2021 (7) TMI 594

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s been filed by the revenue against the order dated 29.02.2016 passed by the Income Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal' for short). The subject matter of the appeal pertains to Assessment Year 2007-08. The appeal was admitted by a Bench of this Court on the following substantial question of law: "Whether, on the facts and in circumstances of the case, the Tribunal is right in law in directing the assessing authority to allow the amount expended on the funds of Rs. 10,86,43,785/- as deduction while computing income of the assessee co-operative bank even when said expenditure do not come under section 37(1) of the I.A. Act and that the purported expenditure is only application of income and that ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Tax (Appeals). The assessee thereupon filed an appeal before the Tribunal. The Tribunal, by an order dated 29.02.2016, has partly allowed the appeal and has granted relief to the assessee in respect of payment of TACS / DCCB fund. In the aforesaid factual background, this appeal has been filed. 4. Learned counsel for the revenue submitted that appropriation made from the net profits by the assessee cannot be allowed as expenditure under Section 37 of the Act and purported expenditure is only application of income and there is no diversion of income by overriding title. It ought to have been appreciated by the tribunal that though the payments made by the assessee may be authorized under the bye-laws, some of the payments made were a sta....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....T.A.No.275/2015 dated 01.03.2021 in respect of Primary Agricultural Cooperative Societies (PAC) and District Central Co-operative Bank (DCCB) fund and therefore, the issue is covered in favour of the assessee. In support of aforesaid submissions, reliance has been placed on decisions in 'KARNTAKA STATE CO-OPERATIVE APEX BANK LTD. VS. DCIT IN ITA NO.275 OF 2015 DATED 01.03.2021 (KAR.), 'MYSORE KIRLOSKAR LTD. VS. CIT', (1987) 166 ITR 836 (KARNATAKA), 'SASSOON J. DAVID AND CO.P. LTD. VS. CIT', (1979) 118 ITR 261, 'CIT VS. KIRLOSKAR OIL ENGINES LTD.', (1986) 157 ITR 762 (BOM.) 6. We have considered the submissions made by learned counsel for the parties and have perused the record. The solitary issue, which arises....