District Co-operative Bank Ltd., Meerut V. ACIT, Najibabad

ITA 2986/DEL/2013

• Counselvise Citation: 298620114 RSA 2013
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARVINDER KAUR
• Assessee Lawyers: P S KASHYAP
• Keywords: Revenue expenditure; Capital expenditure
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH B BB B : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI H.L. KARWA, BEFORE SHRI H.L. KARWA, BEFORE SHRI H.L. KARWA, BEFORE SHRI H.L. KARWA, HONBLE HONBLE HONBLE HONBLE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI B.C. MEENA, B.C. MEENA, B.C. MEENA, B.C. MEENA, HONBLE HONBLE HONBLE HONBLE ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO. .. .2986/DEL/2013 2986/DEL/2013 2986/DEL/2013 2986/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008- -- -09 0909 09 M/S DISTRICT CO M/S DISTRICT CO M/S DISTRICT CO M/S DISTRICT CO- -- -OPERATIVE OPERATIVE OPERATIVE OPERATIVE BANK LIMITED, BANK LIMITED, BANK LIMITED, BANK LIMITED, CIVIL LI CIVIL LI CIVIL LI CIVIL LINES NES NES NES- -- -II, II,II, II, BIJNOR. BIJNOR. BIJNOR. BIJNOR. PAN : AABFD2205R. PAN : AABFD2205R. PAN : AABFD2205R. PAN : AABFD2205R. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, NAJIBABAD. NAJIBABAD. NAJIBABAD. NAJIBABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.S. KASHYAP, CA. RESPONDENT BY : SMT. PARVINDER KAUR, SR.DR. ORDER ORDER ORDER ORDER PER B.C. MEENA, AM PER B.C. MEENA, AM PER B.C. MEENA, AM PER B.C. MEENA, AM : : : : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDE R OF LEARNED CIT(A), BAREILLY DATED 1 ST MARCH, 2013. 2. THE ASSESSEE IS A COOPERATIVE SOCIETY PROVIDING BANKIN G SERVICES IN THE RURAL DISTRICT OF BIJNOR, UTTAR PRADESH. THE ASSESSEE HAS MADE A CONTRIBUTION OF ` 1 LAKH FOR FIRE SAFETY SYSTEM TO BE INSTALLED AT AUDITORIUM/CONFERENCE ROOM OF PUBLIC SECTOR UNDERTA KINGS BHAWAN (PSU BHAWAN), LUCKNOW. THE ASSESSING OFFICER TREATED T HE EXPENDITURE TO BE CAPITAL IN NATURE BY HOLDING THAT IT HAS GIVEN ENDURING BENEFIT TO THE ASSESSEE. THE CIT(A) HAS ALSO CO NFIRMED THE ADDITION. NOW, THE ASSESSEE IS IN APPEAL BEFORE US BY TA KING THE FOLLOWING GROUNDS:- ITA-2986/DEL/2013 2 1. THAT ON FACTS AND IN LAW ADDITION OF RS.1,00,00 0/- ON ACCOUNT OF TREATING SUBSCRIPTION PAID TOWARDS FIRE SYSTE M AS CAPITAL EXPENDITURE IS TOTALLY WRONG, UNJUSTIFIED & ILLEGAL. ASSESSEE HAS PAID A SUM OF RS.1,00,000/- AS ITS SHARE TOWARDS FIRE SYSTEM TO BE INSTALLED IN PSU AUDITORIUM/CONFERENCE ROOM LUCKNOW. THE SAID EXPENSE S TOOK PLACE AS THERE WAS BUSINESS NECESSITY. THEREFORE, TH E BASIS TAKEN BY LD.CIT FOR CONFIRMING ADDITION OF RS.1,00,000/- IS TOTALLY WRONG, UNJUSTIFIED AND UNWARR ANTED. 2. THAT THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, ALTER OR WITHDRAW ANY OF THE GROUND OF APPEAL ON OR BEFOR E THE DATE OF HEARING. 3. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. THE APEX BODY OF THE ASSESSEE IS DISTRICT COOPERATIVE BANK. THE OFFICE O F NIBANDHAK SAHAKARI BANK LTD. DIRECTED ASSESSEE TO MAKE CONTRIBUTI ON TOWARDS SAHKARITA BHAWAN CONFERENCE ROOM. VARIOUS SEMINARS/ME ETINGS ARE ORGANIZED IN THIS HALL WHERE ASSESSEE BANK WAS ALSO PARTIC IPATING. THE CONTRIBUTION WAS TOWARDS THE FIRE FIGHTING, ALARM SYST EM AND ELECTRIFICATION OF THE CONFERENCE/SEMINAR ROOM AT SA HAKARITA BHAWAN LOCATED AT LUCKNOW. THE ASSESSEE WAS NOT THE OWNER OF T HESE PREMISES. THE REQUEST WAS MADE FOR ` 6 LAKHS. HOWEVER, THE ASSESSEE HAS MADE A CONTRIBUTION OF ` 1 LAKH ONLY. SINCE ASSESSEE DID NOT OWN THE PREMISES, IT CANNOT BE SAID THAT AN ASSET OF ENDURI NG BENEFIT HAS COME INTO EXISTENCE AND THE ASSESSEE WILL ENJOY THE FRUI TS OF THE EXPENDITURE IN THE LONG RUN. THE ASSESSEE IS HAVING BUSI NESS CONNECTIONS WITH UP COOPERATIVE UNION TO WHOM THIS CO NTRIBUTION HAS BEEN MADE. THEREFORE, IN OUR CONSIDERED VIEW, THIS E XPENDITURE IS AN ALLOWABLE REVENUE EXPENDITURE AS PER THE PROVISIONS OF SECTION 37(1) OF ITA-2986/DEL/2013 3 THE INCOME-TAX ACT, 1961. THE FACTS OF THE CASE SUGG EST THAT THIS EXPENDITURE WAS FOR THE PURPOSE OF BUSINESS. THEREFORE , WE SET ASIDE THE ORDER OF AUTHORITIES BELOW AND ALLOW THE ASSESSEES A PPEAL ON THIS GROUND. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 3 RD JULY, 2014. SD/- SD/- ( (( (H.L. KARWA H.L. KARWA H.L. KARWA H.L. KARWA) )) ) (B.C. MEENA (B.C. MEENA (B.C. MEENA (B.C. MEENA) )) ) PRESIDENT PRESIDENT PRESIDENT PRESIDENT ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATED : 03.07.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : M/S DISTRICT CO M/S DISTRICT CO M/S DISTRICT CO M/S DISTRICT CO- -- -OPERATIVE BANK LIMITED, OPERATIVE BANK LIMITED, OPERATIVE BANK LIMITED, OPERATIVE BANK LIMITED, CIVIL LINES CIVIL LINES CIVIL LINES CIVIL LINES- -- -II, BIJNOR. II, BIJNOR. II, BIJNOR. II, BIJNOR. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, NAJIBABAD. NAJIBABAD. NAJIBABAD. NAJIBABAD. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR