The Jammu & Kashmir Bank Ltd., Srinagar V. The Dy. Commissioner of Income-tax, Srinagar (J&K)

CO 33/ASR/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8204 (ITAT-AMRITSAR)
• Duration Of Justice: 1 month(s) 6 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 17-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K GUPTAC A
• Assessee Lawyers: R L CHHANALIA
• Keywords: Depreciation; Business expenditure; Revenue expenditure; Capital expenditure
• Section: 14A; 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.43(ASR)/2012 ASSESSMENT YEAR:2003-04 PAN :AAACT6167G DY.COMMR. OF INCOME TAX, VS. THE JAMMU & KASHMIR BA NK LTD. CIRCLE-3, SRINAGAR. SRINAGAR. (APPELLANT) (RESPONDENT) C.O.NO.04(ASR)/2012 (ARISING OUT OF I.T.A. NO.43(ASR)/2012) ASSESSMENT YEAR:2003-04 PAN :AAACT6167G THE JAMMU & KASHMIR BANK LTD. VS. DY. COMMR. OF INC OME TAX, SRINAGAR. CIRCLE-3, SRINAGAR. (APPELLANT) (RESPONDENT) I.T.A. NO.53(ASR)/2012 ASSESSMENT YEAR:2003-04 PAN :AAACT6167G DY.COMMR. OF INCOME TAX, VS. THE JAMMU & KASHMIR BA NK LTD. CIRCLE-3, SRINAGAR. SRINAGAR. (APPELLANT) (RESPONDENT) I.T.A. NO.85(ASR)/2012 ASSESSMENT YEAR:2003-04 PAN :AAACT6167G DY.COMMR. OF INCOME TAX, VS. THE JAMMU & KASHMIR BA NK LTD. CIRCLE-3, SRINAGAR. SRINAGAR. (APPELLANT) (RESPONDENT) 2 C.O.NO.05(ASR)/2012 (ARISING OUT OF I.T.A. NO.85(ASR)/2012) ASSESSMENT YEAR:2003-04 PAN :AAACT6167G THE JAMMU & KASHMIR BANK LTD. VS. DY. COMMR. OF INC OME TAX, SRINAGAR. CIRCLE-3, SRINAGAR. (APPELLANT) (RESPONDENT) I.T.A. NO.86(ASR)/2012 ASSESSMENT YEAR:2004-05 PAN :AAACT6167G DY.COMMR. OF INCOME TAX, VS. THE JAMMU & KASHMIR BA NK LTD. CIRCLE-3, SRINAGAR. SRINAGAR. (APPELLANT) (RESPONDENT) C.O.NO.06(ASR)/2012 (ARISING OUT OF I.T.A. NO.86(ASR)/2012) ASSESSMENT YEAR:2004-05 PAN :AAACT6167G THE JAMMU & KASHMIR BANK LTD. VS. DY. COMMR. OF INC OME TAX, SRINAGAR. CIRCLE-3, SRINAGAR. (APPELLANT) (RESPONDENT) I.T.A. NO.418(ASR)/2012 ASSESSMENT YEAR:2004-05 PAN :AAACT6167G DY.COMMR. OF INCOME TAX, VS. THE JAMMU & KASHMIR BA NK LTD. CIRCLE-3, SRINAGAR. SRINAGAR. (APPELLANT) (RESPONDENT) C.O.NO.33(ASR)/2012 (ARISING OUT OF I.T.A. NO.418(ASR)/2012) ASSESSMENT YEAR:2004-05 PAN :AAACT6167G 3 THE JAMMU & KASHMIR BANK LTD. VS. DY. COMMR. OF INC OME TAX, SRINAGAR. CIRCLE-3, SRINAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.R.L.CHHANALIA, DR RESPONDENT BY:SH.R.K.GUPTA,CA DATE OF HEARING: 17/01/2013 DATE OF PRONOUNCEMENT:23/01/2013 ORDER PER BENCH ; THESE FIVE APPEALS OF THE REVENUE ARISE FROM DIFFE RENT ORDERS OF CIT(A),JAMMU AS PER DETAILS BELOW. THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS IN THE SAID APPEALS AS PER DETAILS HEREU NDER: SL.NO. ITA/C.O. NO. ARISE FROM THE ORDER DATED ASSTT.YEAR OF CIT(A) 1. 43(ASR)/2012 JAMMU 30.11.2011 2003-04 2. CO.04(ASR)/2012 -DO- -DO- 2003-04 3. 53(ASR)/2012 -DO- -DO- -DO- 4. 85(ASR)/2012 -DO- 16.12.2011 -DO- 5. CO.5(ASR)/12 -DO- -DO- -DO- 6. 86(ASR)/12 -DO- 27.11.2011 2004-05 7. CO.06(ASR)/12 -DO- -DO- -DO- 8. 418(ASR)/2012 -DO- 06.08.2012 -DO- 9. CO.33/ASR/12 -DO- -DO- -DO- 2. IN ITA NO.43(ASR)/2012, THE REVENUE HAS RAISED F OLLOWING GROUNDS OF APPEAL: 4 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN TREATING THE EIGHT RURAL BRANCHES AS ELI GIBLE FOR DEDUCTION U/S 36(1)(VIIA), KEEPING IN VIEW THE RE PORTS OF CENSUS OF INDIA, 1981, SERIES 8 OF J&K. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING 100% DEPRECIATION ON WOODEN PAR TITION AS THEY ARE PERMANENT PARTITIONS AND NOT SUSCEPTIBLE TO DISMANTLING. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING DEPRECIATION OF 60% AS AGAINST THE ADMISSIBLE RATE OF 25% ON UPS & BATTERIES. 4. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DIRECTING THE AO TO RESTRICT THE DISALLO WANCE U/S 14A TO THE EXTENT OF RS.10,45,220/- BY APPLYING THE YARD STICK OF MAKING PRO RATA DISALLOWANCE BASED ON THE COST IN FLATION INDEX. 5. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS UTILI ZED FUNDS AVAILABLE WITH BANK FOR EARNING TAX FREE INCOME A ND THEREFORE, THE AO HAS RIGHTLY WORKED OUT THE DISALLOWANCE OF RS.22.34 CRORES & RS.6.73 CRORES ON ACCOUNT OF PROPORTIONA TE INTEREST & EXPENSES ATTRIBUTABLE TO EARNING IF TAX FREE INCO ME. 6. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT( A) HAS TOTALLY IGNORED THE FACT THAT SUB SECTION (2) & (3) OF SECTION 14A ARE RETROSPECTIVE IN NATURE AND SO IS THE RESULTANT RULE 8D. HENCE, THE DISALLOWANCE U/ 14A WAS REQUIRED TO BE COMPUTED WITH REFERENCE TO THE MANDATE OF THESE PROVISIONS. 3. IN CO NO.4(ASR)/2012, THE ASSESSEE HAS RAISED FO LLOWING GROUNDS: 1. THE WORTHY CIT(A) IS UNJUSTIFIED IN HOLDING TH AT A SUM OF RS.10,45,220/- SHOULD BE DISALLOWED U/S 14A OF TH E INCOME TAX ACT, 1961 IN EARNING THE TAX FREE INCOME DESPITE THE FACT THAT CIT(A) WAS SATISFIED THAT EVEN THIS MUCH AMOUNT H AD NOT BEEN 5 INCURRED IN RELATION TO EARNING INCOME NOT FORMIN G PART OF TOTAL INCOME. 4. IN ITA NO.53(ASR)/2012, THE REVENUE HAS RAISED F OLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN TREATING THE EIGHT RURAL BRANCHES AS ELI GIBLE FOR DEDUCTION U/S 36(1)(VIIA), KEEPING IN VIEW THE RE PORTS OF CENSUS OF INDIA, 1981, SERIES 8 OF J&K. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING 100% DEPRECIATION ON WOODEN PAR TITION AS THEY ARE PERMANENT PARTITIONS AND NOT SUSCEPTIBLE TO DISMANTLING. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING DEPRECIATION OF 60% AS AGAINST THE ADMISSIBLE RATE OF 25% ON UPS & BATTERIES. 4. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DIRECTING THE AO TO RESTRICT THE DISALLO WANCE U/S 14A TO THE EXTENT OF RS.10,45,220/- BY APPLYING THE YARD STICK OF MAKING PRO RATA DISALLOWANCE BASED ON THE COST IN FLATION INDEX. 5. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS UTILI ZED FUNDS AVAILABLE WITH BANK FOR EARNING TAX FREE INCOME A ND THEREFORE, THE AO HAS RIGHTLY WORKED OUT THE DISALLOWANCE OF RS.22.34 CRORES & RS.6.73 CRORES ON ACCOUNT OF PROPORTIONA TE INTEREST & EXPENSES ATTRIBUTABLE TO EARNING IF TAX FREE INCO ME. 6. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT (A) HAS TOTALLY IGNORED THE FACT THAT SUB SECTION (2) & (3 ) OF SECTION 14A ARE RETROSPECTIVE IN NATURE AND SO IS THE RESULTAN T RULE 8D. HENCE, THE DISALLOWANCE U/ 14A WAS REQUIRED TO BE COMPUTED WITH REFERENCE TO THE MANDATE OF THESE PROVISIONS. 6 5. IN ITA NO.85(ASR)/2012, THE REVENUE HAS RAISED F OLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN HOLDING THAT THE ASSESSEE COMPANY WHICH IS A SCHEDULE BANK AND IS NOT ESTABLISHED FOR THE PURPOSES OF M OBILIZING RESOURCES FOR FINANCIAL INFRASTRUCTURE FACILITIES , IS AN INFRASTRUCTURAL CAPITAL COMPANY IN TERMS OF THE PROVISIONS OF SECTION 10(23G) OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DIRECTING THE AO TO RESTRICT THE DISALLO WANCE U/S 14A TO THE EXTENT OF RS.10,45,220/- BY APPLYING THE YARD STICK OF MAKING PRO RATA DISALLOWANCE BASED ON THE COST IN FLATION INDEX. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS UTILIZ ED THE FUNDS AVAILABLE WITH BANK FOR EARNING TAX FREE INCOME A ND THEREFORE, THE A.O. HAS RIGHTLY WORKED OUT THE DISALLOWANCE OF RS.4.58 CRORES & RS.1.38 CRORES ON ACCOUNT OF PROPORTIONA TE INTEREST & MANAGEMENT EXPENSES ATTRIBUTABLE TO EARNING OF T AX FREE INCOME. 4. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) HAS TOTALLY IGNORED THE FACT THAT SUB SECTION (2) & ( 3) OF SECTION 14A ARE RETROSPECTIVE IN NATURE AND SO IS THE RESULTA NT RULE 8D. HENCE, THE DISALLOWANCE U/ 14A WAS REQUIRED TO B E COMPUTED WITH REFERENCE TO THE MANDATE OF THESE PROVISIONS . 5. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING EXPENDITURE OF RS.18,61,451/- O N SWIFT CHARGES FOR TREASURY OPERATIONS AS REVENUE EXPENSES ( THE WORD SWIFT IS AN ABBREVIATION FOR SOCIETY FOR WORLD WIDE INTERB ANK FINANCIAL TELECOMMUNICATION AND THE CHARGES PAID TO THIS SO CIETY IS A LICENCE TO TRANSACT FOREIGN BUSINESS TRANSACTIONS ) WHEN THE SAID EXPENDITURE HAS BEEN INCURRED FOR ENDURING BENEFI TS BY THE ASSESSEE IN FOREIGN BUSINESS TRANSACTIONS. 