TaxTMI 
TaxTMI 
2023 (8) TMI 764
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.... of expenses incurred on computerization despite holding that appellant is entitled towards such deduction. 3. Ld. CIT(A) erred in confirming addition of Rs. 27,94,800/- made by AO on account of disallowance of provision for contribution/subscription to District Union arbitrarily holding it to be provision for training fund without appreciating the facts of the case properly and judiciously. The addition of Rs. 27,94,800/- made by AO and confirmed by CIT(A), is illegal, arbitrary and not justified. 4. Ld. CIT(A) erred in remanding the matter pertaining to allowance of depreciation of Rs. 1,14,40,207/- to AO instead of deciding the issue, despite holding that appellant is eligible for allowance of correct depreciation as per rules. The action of Ld. CIT(A) remanding the matter to the AO is illegal, arbitrary and not justified. 5. Ld. CIT(A) erred in remanding the matter pertaining to double disallowance of Rs. 1,52,40,896/- on account of advance tax and TDS to AO, without adjudicating the same on merits. The action of Ld.CIT(A) remanding the matter to the AO is illegal, arbitrary and not justified. 6. Ld. CIT(A) erred in confirming the addition of....
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....herein, the issues were discussed deliberated, and the appeal of the assessee was partly allowed. Even after the order of the Ld.CIT(A), the assessee was aggrieved with certain issues, for which, the assessee has carried the matter under this appeals before us for adjudication. 4. At the outset, the issues raised under the grounds of appeal by the Ld.AR of the assessee are argued by the Ld.AR, which are being taken up and discussed ground wise in the following paras. 5. Ground Nos.1 & 2 regarding confirming the disallowance of Rs. 2 Crs. made on account of computerization of branches of the assessee. On this issue, the Ld.AR submitted that the operations of the assessee's bank were manual which were on computerization and for this purpose, it is necessary to create reserve fund. Therefore, the funds were set apart for the purpose of business. The Ld.AR drew our attention to the order of the Ld.CIT(A) wherein, the Ld.CIT(A) has observed that the addition of Rs. 2 Crs. made by the AO on account of contingent liability, do not constitute expenditure and cannot be subject matter of deduction even under the mercantile system of accounting. Therefore, the addition was confirmed.....
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.... expenditure and cannot be subject matter of deduction, even under the mercantile system of accounting. The observation of Ld.CIT(A) on this issue are worth agreed to. However, depreciation on expenditure actually incurred and capitalized will be allowed in accordance with the provisions of the Act. Therefore, we partly allow this ground of the assessee to reduce the addition made to the extent of eligible depreciation. 6. Ground No.3 is pertaining to addition of Rs. 27,94,800/- on account of disallowance of provision for contribution/subscription to District Union. At the outset, the Ld.AR drew our attention to the observations of the Ld.CIT(A) on this issue, wherein, the Ld.CIT(A) has decided the issue against the assessee for the reasons that the provisions of training fund has been made in compliance of provisions of sec.43A(1A) of Chhattisgarh Co-operative Societies Act, 1960. The Sec.43A of Madhya Pradesh Co-operatives Act, deals with appropriation of profit concerned by the society, and therefore, the amount transferred to training fund is appropriation of profit. It was the observation that the amount transferred to training fund remains with the assessee. The Ld.CIT(....
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....ahakari Sadan, Chaubey Colony, Raipur 19,77,920 Cheque No. 0297 Bank -Self Account No. 2220006044700000 Date- 16.09.2014 -do- -do- -do- 5,37,400 Cheque No. 05527 Bank -Self Account No.2220006044700000 Date -21.03.2016 C.G.Rajya Sahakari Sangh Maryadit (State Union) AABAC 0367 L 16, Park Street 3, Chaubey Colony, Raipur 2,79,480 Cheque No. 72145 Bank -Self Account No. 2220006044700000 Date -31.10.2013 Total 27,94,800 6.1 The Ld.AR relied upon decision of ITAT Indore Bench, Indore, in the case of M/s.Indore Paraspar Shakari Bank v. Dy.CIT in ITA No.331/Ind/2010 for the AY 2007-08, dated 30.05.2011, wherein, the Tribunal has held as under: 14. We found that the AO has applied the provisions of Section 40(ii) Explanation and declined claim of deduction. The said provisions are not applicable to the instant case and it speaks about the tax levied on the profit and gains of business. Since the assessee has made the statutory payments, which it is required to make u/s 43(2B) of M.P. Coop. Societies Act. Since it is statutory payment, the same is allowable as deduction. Agreeing with the ld. Authorized Repr....
