The ACIT, Circle-2, Surat V. M/s. Prime Co-Operative Bank Ltd., Surat

ITA 292/SRT/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1861 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 04-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S CHAUDHARY
• Keywords: Gift; Depreciation; Business expenditure; Corroborative evidences
• Section: 69; 37(1)

Judgement Text

ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 1 OF 14 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T.A NO. 292/SRT/2017 / A.Y.:2013-14 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE- 1(2), SURAT. V S . THE PRIME CO - OPERATIVE BANK LTD. , 3 RD FLOOR TAPIA VILLA, VIJAY NAGAR SOCIETY GATE-3, MAJURA GATE RING ROAD, SURAT - 395002. [PAN: AAAAP 5507 G] APPELLANT /RESPONDENT /ASSESSEE BY SHRI HIREN R. VEPARI, CA /REVENUE BY SHRI P.S. CHAUDHARY, SR. D.R. / DATE OF HEARING: 07.01.2019 /PRONOUNCEMENT ON: 08.01.2019 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II, SURAT (IN SHORT THE CIT (A)) DATED 04.09.2017 PERTAINING TO ASSESSMENT YEAR 2013-14, WHICH IN TURN HAS ARISEN FROM THE ASSESSMENT ORDER PASSED UNDER SECTION 143 (3) OF INCOME TAX ACT,1961 (IN SHORT THE ACT) BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE- 1(2) SURAT (IN SHORT THE AO). ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 2 OF 14 2. GROUND NO.1 RELATES TO DISALLOWANCE DELETING ADDITION OF RS.3,00,000/- MADE ON ACCOUNT OF DISALLOWANCE OF PAYMENT OF EDUCATION FUND. 3. THE AO DISALLOWED THE AMOUNT OF RS.3 LAKHS UNDER THE HEAD PAYMENT TO EDUCATION FUND ON THE GROUND THAT THIS AMOUNT IS ESTIMATED PROVISION TOWARDS FUND CREATED AS PER SECTION 69 OF GUJARAT CO-OPERATIVE SOCIETIES ACT AND IT HAS NOT BEEN SPENT DURING THE YEAR UNDER CONSIDERATION. 4. IN APPEAL, THE CIT(A) HAS DELETED THIS DISALLOWANCE BY FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF AHMEDABAD TRIBUNAL IN THE CASE OF SURAT NATIONAL CO-OPERATIVE BANK LTD. FOR A.Y. 2007-08 DATED 23.08.2013 IN I.T.A.NO.3242/AHD/2010 WHEREIN FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD. 258 ITR 780 (GUJARAT), SUCH DISALLOWANCE WERE DELETED. 5. BEING AGGRIEVED THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. THE LD. SR. D.R. RELIED ON THE ORDER OF THE AO WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE ISSUE IS COVERED BY AFORESAID DECISION OF TRIBUNAL. ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 3 OF 14 6. WE HAVE CONSIDERED THE FACTS AND FOUND THAT THE ISSUE IS COVERED AGAINST THE REVENUE BY THE DECISION OF TRIBUNAL IN THE CASE OF SURAT IN ITA NO.3242/AHD/2010 FOR A.YL. 2007-08 DATED 23.08.2013 WHEREIN PARA 16 THIS TRIBUNAL HAS OBSERVED AS UNDER: 16. AT THE TIME OF HEARING BEFORE US, THE LEARNED AR REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND DRAWING OUR ATTENTION TO PAPER BOOK PAGE 45 AND 49, RELIED ON THE DECISIONS RENDERED BY THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF (I) MAHESANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD. VS CIT, 258 ITR 780 (GUJ.) AND (II) CIT VS KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD., 209 ITR 898 (GUJ) WHEREIN THE HON'BLE HIGH COURT ON SIMILAR FACTS DECIDED THE IDENTICAL ISSUES IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE AND PLEADED THAT THE CLAIM OF THE ASSESSEE MAY BE ALLOWED. THE LEARNED DR COULD NOT CONTROVERT THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE. SINCE WE HAVE DECIDED IDENTICAL ISSUE IN GROUND NO.3 OF THE APPEAL HEREIN ABOVE IN PARA 13 OF THIS ORDER IN FAVOUR OF THE CASE LAWS CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE, THERE RAISE NO QUESTION NOT TO FOLLOW THE SAME. ACCORDINGLY, WE HEREBY REVERSE THE ORDER OF THE CIT(A) ON THIS ISSUE AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE IN ITS FAVOUR. 7. ON GOING THROUGH ABOVE, WE FIND THAT THIS ISSUE IS SQUARELY COVERED AGAINST THE REVENUE, BY THE ABOVE DECISION OF TRIBUNAL THEREFORE RESPECTFULLY FOLLOWING THE ORDER OF TRIBUNAL (SUPRA), THIS GROUND OF REVENUE IS DISMISSED. 8. GROUND NO. 2 RELATING TO DELETION OF THE ADDITION OF RS.6,57,614/- ON ACCOUNT OF DISALLOWANCE OF CLAIM OF PAYMENT MADE TO MEMBERS OF WELFARE FUND. ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 4 OF 14 9. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS.6,57,614/- UNDER THE HEAD OF MEMBERS WELFARE FUND. THE AO WAS OF THE VIEW THAT EXPENDITURE IS NOTHING BUT AD-HOC ESTIMATED APPROPRIATION TOWARDS THE WELFARE OF THE MEMBERS WHO ARE THE OWNERS OF THE BANK, HENCE, SUCH EXPENSES IS INCURRED EXCLUSIVELY FOR THE BENEFIT OF MEMBERS CANNOT BE ALLOWED AS BUSINESS EXPENDITURE AS PER THE PROVISIONS OF SECTION 37(1) OF THE INCOME TAX ACT. 10. IN APPEAL, THE LD. CIT (A) OBSERVED THAT THAT SUCH EXPENDITURE IS REQUIRED TO BE INCURRED ON THE BASIS OF PRINCIPLE OF CO-OPERATIVE SOCIETY. THE CIT (A) ALSO OBSERVED THAT THIS ISSUE HAD COME UP IN THE APPEAL BEFORE THE ITAT, AHMEDABAD TRIBUNAL IN THE CASE OF SURAT NATIONAL CO-OPERATIVE BANK LTD. FOR A.Y. 2007-08 DATED 23.08.2013 IN I.T.A.NO. 3242/AHD/2010, WHEREIN THIS ISSUE WAS HELD IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE BANK HAD TO MAINTAIN GOOD RELATIONS WITH THE MEMBERS FOR WHICH IT HAS INCURRED EXPENDITURE TOWARDS WELFARE OF THE MEMBERS AS HELD BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF KARJAN CO-OPERATIVE COTTON SALES GINNING & PRESSING SOCIETY VS. CIT 199 ITR 17 [1993] 69 TAXMANN.COM 0304 (GUJ). ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 5 OF 14 11. BEING AGGRIEVED, THE REVENUE FILED THIS APPEAL BEFORE TRIBUNAL. THE LD. SR.D.R. RELIED ON THE ORDER OF THE AO BUT COULD NOT BRING ANYTHING CONTRARY TO THE FINDING OF THE LD. CIT (A). 12. AU CONTRAIRE, THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE ISSUE IS COVERED BY AFORESAID DECISION OF TRIBUNAL. 