7 6. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING EXPENDITURE OF RS.3,13,750/- CL AIMED ON ACCOUNT OF SCHOLARSHIP/EDUCATION AID TO DIFFERENT PERSONS WHEN THERE IS NO PROXIMATE NEXUS OF THIS EXPENDITURE W ITH THE BUSINESS ACTIVITIES OF THE ASSESSEE AS PER THE PR OVISIONS OF SECTION 37(1) OF THE INCOME TAX ACT, 1961 AS IT I S NOTHING BUT OF THE NATURE OF CHARITY. 6. IN CO NO.05(ASR)/2012, THE ASSESSEE HAS RAISED F OLLOWING GROUNDS: 1. THE WORTHY CIT(A) IS UNJUSTIFIED IN HOLDING TH AT A SUM OF RS.10,45,220/- SHOULD BE DISALLOWED U/S 14A OF TH E INCOME TAX ACT, 1961 IN EARNING THE TAX FREE INCOME DESPITE THE FACT THAT CIT(A) WAS SATISFIED THAT EVEN THIS MUCH AMOUNT H AD NOT BEEN INCURRED IN RELATION TO EARNING INCOME NOT FORMIN G PART OF TOTAL INCOME. 7. IN ITA NO.86(ASR)/2012, THE REVENUE HAS RAISED F OLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN HOLDING THAT THE ASSESSEE COMPANY WHICH IS A SCHEDULE BANK AND IS NOT ESTABLISHED FOR THE PURPOSES OF M OBILIZING RESOURCES FOR FINANCIAL INFRASTRUCTURE FACILITIES , IS AN INFRASTRUCTURAL CAPITAL COMPANY IN TERMS OF THE PROVISIONS OF SECTION 10(23G) OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DIRECTING THE AO TO RESTRICT THE DISALLO WANCE U/S 14A TO THE EXTENT OF RS.16,68,487/- BY APPLYING THE YARD STICK OF MAKING PRO RATA DISALLOWANCE BASED ON THE COST IN FLATION INDEX. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS UTILIZ ED THE FUNDS AVAILABLE WITH BANK FOR EARNING TAX FREE INCOME A ND THEREFORE, THE A.O. HAS RIGHTLY WORKED OUT THE DISALLOWANCE OF RS.6.58 CRORES & RS.2.50 CRORES ON ACCOUNT OF PROPORTIONA TE INTEREST & MANAGEMENT EXPENSES ATTRIBUTABLE TO EARNING OF T AX FREE INCOME. 8 4. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) HAS TOTALLY IGNORED THE FACT THAT SUB SECTION (2) & ( 3) OF SECTION 14A ARE RETROSPECTIVE IN NATURE AND SO IS THE RESULTA NT RULE 8D. HENCE, THE DISALLOWANCE U/ 14A WAS REQUIRED TO B E COMPUTED WITH REFERENCE TO THE MANDATE OF THESE PROVISIONS . 5. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING EXPENDITURE OF RS.3,10,57,775/- (CORRECT FIGURE IS RS.10,57,775.-CLAIMED ON ACCOUNT OF SCHOLARSHI P & EDUCATION AID TO DIFFERENT PERSONS WHEN THERE IS NO PROXIM ATE NEXUS OF THIS EXPENDITURE WITH THE BUSINESS ACTIVITIES OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 37(1) OF THE INCOME TAX ACT, 1961 AS IT IS NOTHING BUT OF THE NATURE OF CHARITY. 8. IN CO NO.06(ASR)/2012, THE ASSESSEE HAS RAISED F OLLOWING GROUNDS: 1. THE WORTHY CIT(A) IS UNJUSTIFIED IN HOLDING TH AT A SUM OF RS.16,68,487/- SHOULD BE DISALLOWED U/S 14A OF TH E INCOME TAX ACT, 1961 IN EARNING THE TAX FREE INCOME DESPITE THE FACT THAT CIT(A) WAS SATISFIED THAT EVEN THIS MUCH AMOUNT H AD NOT BEEN INCURRED IN RELATION TO EARNING INCOME NOT FORMIN G PART OF TOTAL INCOME. 9. IN ITA NO.418(ASR)/2012, THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN TREATING THE EIGHT RURAL BRANCHES AS ELI GIBLE FOR DEDUCTION U/S 36(1)(VIIA), KEEPING IN VIEW THE RE PORTS OF CENSUS OF INDIA, 1981, SERIES 8 OF J&K. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING 100% DEPRECIATION ON WOODEN PAR TITION AS THEY ARE PERMANENT PARTITIONS AND NOT SUSCEPTIBLE TO DISMANTLING. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING DEPRECIATION OF 60% AS AGAINST THE ADMISSIBLE RATE OF 25% ON UPS AND BATTERIES. 9 4. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DIRECTING THE AO TO RESTRICT THE DISALLO WANCE U/S 14A TO THE EXTENT OF RS.16,68,487/- BY APPLYING THE YARD STICK OF MAKING PRO RATA DISALLOWANCE BASED ON THE COST IN FLATION INDEX. 5. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS UTILIZ ED THE FUNDS AVAILABLE WITH BANK FOR EARNING TAX FREE INCOME A ND THEREFORE, THE A.O. HAS RIGHTLY WORKED OUT THE DISALLOWANCE OF RS.26.31 CRORES & RS.11.01 CRORES ON ACCOUNT OF PROPORTION ATE INTEREST & MANAGEMENT EXPENSES ATTRIBUTABLE TO EARNING OF T AX FREE INCOME. 6. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) HAS TOTALLY IGNORED THE FACT THAT SUB SECTION (2) & ( 3) OF SECTION 14A ARE RETROSPECTIVE IN NATURE AND SO IS THE RESULT ANT RULE 8D. HENCE, THE DISALLOWANCE U/ 14A WAS REQUIRED TO BE COMPUTED WITH REFERENCE TO THE MANDATE OF THES E PROVISIONS. 7. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING PRIOR PERIOD EXPENSES WHEN EVID ENCES IN RESPECT OF MOST OF THE ITEMS IS SUPPORTD BY ONLY E-MAIL CORRESPONDENCES AND THE ASSESSEE HAS FAILED TO PR ODUCE ANY SUPPORTING BILLS/VOUCHERS EITHER BEFORE THE LD. C IT(A) OR BEFORE A.O. TO EVIDENTIATE AS TO HOW THESE EXPENSES HAD CRYSTALLIZED DURING THE YEAR. 10. IN CO NO.33(ASR)/2012, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: 1. THE WORTHY CIT(A) IS UNJUSTIFIED IN HOLDING TH AT A SUM OF RS.16,68,487/- SHOULD BE DISALLOWED U/S 14A OF TH E INCOME TAX ACT, 1961 IN EARNING THE TAX FREE INC OME DESPITE THE FACT THAT CIT(A) WAS SATISFIED THAT EVEN THIS MUCH AMOUNT HAD NOT BEEN INCURRED IN RELATION TO EARNI NG INCOME NOT FORMING PART OF TOTAL INCOME. 10 11. SINCE THE ISSUES IN ALL THE APPEALS ARE IDENTI CAL, THEREFORE, ALL THE APPEALS OF THE REVENUE AND C.O. OF THE ASSESSEE IN ALL THE YEARS MENTIONED HEREINABOVE, ARE BEING DECIDED BY THIS CONSOLIDATED ORDER. 12. FIRST OF ALL WE TAKE UP APPEAL OF THE REVENUE I N ITA NO.43(ASR)/2012 AND C.O. NO.4(ASR)/2012 FOR THE ASSESSMENT YEAR 200 3-04. OUR DECISION IN THIS ORDER SHALL BE APPLICABLE IN OTHER APPEALS OF THE REVENUE AND C.OS OF THE ASSESSEE, BEING ON IDENTICAL FACTS WHEREVER APP LICABLE. 12.1 IN GROUND NO.1 OF THE REVENUE, THE BRIEF FACTS ARE THAT THE A.O. HAS DISALLOWED AN AMOUNT OF RS.8,75,79,887/- TREATING I T AS CLAIMED IN EXCESS TO AS PROVIDED UNDER SECTION 36(1)(VIIA) OF THE I.T.AC T, IN RESPECT OF EIGHT RURAL BRANCHES OF THE BANK BY NOT TREATING THEM AS RURAL BRANCHES ON THE GROUND THAT THESE BRANCHES WERE SITUATED AT PLACES WHERE P OPULATION WAS MORE TEN THOUSAND. 12.2. THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSES SEE FOLLOWING THE ORDER OF THE ITAT, AMRITSAR BENCH, IN ITA NO.363(ASR)/199 9 AND OTHERS MENTIONED AT PAGE 5 OF CIT(A)S ORDER, ON IDENTICAL FACTS. 12.3 THE LD. DR RELIED UPON THE ORDER OF THE ASSESS ING OFFICER. 11 12.4 THE LD. COUNSEL FOR THE ASSESSEE, MR. R.K.GUPT A, CA RELIED UPON THE ORDER OF THE LD. CIT(A) AND ARGUED THAT ON IDENTICA L FACTS, THE ISSUE IN DISPUTE IS COVERED BY THE DECISION OF ITAT, AMRITSAR BENCH IN ITA NO.252(ASR)/2003 AND OTHERS DATED 01.12.2006 AND IN ITA NOS. 216 & 217(ASR)/2006 DATED 25.01.2008 IN RESPECT OF SEVEN BRANCHES EXCEPT KALAROOCH BRANCH. HE ALSO RELIED UPON THE ORDER OF THE LD. CIT(A) IN THIS REGARD. 12.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) ALONGWIT H THE CLAIM OF THE ASSESSEE WHO HAD FOLLOWED THE DECISION OF THE ITAT, AMRITSAR BENCH IN ASSESSEES OWN CASE ON IDENTICAL FACTS IN RESPECT O F BRANCHES MENTIONED IN HIS ORDER. WE FIND NO INFIRMITY IN HIS ORDER. THE CASE IS ALSO COVERED BY THE DECISION OF ASSESSEES OWN CASE IN ITA NO.252(ASR)2 003 AND OTHERS (SUPRA) AND ITA NO.216 & 217(ASR)/2006 (SUPRA) EXCEPT THE B RANCH OF KALAROCH. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CA SE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS R IGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. THUS, GROUND NO.1 OF THE APPEAL OF TH E REVENUE IS DISMISSED. 13. AS REGARDS GROUND NO.2, THE BRIEF FACTS ARE THA T THE A.O. HAS ALLOWED DEPRECIATION @ 10% INSTEAD OF 100% AS CLAIMED BY TH E ASSESSEE. 12 13.1 THE LD. CIT(A) BY FOLLOWING ORDER OF HIS PREDE CESSOR IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03 ALLOWED TH E CLAIM OF THE ASSESSEE. 13.2 THE LD. DR RELIED UPON THE ORDER OF THE ASSESS ING OFFICER AND THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF T HE LD. CIT(A). 13.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE AT PB 10 TO 23 SPECIFICALLY AT PAGE 17 IN PARA 6.2 OF CIT(A)S ORDER FOR THE ASSESSMENT YEAR 2002-03 WHICH HAS BEEN FOLLOWED BY THE LD. CIT(A) IN THE IMPUGNED YEAR, HAS BEEN PERUSED BY US. IN PARA 6.2 OF CIT(A)S ORDER FOR THE ASSESSMENT YEAR 2002-03, THE AO WAS DIRECTED TO VERIFY WHETHER THE WOODEN PARTITION MADE BY THE ASSESSEE WAS ON ITS O WN LAND OR ON LEASE/RENTED ACCOMMODATION. THE AO AFTER VERIFICATI ON HAS CONFIRMED THAT THE WOODEN PARTITION WERE ON LEASED/RENTED ACCOMMOD ATION. KEEPING IN VIEW THESE FACTS AND THE LEGAL POSITION EMERGING FR OM THE DECISION RELIED UPON BY THE LD. CIT(A) IN PARA 6.2. OF HIS ORDER I N THAT YEAR HELD THAT THE ASSESSEE IS ENTITLED TO 100% DEDUCTION IN RESPECT O F EXPENDITURE INCURRED. A PERUSAL OF THE SAID ORDER OF THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2002-03 AND IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT C ASE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY DEL ETED THE ADDITION MADE BY THE A.O. THUS, GROUND NO.2 OF THE REVENUES APPEAL IS DISMISSED. 13 14. AS REGARDS GROUND NO.3, THE BRIEF FACTS ARE THA T THE AO HAS ALLOWED DEPRECIATION ON UPS AND BATTERIES ATTACHED WITH COM PUTERS. @ 25% INSTEAD OF 60% AS CLAIMED. 14.1 THE LD. CIT(A) FOLLOWING THE ORDER OF HIS PRED ECESSOR, WHO HAS FOLLOWED THE DECISION OF THE ITAT, AMRITSAR BENCH, IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1997-98 AND 2000-01 IN ITA NO.274/275(ASR)/2004, HAS ALLOWED THE CLAIM OF THE ASSESSEE AS DEPRECIATI ON ONF UPS AND BATTERIES ATTACHED TO THE COMPUTER @ 60%. 14.2 THE LD. DR RELIED UPON THE ORDER OF THE ASSESS ING OFFICER AND THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF T HE LD. CIT(A). 14.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) AT PAGE 6 & 7 OF HIS ORDER WHERE THE ISSUE IS COVERED BY THE DECISION OF OUR OWN BEN CH, MENTIONED HEREINABOVE, IN FAVOUR OF THE ASSESSEE. IN THE FACT S AND CIRCUMSTANCES OF THE CASE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY DELETED THE ADDITION MADE BY THE A.O. THUS, GROUND NO.3 OF THE REVENUE IS DISMISSED. 15. AS REGARDS GROUNDS NO. 4, 5 & 6 OF THE REVENUE AND C.O. OF THE ASSESSEE BEARING NO.04(ASR)/2012 HAVING SOLITARY GR OUND, THE BRIEF FACTS ARE THAT THE A.O. DISALLOWED A TOTAL AMOUNT OF RS.29,0 7,72,467/- I.E. RS.22.34 14 CRORES AS INTEREST COST AND RS.6.73 CRORES AS EXPEN SES INCURRED IN RELATION TO TAX FREE INCOME U/S 10(15) AND 10(23G) OF THE ACT. 15.1 THE LD. CIT(A), SUSTAINED THE ADDITION OF RS.1 0,45,220/- UNDER SECTION 14A AS PER HIS ORDER AT PAGES 7, 8 & 9. 15.2 AFTER GOING THROUGH THE RECORD AND ARGUMENTS O F THE PARTIES BEFORE US, IT IS BROUGHT TO OUR NOTICE THAT THE ISSUE IS DIREC TLY COVERED BY THE DECISION OF THIS BENCH IN ASSESSEES OWN CASE FOR THE ASSESSMEN T YEAR 2002-03 IN ITA NO.136(ASR)/2010 AND C.O.NO.09(ASR)/2010 DATED 31.1 2.2012, BEING THE ISSUE IN THE PRESENT APPEAL OF THE REVENUE AND C.O. OF THE ASSESSEE. WE FIND THAT THE ISSUE IS SQUARELY COVERED BY OUR OWN DECI SION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03 (SUPRA) AND, T HEREFORE, THE A.O. IS NOT JUSTIFIED IN MAKING ANY DISALLOWANCE ON THIS ACCOUN T AND ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED AND C.O. OF THE ASSESSEE IS ALLOWED IN VIEW OF OUR DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03 (SUPRA). THUS, GROUNDS NO.4, 5 & 6 OF THE REVENUE A RE DISMISSED AND THE SOLE GROUND IN THE C.O. OF THE ASSESSEE IS ALLOWED. 15.3. THUS, APPEAL OF THE REVENUE IN ITA NO.43(ASR) /2012 IS DISMISSED AND CO BEARING NO.4(ASR)/2012 OF THE ASSESSEE IS ALLOWE D. 15 16. NOW, WE TAKE UP APPEAL OF THE REVENUE IN ITA NO .53(ASR)/2012. THE LD. DR, MR. R.L. CHHANALIA, AT THE OUTSET, CONC EDED THAT THE SAID APPEAL BEARING NO.53(ASR)/2012 FOR THE A.Y. 2003-04 HAS BE EN FILED WRONGLY BEFORE THE ITAT, AMRITSAR BENCH. 