs. 2,23,86,418/- towards depreciation of investments. The AO disallowed the claim of the assessee and the CIT(A) has confirmed the action of the AO. We have heard the Ld. AR as well as Ld. DR and considered the relevant material on record. The CIT(A) has decided the issue in para 9 as under: "9. The ninth effective ground of appeal is against the disallowance of Rs. 2,23,86,418/- being the provision for diminution in the value of securities which had matured and become due for redemption during the year but were not redeemed. It was contended before the A.O. that in some cases, the companies or the State Governments who had issued the relevant securities were not able to pay the amount due on redemption. The appellant treats these securities as non- performing assets and a provision is made at a certain percentage for diminution in their value as in the case of other non-performing assets. T....
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.... the issue is covered against the assessee by the decision of the Tribunal in its own case for assessment year 1996-97 (para 38 & 39) in ITA No.5470/M/2002 which reads as under :- "38. Additional Ground No. 4 is regarding depreciation on matured securities. The assessee has claimed a sum of Rs. 2,23,86,418/- towards depreciation of investments. The AO disallowed the claim of the assessee and the CIT(A) has confirmed the action of the AO. We have heard the Ld. AR as well as Ld. DR and considered the relevant material on record. The CIT(A) has decided the issue in para 9 as under: "9.The ninth effective ground of appeal is against the disallowance of Rs. 2,23,86,418/- being the provision for diminution in the value of securities which had matured and become due for redemption during the year but were not redeemed. It was contended before the A.O. that in some cases, the companies or the State Governments who had issued the relevant securities were not able to pay the amount due on redemption. The appellant treats these securities as nonperforming assets and a provision is made at a certain percentage for diminution in their value as in the case of other non-performing assets. T....
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....ecided against the assessee. 10. Thus, respectfully following the decision of Tribunal in assessee's own case for AY 1996-97, 1997-98 & 1998-99 in ITAs No. 5470/Mum/2002 and ITA No. 3823-3824/Mum/2002, this ground of appeal is dismissed. 11. Ground No. 3 relates to Disallowance of Rs. 38,89,011/- in respect of payments for Scientific Research. The ld. AR of the assessee conceded that this ground of appeal is covered against the assessee in assessee's own case for AY 1997-98 & 1998-99. On going through the decision of Tribunal, the ld. DR for the Revenue submits that this ground of appeal may be dismissed. 12. We have considered the submission of the ld. representative and have gone through the orders of authorities below. We have noted that the similar ground of appeal was decided against the assessee by the Tribunal in assessee's own case for AY 1997-98 and 1998-99 in ITA No. 3823 3824/Mum/2005 dated 29.04.2016 with the following order: 3. Third Ground is about disallowance of Rs. 26,44,876/- in respect of payment for scientific research. During the assessment proceedings, the AO found that payment of Rs. 26,44,876/- had been made out of a fund established by the assessee fo....
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....emicals Ltd. (Tax Appeal No. 82 of 2013(Gujarat HC), UTI Bank Ltd. (32 taxmann.com 370) (Guj HC). It was further argued that Rule 8D is not applicable for AY 1999-2000. On this submission the ld. AR of the assessee relied upon the decision of Hon'ble Bombay High Court in Godrej Boyce Manufacturing Company Ltd. vs. DCIT (2010) 328 ITR 81. The ld. AR of the assessee further argued that no disallowance under section 14A is warranted, if investments are held as stock-in-trade. In support of his submission, the ld. AR relied upon the decision of CIT vs. India Advantage Securities Ltd. (2016 380 ITR 471) (Bombay High Court), State Bank of Patiala (78 taxmann.com 3) (Punjab and Haryana High Court), CCI Ltd. vs. JCIT (2012 206 taxman 563) (Karnataka High Court), Oasis Securities Ltd. vs. DCIT (59 SOT 302) (Mumbai Tribunal), Ganjam Trading Co. Pvt. Ld. vs. DCIT (ITA No. 3724/Mum/2005 and others) (Mumbai Tribunal), State Bank of Hyderabad (63 taxmann.com (Hyderabad ITAT) & Gulshan Investment Co. Ltd. (ITA No. 666/Kol/2012). In alternative submission, it was submitted that the assessee made investment in subsidiary and investment is strategic investment in support of his submission, the ld. A....
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....ers of authorities below. At the time of hearing, the ld. representative for the assessee pointed out that earlier AYs 1997-98 & 1998-99 vide its order dated 29.04.2016 (supra), the issue relating to the disallowance under section 14A of the Act was remanded back by the Tribunal to the file of AO. He conceded that the circumstances which prevailed with the Tribunal to remand the matter with the file of AO continued to prevail in this year too. It is pointed out that when the impugned assessment was finalized, the jurisprudence on the implication of section 14A was not developed but by the time, the matter travelled to the Tribunal, law had considerably developed on the subject. By noticing this, the Tribunal restored the matter back to the file of AO for fresh adjudication so that the benefit of the later developed law could be available to the AO. So, however, it is pointed out that in the order giving effect to the directions of the ITAT for AY 1997-98, the AO vide order dated 27.03.2017 had cryptically disposed of the matter. For the said purpose our attention was drawn to paragraph-6 of the order of AO which merely says that he agrees "with the contentions raised in the earlier....
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....given to Konkan Railway Corporation Ltd. The assessee has entered into an agreement dated 30.3.1996 with Konkan Railway Corporation Ltd. for leasing transaction with respect to the asset of Rs. 25,00,00,000/-. The assets have been categorised as plant and machinery in the shape of Railway Tracks comprising of rails, sleepers and associated fitting. The assessee claimed depreciation on these assets at the rate of 12.5% as used for less than 180 days. The assets in question were originally acquired by Konkan Railway Corporation Ltd. and thereafter to arrange the funds the same were sold to the assessee Bank and taken back on lease for a period of 84 months against the lease rental payable at monthly instalment. The Assessing Officer held that the transaction is in the nature of loan or financial assistance provided to the Konkan Railway Corporation Ltd. (KRCL) by the assessee Bank. The transaction has been given the shape of lease transaction only in order to enable the bank to claim depreciation and reduce its taxable income. Accordingly, the AO held that the sale and lease back transaction is in the nature of financial transaction, therefore, the claim of depreciation was disallowe....
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.... is the very basis of the existence of the KRCL. Thus, we have not doubt that the sale transaction in question is merely on paper and to facilitate the financial arrangement by the assessee to the KRCL without involving any real intention of transfer of the asset in question. Even otherwise the transfer of asset in question is impossible in the facts and circumstances of the case and therefore it was not the real intention of the parties even reflected from the lease agreement. Some of the relevant clauses of the agreement are as under: "1.5 The Acquisition Cost of the equipment shall be the Invoice Value of the Equipment inclusive of levies on important of the Equipment, Customs Duty, Central Excise Duty, Sales Tax, Additional Tax, Surcharge on Sales Tax, Interest Tax, where applicable, Turnover Tax, where payable and all other costs and expenses, as the case may be such as Freight, Octroi, Entry Tax, Erection and Installation \Charges, Commissioning Charges, Testing Charges paid or payable in respect of the Equipment or value assessed by the valuers as per clause 2.2. Below whichever is lower. In case the Lessee proposes to avail MODVAT on the specified Excise Duty paid in ter....
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....Equipment shall be capable of being removed without material injury to the said land or building and that all such steps shall be taken as are necessary to prevent title to the Equipment from passion to the Owner/Lessor/Occupier of the said land or building: 8.2 Keep the Equipment at all times in the possession and control of the Lessee at the Lessee's Factory or Premises as indicated in the Proposal and at the address as specified in Part II of the First Schedule hereto and not remove the same from the place so specified where it is installed without the consent in writing of the Lessor: 8.3 notify the Lessor of any change in the Lessee's address and upon request by the Lessor promptly inform the Lessor of the whereabouts of the Equipment: 8.4 not do or omit to do any act which may result in seizure and/or confiscation of the Equipment by the Central or State Government or Local Authority or any Public Officer or Authority under any law for the time being in force: 8.5 not sell, assign, sub-let, pledge, mortgage, charge, encumber, or part with possession of or otherwise deal with the Equipment or any interest therein nor create or allow to be created any lien on the Eq....
