TaxTMI 
TaxTMI 
2026 (7) TMI 340
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....me-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as "CIT(A)"] pertaining to assessment order passed u/s. 143(3) r.w.s. 144B of the Income-tax Act, 1961 [hereinafter referred to as "Act"] dated 20.03.2024 for the Assessment Year [A.Y.] 2022-23. 2. The grounds of appeal are as under:- (i) Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) is justified in deleting the addition of Rs. 5,34,00,85,422/- w.r.t. variation in respect of interest payment on the deposits without appreciating the fact that the assessee has claimed an expenses of Rs. 5,34,00,85,422/- as "Interest paid" and debited the same as interest payment in the P&L A/c, however, not actually paid, but in reality ....
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....4,940/- i.e. there was an increase in the total income by Rs. 11,33,63,995/-, stated to be without considering the submission of the assessee in its proper perspective. 4. Aggrieved, the assessee filed appeal before the first appellate authority who passed order u/s. 250 of the Act in which the appeal has been allowed in favour of the assessee and the additions made in the Intimation was deleted. 5. Ground no.1 pertains to the disallowance of Rs. 5,34,00,85,422/- towards the interest differential so made by CPC and recompute assessee's total income and tax thereon accordingly. Before the ld.CIT(A) it was explained that issue related to treating the interest on the 'Rural Infrastructure Development Fund' held by the assessee on behalf ....
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....ral Development Bank Act, 1981' ("NABARD Act") for providing and regulating credit and other facilities for the promotion and development of agriculture and small scale industries, cottage and village industries, handicrafts and other rural crafts and other allied activities in rural areas with a view to promoting integrated rural development and securing prosperity of rural areas, and for matters connected therewith and incidental thereto. The 'Government of India' carries out various welfare measures for which the GOI and the 'Reserve Bank of India' ("RBI") call upon/ direct NABARD to act as its agent. The 'Rural Infrastructure Development Fund' is one such scheme which was introduced in the Union Budget for the fiscal year 1995-96. The G....
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....Fund' (PODF) as per the directions issued by RBI in this regard. 5.2 It was further contended that the assessee was merely acting as trustee to GOI/ RBI vis-à-vis these funds and hence, the amount credited to these funds by it as per the directions of RBI is not and cannot be treated as its income. Also, the Department of Financial Services (DFS), Ministry of Finance, Government of India vide letter (Ref. No. F. No. 3/9/2013-AC) dated 20 February 2013 addressing to "The Chairman, Central Board of Direct Taxes" had pointed out that the development funds, viz. Watershed Development Fund, Micro Finance Development and Equity Fund, Financial Inclusion Fund, Co-operative Development Fund, Tribunal Development Fund, Farmers Technology T....
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....orward Market Commission. The amount so collected as transferred to "Investors Protection Fund". It was held by the Tribunal that the amount so collected and transferred to investor protection fund got diverted at source and consequently it cannot be assessed as the income of the above said assessee. To conclude, the amounts aggregating to Rs. 534,00,85,422/- debited as interest payments in the P&L a/c not actually paid but credited to FIF, TDF, WDF and PODF and disallowed as business expenditure were deleted by the ld.CIT(A). 6. As is evident from the above discussion, the issue in hand is squarely covered in favour of the assessee by ITAT orders(supra) in its own case in previous assessment years as mentioned above. The ld.CIT(A) has d....
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....essee's appeal vide order dated 24 August 2022 had held the said ground against us since we were not notified u/s. 36(1)(xii) in Assessment Year 2010-11. However, the assessee bank has been notified for the promotional activities u/s 36(1)(xii) of the Act vide CBDT notification No. 25/2014 dated 29th April 2014 from Assessment 2013-14 onwards. 8. The ld.CIT(A) observed that the AO noted that assessee had claimed Rs. 111,87,79,126/- as expenditure for promotional activities and added the same to income on the ground that though claimed as permissible under section 36(1)(xii), by NABARD, as per section 36(1)(xii), the allowability of expenditure was restricted to the notified entities and NABARD was not notified for said purpose. In appeal....