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD AND FIND THAT THE REVENUE UNDER SOME MIS-CON CEPTION HAS FILED THE DUPLICATE APPEAL, WHICH HAS BEEN TITLED AS ITA NO.5 3(ASR)/2012, WHICH IS IDENTICAL TO REVENUES APPEAL BEARING ITA NO.43(ASR )/2012 FOR THE SAME ASSTT. YEAR 2003-04, HAVING IDENTICAL GROUNDS, ARIS ING FROM THE SAME ORDER OF THE LD. CIT(A), DATED 30.11.2011. SINCE WE HAVE ALR EADY DECIDED THE APPEAL OF THE ASSESSEE ARISING OUT OF THE ORDER OF THE LD . CIT(A) DATED 30.11.2011 ON IDENTICAL GROUNDS, THE PRESENT APPEAL HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.53(ASR)/2012 IS DISMISSED. 18. NOW, WE TAKE UP THE APPEAL OF THE REVENUE IN IT A NO.85(ASR)/2012 AND C.O. NO.05(ASR)/2010 OF THE ASSESSEE FOR THE AS SESSMENT YEAR 2003-04. 18.1. WITH REGARDS TO GROUNDS NO.1 TO 4 OF THE REVE NUE AND C.O. OF THE ASSESSEE, THE AO DENIED EXEMPTION UNDER SECTION 10( 23G) OF THE ACT AND MADE A DISALLOWANCE UNDER SECTION 14A. 16 18.2 THE LD. CIT(A), ALLOWED THE CLAIM OF THE ASSES SEE UNDER SECTION 10(23G) AND RESTRICTED THE DISALLOWANCE U/S 14A TO RS.10,45,220/- AS PER HIS ORDER IN PARA 4 TO 5.3 AT PAGES 4 TO 10 OF HIS ORD ER. 19. A PERUSAL OF RECORD AND ARGUMENTS BY THE PARTIE S BEFORE US, THE PRESENT ISSUE IS COVERED BY OUR OWN DECISION IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03 IN ITA NO.136(ASR)/2010 AND C.O. NO.09(ASR)/2010 DATED 31.12.2012 AND FOLLOWING THE SAME, THE AO WAS NOT JUSTIFIED IN MAKING ANY DISALLOWANCE, AS CLAIMED BY THE ASSESSEE. ACCORDINGLY GROUND NOS. 1 TO 4 OF THE REVENUE ARE D ISMISSED AND SOLE GROUND OF THE ASSESSEE IN THE C.O. IS ALLOWED. 20. AS REGARDS GROUND NO.5 OF THE REVENUE, THE ASSE SSEE CLAIMED SWIFT CHARGES OF RS.18,61,451/- WHICH WERE DISALLOWED BY THE AO AND TREATED THE SAID EXPENDITURE AS CAPITAL EXPENDITURE AND ALLOWED DEPRECIATION @ 30% BEING ASSETS BEING PUT TO USE AFTER 30 TH SEPTEMBER. 20.1. THE LD. CIT(A) VIDE PARA 10.2 OF HIS ORDER TR EATED THE SAID SWIFT CHARGES BEING CHARGES FOR TREASURY OPERATIONS IN VI EW OF THE FACT THAT IT IS A RECURRING EXPENDITURE AND ALLOWED THE CLAIM OF THE ASSESSEE AS REVENUE EXPENDITURE. 17 20.2. THE LD. COUNSEL FOR THE ASSESSEE, MR. R.K.GUP TA, CA RELIED UPON THE ORDER OF THE LD. CIT(A) AND ARGUED THAT SUCH EXPEND ITURE IS OF RECURRING IN NATURE WHICH HAVE TO BE INCURRED EVERY YEAR . THIS EXPLANATION WAS ALSO SUBMITTED BEFORE THE LD. CIT(A) WHO HAS ACCEPTED TH E EXPLANATION AND HE ACCORDINGLY PRAYED TO CONFIRM THE ORDER OF THE LD. CIT(A) IN THIS REGARD. 20.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) AND ARG UMENTS MADE BY MR. R.K. GUPTA, CA THAT SWIFT EXPENDITURE ARE THE REVE NUE EXPENDITURE BEING OF RECURRING IN NATURE. WE FIND NO INFIRMITY IN THE OR DER OF THE LD. CIT(A). THUS, GROUND NO.5 OF THE REVENUE IS DISMISSED. 21. AS REGARDS GROUND NO.6 OF THE REVENUE, THE AO D ISALLOWED RS.3,13,750/- ON ACCOUNT OF SCHOLARSHIP/EDUCATION A ID TO DIFFERENT PERSONS. 21.1. THE LD. CIT(A) VIDE PARA 12 OF HIS ORDER OBSE RVED THAT THE AO HAS NOT DENIED THAT THESE EXPENSES ARE INCURRED FOR TH E PURPOSES STATED. HE HAS MERELY TERMED IT AS CHARITY AND WENT ON TO DISALLO W THE SAME.. THE LD. CIT(A) OBSERVED THAT THE PURPOSE OF BUSINESS DOES NOT MEAN THAT IT SHOULD ALWAYS END IN GENERATION OF DIRECT AND VISIBLE PROF ITS. 22. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) IN PARA 12 AT PAGE 20 & 21 OF 18 HIS ORDER THAT THE AO HAS NOT DENIED THAT THESE EX PENSES ARE NOT INCURRED FOR THE PURPOSES STATED. THE REASONING GIVEN BY THE LD. CIT(A) WITH RESPECT O THE SOCIAL RESPONSIBILITY AND CREATING GOODWILL TO PROM OTE THE BUSINESS IN VIEW OF THE DECISION OF VARIOUS COURTS OF LAW MENTIONED IN HIS ORDER GO TO PROVE THE EXPENDITURE INCURRED IS FOR THE PURPOSE OF BUSI NESS OF THE ASSESSEE AND ALLOWABLE UNDER SECTION 37(1) OF THE ACT. ACCORDING LY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS R IGHTLY DELETED THE ADDITION SO MADE. THUS, GROUND NO.6 OF THE REVENUE IS DISMIS SED. 23. IN THE RESULT, ALL THE GROUNDS OF THE REVENUE I N ITA NO.85(ASR)/2012 ARE DISMISSED AND SOLE GROUND OF THE ASSESSEE IN C. O. 05(ASR)/2012 IS ALLOWED. 