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....h financial year of the Lessor provide to the Lessor such information as it may require to claim relief by way of any deduction allowance or grant as the owner of the Equipment under the Income Tax Act, 1961 and the Lessee undertakes to comply with and observe at all times all the terms and conditions to be complied with or observed in respect of the use and operation of the Equipment so as to entitle the Lessor to obtain such relief. 8.9 The Lessee irrevocably agrees that if due to incremental taxes whether on account of the impact of the sales tax legislation in the various States as applicable or on account of customs duty or excise duties or any other related and consequential taxes or charges levied or leviable on this transaction now or hereafter as also due to any increase in the purchase price of the Equipment covered by this Agreement on account of purchase tax and/or any other tax or imposition or due to tax on the right to use goods as may be applicable to the Equipment the Acquisition Cost of the Equipment stands increased, then the Lessor reserves the right to increase the Lease rentals proportionate thereto and on such notification by the Lessor to the Lessee, the ....
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....hall be entitled to retake possession of the Equipment and may for that purpose enter upon any land or building Lessor or its employees or agents to be situated and if the Equipment or any part thereof is affixed to such land or buildings, the Lessor or its employees or agents shall be entitled to server the same therefrom and to remove the Equipment or part thereof so severed and the Lessee hereby agrees that it shall not hold the lessor for any damage done responsible for and to make good at its expense all damage caused to the land or buildings by such removal. 15. Sale of Equipment on termination of the Agreement: Upon the termination of this Agreement unless the Lessee has elected to renew the lease for a further fixed period or secondary period the Lessor shall as the absolute owner of the Equipment be at liberty to sell any or all of the Equipment at a public or private sale or otherwise dispose of, hold, use, operates, lease to others or keep idle such Equipment, all free and clear of any rights of the lessee and without any duty to account to the Lessee for such action or inaction or with respect to any proceeds thereto and if such Equipment is sold the price obtaine....
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....st. Some of the terms of the agreement appear to be only for sake of the conditions as to protect to the interest of the bank but the same could not be given effect in practical. For instance, in case of default if the assessee terminates the lease agreement in question then it is not possible for the assessee either to take the possession of the asset in question because of the nature of asset which could not be separated from the railway network or remove the asset from the place of its existence being part of the railway network. Further apart from the lessee the asset cannot be transferred or assigned to anybody else as it is not possible to use only a particular stretch of railway track without connecting or being a part of the entire network. Thus, the terms and conditions as heavily relied upon Ld. AR would not help the case of the assessee to establish that the asset in question could actually be taken in possession by the assessee. Therefore, the assessee cannot exercise the real and actual ownership over the asset keeping in view the facts and circumstances and nature of the asset in question. The Special Bench of this Tribunal in case of IndusInd Bank Ltd. (supra) by fol....
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....an operating lease, the asset is ordinarily common use utility whereas in case of finance lease the asset is normally selected by the lessee himself so as to suit his particular requirements h. Normally an operating lease is non payout whereas a finance lease is full payout. Full payout lease means that the lessor recovers the full value of the leased asset plus the finance cost over the period of first lease. Full payout lease is peculiar to finance lease. On the other hand, a non payout lease is one where the lessor is not interested in recovering his principal investment plus interest from one lessee only because he may lease out the same asset over and over again. Though no single lease recovers the principal amount plus interest component of the lessor but all the leases taken together make it a full payout. That is why the non payout lease is peculiar to operating lease." 22. The Special Bench then analysed the various factors of distinction between operating lease and finance lease in para 5.21-5.23 as under: "5.21 From the above points of distinction between operating lease and finance lease, the salient features of operating lease have become glaring. Now let us a....
