TaxTMI 
TaxTMI 
2021 (9) TMI 438
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....ase was originally completed u/s. 143(3) vide order dated 04.11.2016. Subsequently, the assessment records were examined and a show cause dated 07.02.2019 u/s. 263 of the Act was issued by the ld. Pr. CIT stating that assessee has incorrectly debited a sum of Rs. 35,93,215/- in its profit and loss account on account of PAC Development Fund under the head 'Other expenses' which is not an actual expenditure towards business activities and thus not allowable in the hands of the assessee. In response, the assessee filed its submissions which were considered but not found acceptable and the order passed by the Assessing Officer was considered as erroneous in so far as it is prejudicial to the interest of the Revenue and the same was set ....
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....ned at two levels at DCCB Level and at RSCB Level. The fund will be established crediting the amount received as stipulated contribution from RSCB/CCB/Other co-operative institutions as per details given below. It was submitted that as regard the procedure for utilizing the fund, at DCCB level, a committee of followings persons is constituted to issue sanction and supervise the utilization of fund:- 1. Managing Director of Concerned CCB : Chairperson 2. Chairperson of the concerned society : Member 3. Deputy registrar/assistant registrar : Member 4. Executive officer of DCCB : Member 5. It was submitted that the above committee should meet at least once in a quarter to take decision on all the proposal....
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....he amount credited to the contingencies reserve is not diverted by reason of an overriding obligation or title and determining the business profits of the assessee, it is not a provision for know existing liabilities whereas as discussed above, the PAC development fund is purely an "Ascertained Liability" & "Administration & Utilization Thereof" is not with the assessee and not for the benefit of assessee & thus is an ascertained liability/provision & is thus a business expenditure. Thus when facts are clear, or where another view is possible, the revision u/sec. 263 of Act is not permissible as held in following decisions: * CIT vs. Gokuldas Exports (2011) 333 ITR 214 (Kar.) * CIT vs. G.M. Mittal Stainless Steel (P) Ltd. ....
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....re which has been expended wholly and exclusively for the purpose of the business or profession, is only allowable as deduction under the head 'Profits and gains of business or profession'. In its submission, the assessee bank merely reiterated that the contribution to PACS Development Fund is obligator to the assessee bank. However, the assessee bank has failed to explain that the contribution towards PACS Development Fund is actually an expenditure which has been incurred wholly and exclusively for the purpose of the business or profession. 6.1 Further, in the case of CIT, Jaipur-II Vs M/s. Rajasthan State C-operative Bank Ltd., Jaipur in DBIT Appeal No. 290/2016, the Hon'ble High Court, Jaipur has dismissed the appea....
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....ecords, it is observed that the AO also failed to enquire into the admissibility of the PACS fund. 6.4 Moreover, in the case of M/s. Churu Central Cooperative Bank Ltd. Vs. CIT, Jaipur in DBIT appeal No. 254/2011, the Hon'ble High Court, Jaipur vide its order dated 20.04.2017 answered the issue in favour of department and against the assessee. 7. In view of above discussion, the assessment order passed by the AO is considered erroneous in so far as it is prejudicial to the interest of the Revenue, hence, set aside to the file of the AO to the aforesaid extent for making afresh after carrying out enquiries, if required, and after giving opportunity of being heard to the assessee. " 9. We have heard the rival contenti....
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....'ble Rajasthan High Court has not been accepted by the Revenue and further SLP has been preferred before the Hon'ble Supreme Court cannot be a basis to hold that the order so passed by the Assessing officer allowing such claim is erroneous in nature as such an order passed by the jurisdictional High Court and that too, in assessee's own case is binding on the Assessing officer. The decision in case of M/s. Churu Central Cooperative Bank has been rendered by the Hon'ble Rajasthan High Court on 20.04.2017 and therefore, where the decision in assessee's own case has been rendered subsequently by the Hon'ble Rajasthan High Court on 5.09.2017, the latter decision shall clearly take precedence over the former decision and ....