24. NOW, WE TAKE UP APPEAL OF THE ASSESSEE IN ITA N O.86(ASR)/2012 AND C.O. NO.06(ASR)/2012 OF THE ASSESSEE FOR THE ASSESS MENT YEAR 2004-05. 24.1 AS REGARDS GROUNDS NO. 1 TO 4 OF THE REVENUE AND C.O. OF THE ASSESSEE ARE CONCERNED, THE AO DENIED EXEMPTION U/S 10(23G) OF THE ACT AND MADE DISALLOWANCE UNDER SECTION 14A OF THE ACT. 24.2 THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESS EE AND RESTRICTED THE DISALLOWANCE UNDER SECTION 14A AT RS.16,68,487/- VI DE PARA 4 TO 5.3 OF HIS ORDER. 19 24.3. AFTER HEARING THE PARTIES AND ON PERUSAL OF RECORD, THE ISSUE IN THE PRESENT APPEAL OF THE REVENUE AND C.O. OF THE ASSES SEE IS SQUARELY COVERED BY OUR OWN DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03 DECIDED BY THIS BENCH IN ITA NO.136(ASR)/2010 AND C .O. NO.09(ASR)/2010, DATED 31.12.2012. FOLLOWING THE SAME, THE AO IS NOT JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE. ACCORDINGLY, GROUNDS NO. 1 TO 4 OF THE REVENUE ARE DISMISSED AND SOLE GROUND IN THE C.O. OF THE AS SESSEE IS ALLOWED. 25. AS REGARDS GROUND NO.5 OF THE REVENUE, THE AO D ISALLOWED AN EXPENDITURE OF RS.10,57,775/- (WRONGLY CLAIMED RS.3 10,57,775/-) CLAIMED BY THE ASSESSEE ON ACCOUNT OF SCHOLARSHIP/EDUCATION AID TO DIFFERENT PERSONS TREATING THE SAME AS IN THE NATURE OF CHARITY AND N OT AS A BUSINESS EXPENDITURE. 25.1. THE LD. CIT(A) VIDE PARA 12 OF HIS ORDER RELY ING UPON THE DECISION OF VARIOUS COURTS OF LAW AND THE SOCIAL RESPONSIBILITY WHICH HAS NOT BEEN DENIED BY THE AO WHICH CREATES GOODWILL AND PROMOTE THE B USINESS OF THE ASSESSEE, ALLOWED THE CLAIM OF THE ASSESSEE. 25.2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE FACTS OF THE CASE. THE ISSUE IS IDENTICAL TO THE FACTS IN THE REVENUE S OWN CASE IN THE CASE OF 20 THE REVENUE IN ITA NO.85(ASR)/2012 (SUPRA) FOR THE ASSESSMENT YEAR 2003- 04, DECIDED BY US HEREINABOVE, WHERE REVENUES APPE AL HAS BEEN DISMISSED. FOLLOWING OUR OWN ORDER IN THE CASE OF THE REVENUE , AS MENTIONED HEREINABOVE, BEING ON IDENTICAL FACTS, WE FIND NO I NFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY ALLOWED THE CLAIM OF TH E ASSESSEE VIDE PARA 12 OF HIS ORDER. THUS, GROUND NO.5 OF THE REVENUE IS DISM ISSED. 25.3. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.86(ASR)/2012 IS DISMISSED AND C.O. NO.06(ASR)/212 OF THE ASSESSEE I S ALLOWED. 26. NOW, WE TAKE UP THE APPEAL OF THE REVENUE IN IT A NO.418(ASR)2012 AND C.O.NO.33(ASR)/2012 OF THE ASSESSEE FOR THE A.Y . 2004-05. 27. AS REGARDS GROUND NO.1, THE AO MADE DISALLOWANC E OF RS.10,73,99,558/- UNDER SECTION 36(1)(VIIA) OF THE ACT IN RESPECT OF EIGHT RURAL BRANCHES OF THE BANK BY NOT TREATING THEM AS RURAL BRANCHES. 27.1. THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSES SEE FOLLOWING THE DECISION OF THE ITAT, AMRITSAR BENCH IN THE CASE OF THE ASSESSEE VIDE PARA 4 OF HIS ORDER. 27.2. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. ON IDENTICAL FACTS, WE HAVE DECIDED THE ISSUE IN FA VOUR OF THE ASSESSEE BY DISMISSING THE APPEAL OF THE REVENUE IN ITA NO.43(A SR)/2012 FOR THE 21 ASSESSMENT YEAR 2003-04 MENTIONED HEREINABOVE AND F OLLOWING THE SAME GROUND NO.1 OF THE REVENUE BEING ON IDENTICAL FACTS IS DISMISSED. 28. AS REGARDS GROUND NO.2 OF THE REVENUE, THE A.O. ALLOWED DEPRECIATION OF 10% INSTEAD OF 100% ON WOODEN PARTI TION, AS CLAIMED BY THE ASSESSEE WHICH WAS ALLOWED BY THE LD. CIT(A) FOLLOW ING HIS PREDECESSOR ORDER REFERRED TO IN PARA 5.10 OF HIS ORDER AT PAGE 8. 28.1. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. ON IDENTICAL FACTS, WE HAVE DECIDED THE ISSUE IN FA VOUR OF THE ASSESSEE BY DISMISSING THE APPEAL OF THE REVENUE IN ITA NO.43(A SR)/2012 FOR THE ASSESSMENT YEAR 2003-04 MENTIONED HEREINABOVE AND F OLLOWING THE SAME GROUND NO.2 OF THE REVENUE BEING ON IDENTICAL FACTS IS DISMISSED. 