13. WE HAVE CONSIDERED THE FACTS AND FOUND THAT THE ISSUE IS COVERED AGAINST THE REVENUE BY THE DECISION OF TRIBUNAL IN THE CASE OF IN ITA NO.3242/AHD/2010 FOR A.Y. 2007-08 DATED 23.08.2013 WHEREIN THE TRIBUNAL HAS ALLOWED THE EXPENDITURE BY HOLDING THAT THE ASSESSEE HAD TO MAINTAIN GOOD RELATIONS WITH THE MEMBERS AND THUS THE EXPENDITURE INCURRED IS TOWARDS THE WELFARE OF THE MEMBERS AND SAME IS SUPPORTED BY THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF KARJAN CO-OPERATIVE COTTON SALES GINNING & PRESSING SOCIETY VS. CIT 199 ITR 17 [1993] 69 TAXMANN.COM 0304(GUJ). IN VIEW OF THIS MATTER, RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH AS MENTIONED ABOVE, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 6 OF 14 14. GROUND NO.3 RELATES TO DELETING THE ADDITION OF RS.57,51,930/- MADE ON ACCOUNT OF DISALLOWANCE OF SPECIAL LONG TERM FINANCE FUND. 15. BRIEF FACTS ARE THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.57,51,930/- UNDER SECTION 36 (1) (VIII) UNDER THE HEAD PROVISION FOR SPECIAL LONG-TERM FINANCE FUND. ACCORDING TO THE AO, THIS IS NOT ALLOWABLE AS PER PROVISIONS OF SECTION AS PER PROVISION OF SECTION 36(1)(VIII) AS IT WAS NOT SPENT. 16. IN APPEAL, THE LD. CIT (A) OBSERVED THAT THE ISSUE WAS ALSO IN APPEAL FOR THE ASSESSMENT YEAR 2009-10 WHEREIN THE CIT (A) VIDE HIS ORDER DTD. 17.09.2012 HAS DELETED THE ADDITION IN APPELLANT`S OWN CASE. FURTHER, THE ITAT AHMEDABAD IN THE CASE OF THE ASSESSEE IN I.T.A.NO. 2791/AHD/2012 DATED 23.08.2013 HAS CONFIRMED THE FINDING OF CIT (A) WHILE DISMISSING THE DEPARTMENTAL APPEAL. FURTHER, SIMILAR ADDITION WAS DELETED BY CIT (A) IN A.Y. 2011-12 VIDE ORDER DTD. 20.04.2015 IN THE CASE OF THE ASSESSEE. HENCE, CIT (A) HAS ALLOWED THE APPEAL OF THE ASSESSEE. 17. BEING AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LD. SR.D.R. RELIED ON THE ORDER OF THE AO BUT ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 7 OF 14 COULD NOT CONTROVERT THE FINDING OF CIT (A) THAT ISSUE IS SIMILAR ONE AS DECIDED BY THE TRIBUNAL. 18. PER CONTRA, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED BY TRIBUNAL DECISION IN ASSESSEE`S OWN CASE FOR THE ASSESSMENT YEAR 2009-10 IN I.T.A.NO. 2791/AHD/20-12 DTD. 23.08.2013 (PB-49) AND FOR THE ASSESSMENT YEAR 2010-11 IN I.T.A.NO. 1268/AHD/2015 DTD.06.07.2018 BY ITAT SURAT. 19. WE HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES AND PERUSED THE MATERIAL ON RECORD AND HEARD BOTH THE PARTIES. BOTH PARTIES HAVE AGREED THAT THIS ISSUE IS COVERED AGAINST THAT REVENUE BY THE ORDER OF TRIBUNAL FOR ASSESSMENT YEAR 2009-10 IN THE CASE OF THE SURAT NATIONAL CO-OPERATIVE BANK LTD. IN ITA NO.2793/AHD/2012 DATED 23/08/2013 WHEREIN PARA 8,9 AND 11 THE TRIBUNAL HAS GIVEN THE FINDING AS UNDER :- 8. BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY AO THAT ASSESSEE HAS CLAIMED GIFT EXPENSES OF RS.17,10,728/-. AS PER ASSESSEES EXPLANATIONS, THESE GIFTS WERE DISTRIBUTED TO THE MEMBERS OF THE BANK TO KEEP ALIVE GOOD