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....with the lessee. When we consider the cumulative effect of all the factors for and against the operating lease, it can be easily found out that if one has to choose between the finance lease and operating lease, there can be no difficulty in reaching the irresistible conclusion that it is a case of finance lease agreement. In pith and substance this agreement is nothing but a finance lease." 23. In the case in hand the lease is for fix period of 84 months during which the assessee would recover the full value of lease asset with finance cost being interest as agreed between the parties. All the costs regarding loss and obsolences, repairs, maintenance, insurance etc. are to be born by the lessee. Thus the risk and reward of ownership of the asset vested with the lessee and therefore for all practical purposes the ownership of the asset was vested with the lessee and not with the assessee. The terms of the agreement are designed in a manner so that in any eventuality the assessee would recover the investment (cost of asset) with interest and not the asset in question. As discussed in the foregoing paras the title over the asset as per the lease agreement is only for securing the ....
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....xcluding the business of a 1[managing agent or secretary and treasurer] of a company; (c) contracting for public and private loans and negotiating and issuing the same; (d) the effecting, insuring, guaranteeing, underwriting, participating in managing and carrying out of any issue, public or private, of State, municipal or other loans or of shares, stock, debentures, or debenture stock of any company, corporation or association and the lending of money for the purpose of any such issue; (e) carrying on and transacting every kind of guarantee and indemnity business; (f) managing, selling and realising any property which may come into the possession of the company in satisfaction or part satisfaction of any of its claims; (g) acquiring and holding and generally dealing with any property or any right, title or interest in any such property which may form the security or part of the security for any loans or advances or which may be connected with any such security; (h) undertaking and executing trusts; (i) undertaking the administration of estates as executor, trustee or otherwise; (j) establishing and supporting or aiding in the establishment and support of as....
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....eads as under: "(ii) These activities should be treated on par with loans and advances and should accordingly be given risk weight of 100 per cent for calculation of capital to risk asset ratio. Further, the extant guidelines on income recognition, asset classification, asset classification and provisioning would also be applicable to them." Paras 1(v) and (vi) which are also relevant read as under:- "(v) Banks undertaking equipment leasing departmentally should follow prudential accounting standards. The entire lease rental should not be taken to the bank's income account. it would be recognized that lease rentals comprise two elements a finance charge (i.e. interest charge) and a charge towards recovery of the cost of the asset. The interest component alone should be taken to the income account. The component representing the replacement cost of the asset should be carried to the balance sheet in the form of a provision for depreciation. (vi) As a prudent measure, full depreciation should be provided for during the primary lease period of the asset. The period of lease should not normally exceed five years. In exceptional cases, lease period not exceeding 7 years may ....
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....n of para 1(v) of the afore noted RBI ITA No. 5470/M/2002 State Bank of India . 36 Circular. When the Assessing Officer concluded that the instant lease cannot be characterized as finance lease, the assessee requested the A.O. that in case the depreciation on the leased asset to assessee is not to be granted by treating it as a loan transaction, then the capital recovery embedded in the lease rental should not be charged to tax. This issue has been discussed in para 2.30 of the assessment order. Acceding to the assessee's request, the Assessing Officer excluded the portion of capital recoveries from the rental income. Thus it can be observed that the action of the A.O. is fully in consonance with the RBI Circular which states that in case of equipment leasing the entire lease rental should not be treated as bank's income but only that component of such lease rental which represents finance charges i.e. interest should be recognized as income alone. 5.27 We, therefore, approve the view taken by the authorities below in coming to the conclusion that the lease agreement under consideration is that of finance lease and not operating lease." 26. As it is clear from the circular th....
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....d that the transaction in question is finance lease and not operating lease. Accordingly, we uphold the orders of the authorities below qua this issue." Respectfully, following the above order of the Tribunal Ground No.6 is decided against the assessee. 18. Thus, respectfully following the order of co-ordinate bench on similar ground in earlier years in assessee's own case this ground of appeal is dismissed. 19. Ground No.6 relates to unearned interest on doubtful advances as per section 43D not allowed as a deduction. The ld. AR of the assessee argued that similar ground of appeal was restored back by the Tribunal to the file of AO assessee's own case for AY 1997-98 in its order dated 29.04.2016. The ld. DR for the Revenue expressed his no objection, if, this ground of appeal is also restored back to the file of AO to decide the same in accordance with the direction of Tribunal in order dated 29.04.2016 in appeal for AY1997-98. 20. We have considered the submission of the parties and perused the orders of authorities below. We have noted that similar ground of appeal was restored back to the file of AO by the Tribunal with the following direction: 7. Ground No.7 deals wit....
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....n with the issue of RIBs. The AO noted that a sum of Rs. 32,49,40,434/- was incurred on law charges, Advertisement and Commission by way of payment to non-residents. These expenditures related to the services offered by the recipients being collecting banks in the nature of brokerage, commission, etc. As per the AO, tax was required to be deducted at source on such payments. Out of the total payment of Rs. 32,49,40,434/- to the non-residents, an amount of Rs. 7,28,58,994/- representing commission paid to foreign branches of India Banks was reduced and the balance of Rs. 25,20,81,440/- was disallowed under section 40(a)(i) of the Act for not having deducted tax at source. The claim of the assessee before the lower authorities as well as before us is to the effect that the payments are made to the non-residents for services rendered abroad and therefore, no amount is taxable in India and therefore, there was no need to deduct any tax at source. The ld. CIT(A) has also affirmed the action of the AO against which the assessee is in appeal before us. 23. Before us, the representative for the assessee pointed out that the lower authorities have wrongly treated the payments in the nature....
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.... parties and perused the orders of authorities below. We have seen the order of tribunal for AY 1997-98 & 1998-99 in ITA No. 3823 & 3824/Mum/2005 dated 29.04.2016 wherein similar ground of appeal was allowed by the Tribunal holding as under: 9. Last Ground deals with disallowance of contribution to SBI Retired Employees Medical Fund. During the year under consideration the assessee had contributed Rs. 20 crores towards the fund. The AO found that the assessee had in the return of income mentioned that it was a welfare measure and should be allowed as a deduction from the computation of total income even though the assessee itself had added back the sum to its income for the year under consideration. The AO did not allow the claim made by the assessee. 9.1. Before the FAA, it was stated that the bank had been contribution every year certain amt out of its tax profits, towards contribution to SBI Employees medical Fund. The FAA held that as per the provisions of Section 40A(9) of the Act no deduction was allowable in respect of any sum paid by the assessee as an employer towards setting up or formation of or as contribution to any fund trust except where such sum was paid for the....
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....sessee's own case for AY 1997-98 & 1998-99 in ITA No. 3823 & 3824/Mum/2005 dated 29.04.2016 and respectfully following the same this ground of appeal is allowed. 28. Ground No.9 relates to entire provision for bad and doubtful debts to be allowed u/s. 36(1)(viia) of Rs. 1441,42,98,921/-. The ld. AR of the assessee argued that this ground of appeal is also covered in assessee's own case as the similar ground of appeal was dismissed by the Tribunal in assessee's own case in AY 1996-97 vide ITA No.5470/Mum/2002 dated 26.07.2013 and again in AY 1997-98 & 1998-99 in ITA No. 3823 & 3824/Mum/2005 dated 29.04.2016. It was further submitted that in the appeal before Hon'ble Bombay High Court, the order of Tribunal for AY 1996-97 has been confirmed in ITA No. 2721 of 2014 dated 23.08.2016. The ld. DR submits that this ground of appeal is liable to be dismissed as the High Court has already dismissed the appeal of assessee for AY 1996 97. 29. We have considered the submission of the parties and gone through the orders of authorities below. We find that similar ground of appeal was dismissed by the Tribunal in assessee's own case for AY 1996-97 vide ITA No. 5470/M/2002 dated 26.07.2013. Furt....
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....ention of the provision of section 36(1)(viia). It is pertinent to note that when the claim of deduction specifically provided u/s 36(1)(viia) then the same cannot be allowed by applying any other provision. Accordingly, we do not find any merit or substance in the claim of the assessee. Hence dismissed." Respectfully following the above order of the tribunal, we decide Ground No.8 against the assessee . 30. Thus, considering the decision of Tribunal in assessee's own case wherein similar ground of appeal has been dismissed and the order of Tribunal for AY 1996-97 has been affirmed by the jurisdictional High Court, hence, we do not find any merit in the ground of appeal raised by assessee and the same is dismissed. 31. Ground No.10 relates to disallowance of provision in respect of foreign offices. The ld. AR of the assessee argued that similar ground of appeal was restored back by the Tribunal to the file of AO in assessee's own case for AY 1998-99 in its order dated 29.04.2016. The ld. DR for the Revenue expressed his no objection, if, this ground of appeal is also restored back to the file of AO to decide the same in accordance with the direction of Tribunal in order dated ....
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....itional grounds of appeal, provided all three additional grounds of appeal are restored back to the file of AO for examining the issues afresh. 35. We have considered the rival submission of the parties and have gone through the orders of Tribunal in M.A. No. 371/M/2013 wherein similar grounds of appeal was restored back to the file of AO with the following order: 3. On the other hand Ld. DR has submitted that there is no apparent error in the impugned order of the Tribunal regarding the additional grounds raised by the assessee which were remitted to the record of the AO for examination and adjudication as per law. 4. Having considered the rival submissions and careful perusal of the records, we note that the assessee has advanced arguments in respect of additional grounds no. 1- 3 which reads as under:- Sl. No. Additional Grounds of Appeal Remarks 1 Write-off of bad debts u/s 36 (1) (vii) Covered by the decision of the Supreme Court in the case of Vijaya Bank Vs. CIT (2010) 323 ITR 166 2 Recovery of bad-debts written off should not be liable to tax u/s 41(4) Covered by the decision of the Bangalore Tribunal in the case of State Bank of India Mysore Vs. DCIT (20....
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....o decide the same in accordance with law by following the order dated 30.01.2014 passed by Tribunal in M. A. No. 371/M/2013. 37. In the result the appeal of the assessee is partly allowed. ITA No. 4598/Mum/ 2010 appeal by Revenue 38. Ground No.1 relates to deleting the addition on account of Staff Welfare expenses of Rs. 58.15 lakhs. The ld. DR for the revenue supported the order of the assessing officer. On the other hand the ld R for the assessee argued that this ground of the appeal is covered in favour of the assessee by the decision of the Tribunal in assessee's own case for AY 1992-93 in ITA No.3400/M/1999 dated 19.05.2008, for AY 1995-96 in ITA No. 3403/M/1999 dated 19.09.2009 and for AY 1996-97 in ITA No 5470/M/2002 dated 26.07.2013. 39. We have considered the rival submission of the parties and have gone through the orders of Tribunal in assessee's own case for AY 1992-93 in ITA No.3400/M/1999 dated 19.05.2008, for AY 1995-96 in ITA No. 3403/M/1999 dated 19.09.2009 and for AY 1996-97 in ITA No 5470/M/2002 dated 26.07.2013 for AY 1992-93 in ITA No. 3400/M/1999 the coordinate bench of the Tribunal passed the following order. "30. The next issue is regarding deduction ....