29. AS REGARDS GROUND NO.3 OF THE REVENUE, THE AO A LLOWED DEPRECIATION ON UPS AND BATTERIES @ 25% INSTEAD OF 60%, AS CLAIM ED BY THE ASSESSEE, FOLLOWING THE ORDER OF HIS PREDECESSOR, AS MENTIONE D AT PARA 9 OF HIS ORDER. THE LD. CIT(A) ALSO FOLLOWED THE DECISION OF THE IT AT, AMRITSAR BENCH IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 19 97-98 & 2000-01 IN ITA NOS. 274 & 275(ASR)/2004 ON IDENTICAL FACTS. 22 29.1. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. ON IDENTICAL FACTS, WE HAVE DECIDED THE ISSUE IN FA VOUR OF THE ASSESSEE BY DISMISSING THE APPEAL OF THE REVENUE IN ITA NO.43(A SR)/2012 FOR THE ASSESSMENT YEAR 2003-04 MENTIONED HEREINABOVE AND F OLLOWING THE SAME GROUND NO.3 OF THE REVENUE BEING ON IDENTICAL FACTS IS DISMISSED. 30. AS REGARDS GROUNDS NO. 4, 5 & 6 AND C.O. NO.33 OF THE ASSESSEE ARE CONCERNED, THE AO MADE DISALLOWANCE OF RS.37,32,00, 000/- I.E. RS.26.31 CRORES ON ACCOUNT OF INTEREST COST AND RS.11.01 CR ORES AS EXPENSES INCURRED IN RELATION TO TAX FREE INCOME U/S 10(15) AND 10(23 G) OF THE ACT. 30.1. THE LD. CIT(A) FOLLOWING THE EARLIER ORDER OF HIS PREDECESSOR, SUSTAINED A DISALLOWANCE OF RS.16,68,477/- AND ALLO WED THE BALANCE OF THE ADDITION VIDE PAGES, 9, 10 11 & 12 OF HIS ORDER. 30.2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE FACTS OF THE CASE. ON IDENTICAL FACTS , WE HAVE DECIDED THE ISSUE IN F AVOUR OF THE ASSESSEE BY DISMISSING THE APPEAL OF THE REVENUE IN ITA NO.43(A SR)/2012 FOR THE ASSESSMENT YEAR 2003-04 MENTIONED HEREINABOVE AND F OLLOWING THE SAME GROUNDS NO.4,5 & 6 OF THE REVENUE, BEING ON IDENTIC AL FACTS ARE DISMISSED. ACCORDINGLY, GROUND NOS. 4,5 & 6 OF THE REVENUE ARE DISMISSED AND SOLE GROUND IN THE C.O. OF THE ASSESSEE IS ALLOWED. 23 31. AS REGARDS GROUND NO.7 OF THE REVENUE, THE A.O. DISALLOWED PRIOR PERIOD EXPENDITURE OF RS.29,03,076/-. 31.1 THE LD. COUNSEL FOR THE ASSESSEE, MR. R.K. GUP TA, CA ARGUED BEFORE THE LD. CIT(A) THAT NO OPPORTUNITY WAS GRANTED TO T HE ASSESSEE TO EXPLAIN ITS STAND. THE ASSESSEES EXPLANATION BEFORE THE LD. CI T(A) THAT THESE EXPENSES WERE CRYSTALLIZED DURING THE YEAR WERE S ENT TO THE AO TO EXPLAIN AND SEND COMMENTS. THE A.O. IN HIS REPORT DATED 16. 03.2012 IN RESPECT OF MOST OF THE ITEMS STATED THAT NO BILL ETC. WERE PR ODUCED BUT E-MAILS CORRESPONDENCE WERE SUBMITTED. 31.2. THE LD. CIT(A) AFTER CONSIDERING THE REPORT O F THE A.O. OBSERVED THAT MOST OF THE ITEMS RELATED TO ARREARS OF RENT/ENHANC ED RENT. IDENTICAL SITUATION PREVAILED IN ASSESSMENT YEAR 2002-03 WHERE LIST OF ITEMS SENT TO A.O. FOR EXAMINATION AND CONSEQUENTIAL DISALLOWANCE WAS VACA TED ON IDENTICAL FACTS. THE LD. CIT(A) IN THE IMPUGNED APPEAL, ALLOWED CERT AIN EXPENDITURE VIDE PAGE 7 & 8 OF HIS ORDER. 31.3. THE LD. DR RELIED UPON THE ORDER OF THE A.O. 31.4. THE LD. COUNSEL; FOR THE ASSESSEE, MR. R.K. G UPTA, CA, RELIED UPON THE SUBMISSIONS MADE BEFORE THE LD. CIT(A). 31.5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) THAT CER TAIN EXPENDITURE WERE 24 CRYSTALISED DURING THE YEAR AS MENTIONED AT PAGE 7 & 8 OF THE ORDER AND THEREFORE, THE SAME ARE ALLOWABLE DURING THE IMPUGN ED YEAR. WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN THIS RE GARD AND HE HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF SUC H EXPENSES. THUS, GROUND NO.7 OF THE APPEAL OF THE REVENUE IS DISMISSED. 32. IN THE RESULT, ALL THE APPEALS OF THE REVENUE I N ITA NOS. 43, 53, 85, 86 & 418(ASR)2012 ARE DISMISSED AND C.O NOS. 04, 05,06 & 33(ASR)/2012 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD JANUARY, 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23RD JANUARY, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:THE JAMMU & KASHMIR BANK LTD. SRINGAR. 2. THE DCIT, CIRCLE-3, SRINAGAR. 3. THE CIT(A), 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.