The ITO, Ward-5(2), Baroda V. Shree Vardhaman Sahakari Bank Ltd., Baroda

ITA 2212/AHD/2014

• Counselvise Citation: 221220514 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 04-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M J SHAH
• Keywords: Business expenditure
• Section: 143(3); 37(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: S H RI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER INCOME TAX OFFICER, WARD - 5(2), 5 TH FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA - 390007 (APPELLANT) VS SHREE VARDHAMAN SAHAKARI BANK LTD, HEAD OFFICE, NR. TARKESHWAR, RAOPURA, BARODA - 390001 PAN: AACAS4216K (RESPONDENT) REVENUE BY : S H RI JAMES KURIAN , SR. D . R. ASSESSEE BY: S H RI M.J. SHAH , A.R. DATE OF HEARING : 08 - 09 - 2 015 DATE OF PRONOUNCEMENT : 28 - 10 - 2 015 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS R EVENUE S APPEAL FOR A.Y. 2010 - 11 , AR ISES FROM ORDER OF CIT(A) - V , BARODA DATED 15 - 05 - 2014 IN APPEAL NO. CAB/(A)V/71/12 - 13 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT TH E ACT . I T A NO . 2212 / A HD/20 14 A SSESSM ENT YEAR 2010 - 11 I.T.A NO. 2212/AHD/2014 A.Y. 2010 - 11 PAGE NO ITO VS. SHREE VARDHAMAN SAHAKARI BANK LTD 2 2. THE REVENUE S SOLE SUBSTANTIVE GROUND PLEADED IN THE INSTANT APPEAL CHALLENGES THE LOWER APPELLATE ORDER DELETING DISALLOWANCE OF RS. 24 LACS BY THE ASSESSING OFFICER IN ASSESSMENT ORDER DATED 31 - 01 - 2013. THE ASSESSEE IS A CO - OPERATIVE BANK. IT CLAIMED THE IMPUGNED SUM AS DEDUCTI ON FOR HAVING PAID THE SAME TO LIFE INSURANCE C OOPERATION TOWARDS GROUP LEAVE ENCASHMENT SCHEME. THE ASSESSING OFFICER INVOKED THE IMPUGNED DISALLOWANCE BY OBSERVING THAT SECTION 29 OF THE ACT ENVISAGED COMPUTATION OF INCOME UNDER THE HEAD PROFITS AND GAINS OF BUSINESS AND PROFESSION AS PER THE PROVISIONS CONTAINED IN SECTIONS 30 TO 43D OF THE ACT. AND THE SAME NOWHERE PROVIDED SUCH A PREMIUM AS DEDUCTION WHILE COMPUTING THE TOTAL TAX ABLE INCOME. HE TREATED TH IS PAYMENT TO BE ONLY A FUTURE CONTINGENT LIABILITY WHICH MAY OR MAY NOT OCCUR IN FUTURE. THIS RESULTED IN THE IMPUGNED DISALLOWANCE/ADDITION BEING MADE IN ASSESSEE S CASE. 3. THE CIT(A) HAS REVERED THE ASSESSING OFFICER S ACTION BY QUOTING CASE LAW OF ACIT VS. HERO MOTCORP. LTD (2013) 26 TAXMANN.COM 103 (DELHI ITAT) AND CIT VS. HINDUSTAN LATEX LTD (2012) 22 TAXMANN.COM 332 (KERALA) HOLDING THAT PAYMENT OF PREMIUM TOWARDS LEAVE ENCASHMENT IS AN EXPENDITURE WHOLLY AND EXCLUSIVELY INCURRED FOR THE PURPOSE OF THE B USINESS U/S. 37(1) OF THE ACT. THIS LEAVES THE REVENUE AGGRIEVED. I.T.A NO. 2212/AHD/2014 A.Y. 2010 - 11 PAGE NO ITO VS. SHREE VARDHAMAN SAHAKARI BANK LTD 3 4. WE HAVE HEARTH BOTH THE PARTIES. CASE FILE PERUSED. RELEVANT FACTS STAND NARRATED IN THE PRECEDING PARAGRAPHS. THE REVENUE S GRIEVANCE IS THAT GROUP LEAVE ENCASHMENT POLICY PREMIUM IN QUESTION OF RS. 24 LACS PAID TO LIC IS NOT AN ASCERTAINED LIABILITY. IT FAILS TO REBUT THE LOWER APPELLATE FINDINGS BASED ON THE ABOVE STATED CASE LAW THAT THE SAME IS COVERED AS A BUSINESS EXPENDITURE WHOLL Y AND EXCLUSIVELY INCURRED FOR THE PURPOSE O F THE BUSINESS U/S. 37 OF THE ACT. WE AFFIRM THE CIT(A) S ORDER UNDER CHALLENGE. THE REVENUE S ARGUMENTS FAIL. 5. THIS REVENUE S APPEAL IS DISMISSED . ORDER PR ONOUNCED IN THE OPEN C OURT ON 28 - 10 - 2015 SD / - SD/ - ( PRAMOD KUMAR ) ( S . S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 28 /10 /2015 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUAR D FILE. BY ORDER/ , / ,