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....he compilation. Nuclear Power Corporation of India Ltd (ITA No. 336/Mum/1999 (page 29 to 32 of compilation. The ld counsel also placed reliance on the following judicial decision in this regard. Shri Venkatsatyanarayana Rice Mills vs CIT [223 ITR 101](SC) CIT versus Indian radiators Ltd 436 ITR 719 Madras CIT versus Emiici Engineering Ltd 242 ITR 86 CIT versus Travancore Cochin chemicals Ltd 243 ITR 284 33. The ld DR on the other hand, contended that this facility was restricted to only officers and not employees, hence, it was arbitrary and unreasonable, hence, assessee being a government owned bank falling within the definition as per Article 12 of the Constitution of India could not do so and, therefore, expenditure was correctly disallowed by the revenue authorities. 34. We have considered the submissions made by both the sides, material on record and orders of authorities below. We find that the Tribunal in earlier assessment years 1987-88 rejected the claim of the assessee for want of details whereas in the present case the assessee has submitted these details, hence, this decision of the tribunal in that year is not applicable. We find that both the r....
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....such GDR funds were utilized in normal course of business for advancing and investment, having interest element. As such exchange gain, as accepted by the appellant, in Note No.11 of the computation of income, has profit through exchange gain on inward remittance and is definitely revenue in nature. This arguments gets support from the proposition of the case of CIT versus Vs V.S. Dempo & Co (P) Ltd [1994] 72 taxman 134(Bom). On the other hand ld. AR of the assessee supported the order of CIT(A) and contended that in Note No. 11 to the return of income the assessee has explained the facts. The ld AR of the assessee argued that the gain has not occurred in the normal course of assessee's business. The GDR issue was in the nature of foreign currency held on capital account, accordingly, the profit through exchange gain on inward remittance is capital in nature. The ld AR for the assessee relied upon the decision in CIT Versus Canara Bank (63 ITR 328)(SC), Sutlej Cotton Mills Ltd versus CIT (166 ITR 108), Laurids Knudsen Maskinfabrik Ltd Vs ITO (77 ITD 212), SSI Ltd Vs DCIT (85 TTJ 1049), CIT Vs Telco Ltd (60 ITR 405) (SC), Homi Mehta & Sons Pvt Ltd Vs CIT (222ITR 528) (Bom) and EID P....
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....the rival submission of the parties and gone through the orders of authorities below. We have also perused the order of Tribunal in earlier assessment years. We have noted that the coordinate benches of Tribunal in appeal for AY 1996-97 in ITA NO. 5470/M/2002, while following the order of earlier year passed the following order: 31. Ground No. 10 is regarding interest on securities due to difference between accrual and due method. We have heard the Ld. AR as well as Ld. DR and considered the relevant material on record. We note that an identical issue has been considered and decided by this Tribunal in assessee's own case for the assessment year 1991-92. Further for the assessment year 1995-96 again the Tribunal has considered and decided this issue in para 16 & 17 as under: "16. As regards ground No. 8 relating to the addition of Rs. 2,45,42,24,967/- made by the A.O. and confirmed by the ld. CIT(A) on account of interest on securities holding the same to be taxable on accrual basis instead of due basis, it is observed that this issue is squarely covered in favour of the assessee by the decision of the Tribunal in assessee's own case for earlier years vide its order da....
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....income tax return on the real taxable income in accordance with a method of accounting adopted by the assessee consistently and regularly. For the purpose on income tax, what is to be taxed is the real income and in assessing the real income, the assessee cannot be bound by the manner in which its balance sheet is prepared under a particular statute. Thus, merely because in the balance sheet or the profit & loss account, the assessee bank before us has taken credit for the interest on Govt. securities on day today basis, it cannot be prevented from urging in the return that such interest accrues not on day to day basis but only on the specified coupon dates and that this is the correct legal position on the basis of which its income should be computed. Therefore, we reject the contention of the ld. (D.R.). For the above reasons, we accept the assessee's claim and hold that the interest on Govt. securities cannot be assessed "de die in diem". We direct the A.O. to assess the interest on the basis of the coupon dates. Ground No. 2 is allowed." Similarly, the Tribunal in the case of Housing Development and Finance Corporation (supra), following the aforesaid decision of the ....