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.... years. Hon'ble Supreme Court in the case Radhasoarni Satsang, 193 I.T.R. 321 has held that principle of res judicata does not apply to income tax proceedings. Again, each assessment year being an independent unit, what is decided in one year may not apply in the following year, but where fundamental aspect permeating through the different assessment year has been found as a fact one way or other and parties have allowed, that position to be sustained by not challenging the order, it would not he appropriate to allow the position to be changed in a subsequent year. In the case before us, the AO had allowed the claim of the assessee for last several years. For assessment year 2006-07 is the fist year where Revenue has disallowed the amount on the ground that it is appropriation of income and not business expenditure incurred wholly and exclusively for the purpose of business. Since the AO has allowed deduction in respect of Coop. Education Fund in earlier years, respectfully following the decision of Hon'ble Supreme Court in the case Radhasoami Satsang(supra), it is held that Revenue is not permitted to take a different stand in the year under consideration. Accordingly, we do not f....
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....ore the Ld.CIT(A) who has directed the AO to verify the claim and allow the depreciation in accordance with rules and provisions of the Act. However, it was the grievance of the assessee that the effect is still not given by the AO. Therefore, the issue is again raised before the ITAT. 7.1 The Ld.DR submitted that since the matter is restored back to the file of the AO for verification and allowing the depreciation in accordance with law, there is no infirmity in the order of the Ld.CIT(A). 7.2 We have heard both the parties, perused the materials available on record. Admittedly, there was a mistake on the part of the assessee that the claim of the depreciation was made at a lower amount in the computation of income, which was noticed by the Ld.CIT(A) and has directed the AO to allow the same after due verifications applying the provisions of the Act. Assessee's grievance is that till date, no effect was given by the AO even after the directions of the Ld.CIT(A). Therefore, the issue was raised before us. Since there was no infirmity pointed out in the order of the Ld.CIT(A), we do not find any divergent view on this issue. However, Ld CIT(A), who has co-terminus with that of....
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....double disallowance. Therefore, the assessee is entitled for the relief. However, the figures and facts are subject to verification from the records by the AO. Therefore, we are directing the AO to allow the relief of amount double added to the profit of the assessee and was charged to tax accordingly. Under such circumstances, Ground No.5 of the assessee's appeal is partly allowed for statistical purpose. 9. Ground No.6 regarding addition of Rs. 2,98,14,297/- on account of reserve funds of interest from Apex Bank. The Ld.AR of the assessee submitted that the reserve funds received on account of Apex Bank represents amount of interest from interest made out of reserve funds transferred to reserve funds of the assessee's bank. The Ld.AR further submitted that as per sec.43(2) of Chhattisgarh Co-operative Societies Act, 1960, assessee is required to maintain reserve fund. As per sec.44(2) of Chhattisgarh Cooperative Societies Act, 1960, such reserve funds can be utiliesed/invested only in the manner as may be laid down by the Registrar of Societies. Assessee had invested such funds with Apex Bank according to conditions laid down on this behalf. Further, the interest paid by th....
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....laced reliance on the decision of the Hon'ble Madhya Pradesh High Court in the case of Keshkal Co-operative Marketing Society Ltd. v. CIT reported in [1987] 165 ITR 0437 (MP), wherein, it has been held as under: The reserve fund created under s. 43(2) of the Societies Act is a 'statutory one' and is created at the instance of the Registrar and further after once created the reserve fund, the assessee does not have control over it, as under s. 44(2) of the Societies Act, the reserve fund of the Society shall be invested or utilized only in such a manner and on such terms and conditions as may be laid down by the Registrar in this behalf. Therefore, the creation of the reserve fund and the control the remain with the Registrar and in this respect the assessee, in any manner whatsoever, does the beneficiary of the said reserve fund. This position being the statutory position, is not disputed. The amount does not comprise income of the assessee because the same having been diverted under the provisions of s. 43(2) of the Societies Act and can only be invested or utilized in such manner and on such terms and conditions as may be laid down by the Registrar in this behalf....