IMAGE ABOUT MEMBERS AND FOR GENERATING GOODWILL AND ENSURING CONTINUITY OF BUSINESS WITH MEMBERS OF SOCIETIES AND SUCH EXPENSES ARE ALLOWABLE IN THE LIGHT OF DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF DASKROI TALUKA CO-OPERATIVE & SALES UNION LTD. REPORTED IN 126 ITR 413. THE EXPLANATION OF ASSESSEE WAS NOT ACCEPTED BY AO ON THE GROUND THAT SUCH EXPENSES APPEARED TO BE AN ALTRUISTIC AND PHILANTHROPIC URGE WHICH SHOULD HAVE BEEN SATISFIED BY ASSESSEE AT ITS OWN COST NOT AT THE COST OF PUBLIC EXCHEQUER OR OTHER TAX PAYERS AND SUCH EXPENSES ALSO PROVE THAT ASSESSEE WANTS TO INCREASE THE EXPENDITURE ON SOME PRETEXT OR OTHER THEREBY REDUCING HIS TAX LIABILITY. WITH THIS CONCLUSION; ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 8 OF 14 AO DISALLOWED THE GIFT EXPENSES OF RS.17,10,728/- AND ADDED TO THE INCOME OF ASSESSEE. 9. BEFORE LD. CIT(A), ASSESSEE'S SUBMISSION WAS AS FOLLOWS '3.2 DURING THE APPELLATE PROCEEDINGS, IT WAS SUBMITTED BY APPELLANT THAT THE ASSESSEE BANK HAS GIVEN GIFT TO ITS MEMBERS ON THE OCCASION OF COMPLETION OF 35 YEARS BY THE BANK WHICH WAS SPREAD INTO TWO YEARS. PART OF TOTAL AMOUNT PAID WAS DISALLOWED BY AO IN THE A. Y. 2008-09, WHICH WAS ALLOWED BY CIT(APPEALS)-II BY HIS ORDER DATED 06.05.2011. IT WAS FURTHER SUBMITTED THAT THE COOPERATIVE MOVEMENT WAS PRIMARILY FOR THE BENEFIT OF THE CONSUMERS AND ITS MEMBERS AND THIS ASPECT HAS BEEN DISCUSSED IN DETAIL IN THE GUJARAT HIGH COURT JUDGMENT REFERRED TO EARLIER. IN THIS BACKGROUND, APPELLANT REQUESTED TO ALLOW THE DEDUCTION. ' 10. AFTER TAKING INTO CONSIDERATION THE SUBMISSION OF THE ASSESSEE, LD.CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER:- '3.3 I HAVE CONSIDERED THE FACTS ON THE ISSUE. THIS ISSUE HAS BEEN DISCUSSED BY MY PREDECESSOR IN DETAIL WHILE DECIDING THE APPEAL FOR A.Y. 2008-09. TAKING INTO CONSIDERATION THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF DASKRO TALUKA CO- OP. & SALE UNION LTD. 126 ITR 413, LEARNED CIT(APPEAL) HAS DECIDED THE ISSUE AS UNDER:- 'I HAVE DULY CONSIDERED THE JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE TALUKA CO-OP. & SALE UNION LTD. (126 ITR4I3) WHERE EXPENDITURE INCURRED FOR PURCHASE OF ARTICLES FOR PRESENTATION ONLY TO ITS MEMBERS FOR KEEPING ALIVE GOOD IMAGE AMONG MEMBERS AND FOR GENERATING GOODWILL AND ENSURING CONTINUITY OF BUSINESS WITH MEMBER SOCIETIES WAS GELD TO BE EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THE FACTS OF THE APPELLANT'S CASE, IN SO FAR AS THE ABOVE DECISION IS CONCERNED, DIFFER ONLY TO THE EXTENT THAT IN THE RELIED UPON CASE THE HOUSEHOLD STAINLESS STEEL UTENSILS WERE DISTRIBUTED TO THE MEMBERS OF THE SAID CO-OP, SOCIETY, WHEREAS THE BANK ASKED THE MEMBERS TO TAKE THE GIFT ITEM WORTH RS400/- FROM THE SELECTED STORES. 1, THEREFORE, FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE ABOVE REFERRED CASE, DELETE THE ABOVE DISALLOWANCE AND ALLOW THIS GROUND OF APPEAL.' SINCE, THE FACTS ON ISSUE ARE SAME AS IN THE A.Y. 2008-09, RESPECTFULLY FOLLOWING THE DECISION OF MY PREDECESSOR, I ALSO DELETE THE ADDITION MADE BY AO AND ALLOW THE GROUND OF APPEAL. ' SINCE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE BY PLACING RELIANCE ON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF DASKRO TALUKA COOPERATIVE & SALE LTD. 126 ITR 413, WE FEEL NO NEED TO INTERFERE WITH THE ORDER PASSED BY HIM AND THE SAME IS HEREBY UPHELD. ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 9 OF 14 11. GROUND NO. 3 RELATES TO DELETION OF ADDITION OF RS. 38,37,116/- MADE ON ACCOUNT OF STAFF EX-GRATIA. 20. WE FURTHER, FOUND THAT THE ISSUE IS COVERED BY DECISION OF TRIBUNAL IN ASSESSEE OWN CASE FOR THE ASSESSMENT YEAR2010-11 DTD. 06.07.2018 IN ITA NO.1268/AHD2015 WHEREIN THE TRIBUNAL HAS OBSERVED AS UNDER: 10.WE HAVE CONSIDERED THE FACTS AND RIVAL SUBMISSION. WE FIND THAT THE ISSUE HAS BEEN DULY COVERED BY THE DECISION OF TRIBUNAL IN THE ASSESSEES OWN CASE FOR A.Y. 2009-10 DTD.23.08.2013 WHEREIN, THE HONBLE TRIBUNAL OBSERVED AS UNDER : 9. BEFORE LD. CIT(A), ASSESSEES SUBMISSION WAS AS FOLLOWS : 3.2 DURING THE APPELLATE PROCEEDINGS, IT WAS EXPLAINED BY APPELLANT THAT DURING THE ASSESSMENT PROCEEDINGS COMPLETE DETAILS OF WORKING OUT THE 20% OF PROFITS DERIVED, WERE FURNISHED TO THE AO BUT THE SAME WERE IGNORED AS REGARDS GROUND NO.II ABOUT DEDUCTION U/S. 36(1)(VIII) FOR RS.50,09,000/- THE DETAILS HAVE BEEN FURNISHED AS PER PARA (2) OF LETTER DATED 06.08.2011 TO THE ASSESSING OFFICER IN COURSE OF ASSESSMENT PROCEEDINGS. THIS REPRODUCED . TOTAL INTEREST INCOME ON ADVANCES 1640.11 INTEREST INCOME ON HOUSING (86.41 LACS ) AND SSI TERM LOAN (530.52 LACS) 616.93 BANKING OPERATION INCOME. 665.79 SO TAXABLE INCOME FROM HOUSING LOAN AND SSI LONG TERM LOAN IS 250.44 20% SPECIAL PROVISION ON ABOVE. 50.09 BRANCH WISE PARTICULARS OF INTEREST ON HOUSING AND MACHINERY LOAN ARE FURNISHED. 10.AFTER TAKING INTO CONSIDERATION THE SUBMISSION OF THE ASSESSEE, LD. CIT(A) DELETED THIS ADDITION BY OBSERVING AS UNDER : 3.3 I HAVE CONSIDERED THE FACTS ON THE ISSUE, BASIS OF ADDITION MADE BY AO AND SUBMISSIONS OF APPELLANT. THE AOP HAS WRONGLY CONCLUDED THAT THE APPELLANT DID NOT PROVE THAT WHATEVER THE AMOUNT SET ASIDE BY IT, CONSTITUTES 20% OF PROFITS DERIVED FROM THE ELIGIBLE BUSINESS. ALL THE RELEVANT DETAILS ARE PRESENT IN THE P&L ACCOUNT ONLY AND AO HIMSELF COULD HAVE COMPUTED THE 20% OF PROFIT DERIVED FROM THE ELIGIBLE BUSINESS. THE APPELLANT HAS AGAIN FURNISHED ALL THE REQUIRED DETAILS AND WORKED OUT THE PROFIT AMOUNTING TO 250.44 LACS, 20% OF PROFIT THEREOF IS RS.50.09 LACS. ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 10 OF 14 AMOUNT CREDITED TO SPECIAL RESERVE IS RS.50,09,000/- WHICH IS 20% OF THE INCOME FROM HOUSING LOANS AND SSI LONG TERM LOANS. THIS WORKING HAS NOT BEEN CHALLENGE BY AO. IT IS THEREFORE, HELD THAT THE APPELLANT HAS CLAIMED EXPENSES UNDER THIS HEAD AS PER PROVISIONS OF SECTION 36(1)(VIII) WHICH ARE ALLOWABLE TO HIM. IN THE RESULT, APPEAL ON THIS GROUND IS ALLOWED. SINCE THE ABOVE FINDING OF THE LD. CIT(A) REMAINED UNCONTROVERTED AT THE TIME OF HEARING BEFORE US, WE FEEL NO NEED TO INTERFERE WITH THE ORDER PASSED BY HIM AND THE SAME IS HEREBY UPHELD. THIS GROUND OF THE REVENUE IS ALSO DISMISSED. IN VIEW OF ABOVE, SINCE THE FACTS ARE IDENTICAL, THEREFORE, RESPECTIVELY FOLLOWING TRIBUNAL ORDER DTD.23.08.2013, WE FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE, THEREFORE, APPEAL OF THE REVENUE ON THIS GROUND IS DISMISSED. 21. IN THE LIGHT OF THE ABOVE, AS THE FACTS ARE IDENTICAL AS AGREED BY THE PARTIES, AND FINDING OF THE LD. CIT (A) REMAINED AS UN UNCONTROVERTED BEFORE US, THEREFORE, RESPECTFULLY FOLLOWING FINDING OF THE TRIBUNAL IN ASSESSEES OWN CASE AS WELL AS IN THE CASE OF SURAT NATIONAL CO-OPERATIVE BANK LTD. IN ITA NO.2793/AHD/2012 DATED 23/08/2013, THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 22. GROUND NO. 4 STATES THAT CIT (A) HAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.1,48,05,817/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF INVESTMENT DEPRECIATION WITHOUT APPRECIATING FACTS THAT THE ASSESSEE HAS FAILED TO PROVIDE ANY SEPARATE WORKING FOR INVESTMENT OF DEPRECIATION NOR PROVIDED ANY SUPPORTING EVIDENCE. ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 11 OF 14 23. BRIEF FACTS ARE THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.1,48,05,817/- UNDER THE HEAD INVESTMENT DEPRECIATION (AS PER SEPARATE CALCULATION). THE AO DISALLOWED THE SAME AS THE ASSESSEE HAS NOT SUBMITTED SEPARATE WORKING FOR INVESTMENT DEPRECIATION NOR PROVIDED ANY SUPPORTING EVIDENCE AND NATURE OF DEPRECIATION. FURTHER, THE ASSESSEE HAS NOT PROVED THAT PROVISION MADE WAS ADDED BACK IN COMPUTATION OF INCOME. 24. IN APPEAL, BEFORE CIT (A), THE ASSESSEE HAS PROVIDED DETAILED WORKING OF INVESTMENT DEPRECIATION BY WHICH IT WAS SUBMITTED THAT AS PER SCHEDULE 17 TO ACCOUNTS FOR THE YEAR ENDED 31.03.2013 , THE BANK WROTE BACK RS.2,86,27,844/- AS EXCESS PROVISION FOR INVESTMENT DEPRECIATION WHICH INCLUDED AD-HOC AMOUNT OF DEPRECIATION OF RS.2,50,00,000 FROM PROVISION FOR INVESTMENT DEPRECIATION. AS PER THE WORKING FILED, THE APPELLANT WAS REQUIRED TO WRITE BACK PROVISION OF RS.1,21,88,023/- MADE IN A.Y. 2012-13 AND CLAIM LOSS OF RS.19,93,840/- WHICH REMAINED AS ON 31.03.2013. THEREFORE, IN EFFECT RS.1,21,88,023/- HAS ALREADY BEEN CLAIMED AND AFTER REDUCING REMAINING AMOUNT OF RS.19,93,840/-, THE AMOUNT OF RS.1,01,94,183/- HAS TO BE OFFERED FOR TAX. SINCE THE AMOUNT OF RS.2,50,00,000/- HAS BEEN WRITTEN BACK, HENCE, SAME HAS TO BE REDUCED FROM PROFIT AND RS.1,01,94,183/- INCREASED IN ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 12 OF 14 PROFIT AS PER CLAUSE (C) OF WORKING FILED BEFORE CIT (A). ACCORDINGLY, THE DIFFERENCE BETWEEN THE TWO FIGURES OF RS.1,48,05,817/- HAS BEEN REDUCED FROM PROFIT. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAS FILED COMPUTATION OF INCOME COMPUTATION OF INCOME OF RETURN WITH BALANCE SHEET STARTING FROM 31.03.2009 ONWARDS TO SHOW THAT THE PROVISIONS OF INVESTMENT DEPRECIATION AS ON 31.03.2009 ONWARDS AND THIS AMOUNT HAS BEEN CLAIMED AND SHOWN IN RELEVANT SCHEDULES OF THE RETURN OF INCOME. THEREFORE, AFTER ANALYZING AND EXAMINING THE FACTS AS SUBMITTED BEFORE HIM BY THE ASSESSEE, THE CIT (A) HAS DELETED THE ADDITION MADE ON THIS ACCOUNT. 25. BEING AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LD. SR. D.R. RELIED ON THE AO AND SUBMITTED THAT NO SEPARATE WORKING WAS FILED BEFORE THE AO. 26. PER CONTRA, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED DETAILED SEPARATE WORKING ALONG WITH COPY OF RETURN OF INCOME AND BALANCE SHEET STARTING FROM 31.03.2009 WAS FILED BEFORE THE CIT(A) AND AFTER GOING THROUGH, THE SAME, THE CIT(A) HAS ALLOWED THE APPEAL ON THIS GROUND. THEREFORE, HE SUPPORTED THE ORDER OF THE CIT (A). ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 13 OF 14 27. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT AS PER SCHEDULE 17 TO ACCOUNTS FOR THE YEAR ENDED 31.03.2013 SHOWN IN RETURN OF INCOME, THE BANK WROTE BACK RS.2,86,27,844/- AS EXCESS PROVISION FOR INVESTMENT DEPRECIATION WHICH INCLUDED AD-HOC AMOUNT OF DEPRECIATION OF RS.2,50,00,000/- FOR PROVISION FOR INVESTMENT DEPRECIATION. AS PER THE WORKING FILED, THE ASSESSEE WAY BACK IN A.Y. 2012-13 HAD CLAIMED INVESTMENT DEPRECIATION LOSS OF RS.1,21,88,023/- (SHOWN IN SCHEDULE 17 OF PROVISIONS & CONTINGENCIES). THIS MARKET TO MAKE LOSS WAS REDUCED TO RS.19,93,840/- IN A.Y. 2013-14 AND AFTER REDUCING THE OUTSTANDING LOSS OF RS.19,93,840/- FROM INVESTMENT DEPRECIATION OF RS.1,21,88,023/- CLAIMED IN EARLIER YEAR, THE ASSESSEE WAS REQUIRED TO PAY TAX ON RS.1,01,94,183/- I.E. [1,21,88,023 - 19,93,840] ONLY BEING ELIGIBLE PROFIT FOR TAXATION AND THEREFORE, THE ASSESSEE HAS RIGHTLY CLAIMED THE AMOUNT OF RS.1,48,05,817/- AS INVESTMENT DEPRECIATION LOSS INSTEAD OF THE ENTIRE AMOUNT OF RS.2,50,00,000/-. THUS, WE FIND THAT THE LD. CIT (A) HAS VERIFIED THE WORKING SUBMITTED BY THE ASSESSEE BEFORE HIM DURING APPELLATE PROCEEDING AND AFTER ANALYZING THE SAME HAS ALLOWED THE CLAIM. THESE FACTS ARE REMAINED AS UNCONTROVERTED BEFORE US BY THE ACIT-1(2) SURAT V. THE PRIME CO-OPERATIVE BANK LTD. /I.T.A. NO.292/SRT/2017/A.Y.: 2013-14 PAGE 14 OF 14 REVENUE. IN VIEW OF THIS MATTER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT (A), ACCORDINGLY, SAME IS UPHELD. ACCORDINGLY, THIS GROUND OF REVENUE IS THEREFORE, DISMISSED. 28. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 29. THE ORDER PRONOUNCED IN THE OPEN COURT ON 08.01.2019. SD/- SD/- (DIVA SINGH) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER SURAT: DATED: 8 TH JANUARY 2019/OPM COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT