The Fazilka Central Co-Operative Bank Ltd, Abohar V. The Dy. Commissioner of Income-tax, Bathinda

ITA 299/ASR/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68141 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-08-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAHAVIR SINGHDR
• Assessee Lawyers: A K PERIWAL; SSH SUDHIR SEHGAL
• Keywords: Business expenditure; Question of law; Tax effect
• Section: 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.299(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN :AAABT2344Q THE FAZILKA CENTRAL CO-OP. BANK LTD. VS. DY. COMMR. OF INCOME TAX, H.O. ABOHAR. CIRCLE-II, BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY:S/SH.SUDHIR SEHGAL AND A.K.PERIWAL, CA RESPONDENT BY:SH.MAHAVIR SINGH,DR DATE OF HEARING:07/08/2013 DATE OF PRONOUNCEMENT:26/08/2013 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A), BATHINDA DATED 19.02.2013 FOR THE ASSESSMENT YEAR 2 007-08. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1A) THE LD. CIT(A) BATHINDA HAS ERRED IN LAW AND F ACTS BY UPHOLDING THE ADDITION OF RS.29,73,044/- MADE BY DCIT, CIR.II (I.E. RS.22,03,792/- ON ACCOUNT OF DISALLOWANCE O F GRATUITY PAID OF EMPLOYEES FOR NON COMMON CADRE PROMOTED TO COM MON CADRE AND CEASED TO BE EMPLOYEES OF OUR BANK (+) RS.7,69,252/- PAID FOR COMMON CADRE STAFF OF PUN JAB STATE CO- OP. BANK WHO WORKED WITH OUR BANK). ITA NO.299(ASR)/2013 2 1B) THAT UPHOLDING THE DISALLOWANCE OF GRATUITY PA ID OF EMPLOYEES IS TOTALLY UNJUSTIFIED WITHOUT CONSIDERING FACTS, EVIDENCE AND CIRCUMSTANCES AND WAS BASED ON WRONG MISINTERPRET ATION OF SECTION 40A(7)(A) AND 40A(7)(B) OF THE INCOME TAX ACT AND WITHOUT CONSIDERING THE PROVISIONS OF SECTION 36( 1)(V) AND 37 OF THE INCOME TAX ACT WHEN THE SAME BECAME PAYABL E DURING THE YEAR ON TERMINATION OF SERVICES OF EMPLOYEES FROM APPELLANT SOCIETY AND EVEN IT WAS REMITTED TO NEW ENTITY I.E. PUNJAB STATE CO-OP. BANK LTD. CHANDIGARH AS PER S ERVICE RULES AND CONSENT OF SUCH EMPLOYEES AND SHOULD HAVE BEE N TAKEN AS PAID AS PER SECTION 43(2) OF THE INCOME TAX ACT. 2. THAT UPHOLDING ADDITION OF RS.1,61,572/- MADE ON AC COUNT OF ALLEGATION OF LESS INTEREST CHARGED BY DCIT CIR.II, BHATINDA IS ALSO NOT JUSTIFIED AND IN ACCORDANCE WITH LAW AND A LSO RESULTED DOUBLE TAXATION OF SAME INCOME WHEN THE ASSESSEE HA S DULY SHOWN WHAT WAS CHARGED AND RECOVERABLE DURING THE YEAR AND WHAT EVER DIFFERENCE FOUND RECOVERABLE AND TRACED L ATER ON DURING AUDIT HAS DULY BEEN SHOWN IN INCOME OF ENSU ING YEAR AS PER SAME PRACTICE FOLLOWED BY THE ASSESSEE SOCIETY FROM YEAR TO YEAR. SO ADDITION MADE IS ALSO LIABLE FOR DELETION. 3. THAT THE APPEAL IS WITH IN THE TIME AND COPY OF ORD ER OF CIT(A) BHATINDA ALONGWITH RECEIPT OF RS.10000/- DEPOSITED AS APPEAL FEE ARE ALSO ENCLOSED. 4. THAT THE APPELLANT RESERVE THE RIGHT TO MAKE ANY AD DITION IN GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEAD AND DISPOSED OFF. 2. THE BRIEF FACTS IN GROUND NO.1 ARE THAT THE ASSE SSEE HAD MADE PROVISION OF GRATUITY OF RS.22,03,792/- FOR EMPLOYE ES WHO ARE PROMOTED DURING THE YEAR AND BECAME EMPLOYEES OF PUNJAB STAT E CO-OP. BANK, CHANDIGARH AND A FURTHER PROVISION OF RS.7,69252/- WAS MADE IN RESPECT OF EMPLOYEES OF PUNJAB STATE CO-OP BANK BUT WERE WORKI NG WITH THE ASSESSEE. THESE PROVISIONS WERE EXAMINED BY HIM WITH REFERENC E TO THE PROVISIONS OF ITA NO.299(ASR)/2013 3 SECTION 40A(7)(B) OF THE ACT AND IT WAS HELD BY HIM THAT THE AFORESAID PROVISION WERE NOT TOWARDS APPROVED GRATUITY OR TOW ARDS ACTUAL PAYMENT OF GRATUITY THAT HAD BECOME PAYABLE IN THE PREVIOUS YE AR AND WAS THUS NOT ALLOWABLE EXCEPT THE PROVISION OF RS.20,930/- BECAU SE THE SAME WAS PAYABLE TO ONE SHRI RAVINDER KUMAR, PEON ON HIS DEATH. HE A CCORDINGLY DISALLOWED THE CLAIM TO THE EXTENT OF RS.29,73,044/-. IN THIS REGARD, THE AO ALSO RELIED UPON CIRCULAR NO.169 DATED 23.06.1975 AND ON THE JU DGMENT OF PUNJAB & HARYANA HIGH COURT IN THE CASE IF BITONI LAMPS LIMI TED VS. CIT REPORTED AT 45 TAXMAN 397 IN WHICH THE JUDGMENT OF HONBLE SUPR EME COURT IN THE CASE OF SHREE SAJJAN MILLS LIMITED REPORTED AT 156 ITR 585 (SC) WAS FOLLOWED. 3. THE LD. COUNSEL FOR THE ASSESSEE, SH. SUDHIR SEH GAL, ARGUED THAT THE FAZILKA CENTRAL CO-OPERATIVE BANK WITH ITS H.O. AT ABOHAR IS A CO-OPERATIVE SOCIETY SEPARATE LEGAL ENTITY DOING BANKING BUSINES S WITH ITS PAN; AAABT2344Q. THE SERVICE RULES OF EMPLOYEES ARE BEIN G GOVERNED BY PUNJAB STATE CO-OPERATIVE FINANCIAL INSTITUTION SER VICE RULES 1958. THE APEX BODY I.E. PUNJAB STATE CO-OPERATIVE BANK LTD. CHANDIGARH IS ALSO A SEPARATE LEGAL ENTITY HAVING ITS PAN: AAAAP0253B AN D ITS SERVICE RULES ARE BEING GOVERNED BY THE PUNJAB STATE CO-OP. FINAN CIAL INSTITUTIONS SERVICE COMMON CADRE RULES 1970-71. THE MANAGEMENT/EMPLOYEE S CONSIST OF ITA NO.299(ASR)/2013 4 FOLLOWING CATEGORIES TO WHOM PROVISIONS OF PAYMENT OF GRATUITY ACT ARE APPLICABLE AS PER ABOVE SAID SERVICE RULES: COMMON CADRE EMPLOYEE CATEGORY/DESIGNATION OF EMPLOYEE 1. ASSISTANT GENERAL MANAGER 2. SENIOR MANAGER 3. MANAGER NON COMMON CADRE 4. ASSISTANT MANAGER 5. ACCOUNTANT 6. CLERK 7. DAFTRI 8. DRIVER 9. PEON CUM CHOWKIDAR 10. SWEEPER 3.1. THE OFFICIALS AT S.NO.1 TO 3 (CALLED COMMON CADRE EMPLOYEES) ARE THE EMPLOYEES OF PUNJAB STATE CO-OP. BANK LTD. CHANDIGA RH AND THEIR SERVICES ARE BEING GOVERNED UNDER THE PUNJAB STATE CO-OPERAT IVE FINANCING INSTITUTION SERVICE (COMMON CADRE) RULES, 1970-71. THESE EMPLOYEES ARE POSITIONED EITHER AT PUNJAB STATE CO-OPERATIVE BANK CHANDIGARH OR ITS DIVISIONAL OFFICERS IN THE STATE OF PUNJAB OR AT DI FFERENT DISTRICT CENTRAL CO- OP. BANKS THEN SALARY AND COST OF PAYMENT OF GRATUI TY ADMISSIBLE TO THESE EMPLOYEES FOR THE PERIOD OF THEIR STAY AT THAT DCCB ARE BEING MET & BORNE BY THESE DCCB. GRATUITY DUE & PAYABLE DURING THE PE RIOD OF STAY WITH SUCH DCCB ARE ALSO REMITTED & PAID TO APEX BODY I.E. PUN JAB STATE CO-OPERATIVE BANK LTD. CHANDIGARH UNDER WHOM THEY ARE EMPLOYED. ITA NO.299(ASR)/2013 5 3.2. THE OFFICIALS AT S.NO. 1 TO 3 ARE THE EMPLOYEE S (CALLED NON COMMON CADRE) OF THE FAZILKA CENTRAL CO-OPERATIVE BANK LTD . ABOHAR AND THEIR SERVICES ARE BEING GOVERNED BY PUNJAB STATE CO-OP. FINANCING INSTITUTION SERVICE RULES, 1958 AND COST OF SALARIES AND OTHER RETIREMENT BENEFITS INCLUDING GRATUITY ARE BEING MET AND BORNE BY THE BANK ITSELF. WHEN THESE EMPLOYEES FROM S.NO. 4 TO 10 ARE PROMOTED IN S.NO. 1 TO 3 TO COMMON CADRE, THEN THESE EMPLOYEES CEASED TO BE EMPLOYEES OF THE BANK AND ARE NO MORE EMPLOYEES OF BANK W.E.F. SUCH CESSATION AND AL L THE GRATUITY DUES AND OTHER RETIREMENT BENEFITS ARE IMMEDIATELY REMITTED & PAID TO APEX BODY I.E. PUNJAB STATE CO-OPERATIVE BANK LTD. CHANDIGARH BY O UR BANKER AS PER SERVICE RULES. A) COPIES OF PAN CARDS OF BOTH THE BANKS I.E. FAZIL KA CENTRAL C- OP. BANK ABOHAR AND PUNJAB STATE CO-OP. BANK CHANDI GARH ARE ALSO ENCLOSED SHOWING SEPARATE LEGAL ENTITY & SEPAR ATELY ASSESSED TO INCOME TAX. B) COPY OF COMMON CADRE SERVICE RULES 1970-71 ARE ALSO ENCLOSED. C) COPIES OF CIRCULAR NO. MISC.-120/6086 DATED 27.0 7.2001 & CIRCULAR NO.637 DATED 22.02.2003 REGARDING REMITTAN CE OF GRATUITY PAYABLE TO EMPLOYEES OF COMMON CADRE AS PE R THEIR SERVICE RULES ARE ENCLOSED. 3.3. AS REGARDS DISALLOWANCE OF PAYMENT OF GRATUITY AMOUNTING TO RS.29,73,044/- IT WAS STATED THAT THE ADDITIONS MAD E WERE TOTALLY UNJUSTIFIED AND UNCALLED FOR. THE GRATUITY AMOUNT PAID WAS ADDE D ON WRONG INTERPRETATION AND WRONG INFERENCE DRAWN FROM THE L ANGUAGE OF SECTION ITA NO.299(ASR)/2013 6 40A(7)(A) OF THE I.T.ACT WITHOUT CONSIDERING SECTIO N 40A(7)(B) OF THE ACT WHICH IS NOT ACCORDING TO LAW AND ALSO MISUNDERSTOO D THE FACTS REGARDING ACTUAL REMITTANCE OF GRATUITY. 3.4. IT WAS FURTHER STATED THAT DURING THE RELEVANT A.Y. 2007-08, SOME STAFF MEMBERS WHO WERE PROMOTED VIDE ORDER NO.4737 DATED 29.08.2006 OF COMMISSIONER CO-OPERATIVE SOCIETIES PUNJAB (FROM S .NO.52 TO 60 OF PROMOTION ORDER) WHO WERE EARLIER THE EMPLOYEES OF THE BANK CEASED TO BE EMPLOYEES OF OUR BANK W.E.F. 30.08.2006 AND WERE IN DUCTED IN PUNJAB STATE CO-OPERATIVE BANK LTD. CHANDIGARH. SUCH EMPLOYEES A LSO GAVE THEIR CONSENT REGARDING JOINING WITH OTHER EMPLOYER I.E. PUNJAB S TATE CO-OPERATIVE BANK LTD. CHANDIGARH AND DEMANDED GRATUITY DUE TO THEM O N THEIR SUCH CESSATION TO EMPLOYMENT WITH FAZILKA CENTRAL CO-OPERATIVE BAN K ABOHAR MAY KINDLY BE REMITTED TO OUR NEW EMPLOYER I.E. PUNJAB STATE C O-OPERATIVE BANK LTD. CHANDIGARH. SUCH GRATUITY PAYMENT DUE TO THEM AMOU NTING TO RS.2203792.00 ON LEAVING THE JOB FROM OUR BANK WAS ALSO DEMANDED BY PUNJAB STATE CO-OPERATIVE BANK LTD. CHANDIGARH VIDE LETTER NO.10903 DATED 29.12.2006 AS PER SERVICE RULES AS DETAILS GIVEN AB OVE. AS SUCH THE ASSESSEE BANK WAS REQUIRED TO PAY THE GRATUITY DUE TO THEM U NDER THE SERVICE RULES & CANNOT WITHHOLD SUCH DUES AND SAME WAS REMITTED & P AID TO THE NEW EMPLOYER AS PER CALCULATIONS & DETAILS AND SAME ARE DETAILED AS UNDER : ITA NO.299(ASR)/2013 7 AMOUNT PARTICULARS 2203792.00 REMITTED & PAID VIDE DEMAND DRAFT NO.8 49487 DATED 31.03.2007 TO PUNJAB STATE CO-OPERATIVE BANK LT D. CHD. SIMILARLY THE ASSESSEE BANK WAS ALSO REQUIRED TO PA Y THE SALARY AS WELL AS GRATUITY LIABILITY OF SUCH EMPLOYEES AS PER SERVICE RULES WHO WORKED WITH THE ASSESSEE BANK BUT WERE ACTUALLY EMPLOYEES OF TH E APEX BANK I.E. PUNJAB STATE CO-OPERATIVE BANK LTD. FOR THE PERIOD OF THEIR STAY & WORKING IN THE BANK. AND SAME WAS ALSO REMITTED TO THEM AS PER CALCULATIONS AND DETAILS AND SAME ARE AS UNDER: AMOUNT PARTICULARS 769252.00 REMITTED & PAID VIDE DEMAND DRAFT NO.849 482 DATED 31.03.2007 TO PUNJAB STATE CO-OPERATIVE BANK LTD . CHD. 3.5. THE LD. COUNSEL FURTHER STATED THAT IN FACT TH ESE GRATUITY PAYMENTS HAVE ACTUALLY BECAME PAYABLE, INCURRED, PAID & REMI TTED. NO SUCH PROVISION HAS BEEN MADE AND OUTSTANDING AS ALLEGED BY THE A.O . IN THE ASSESSMENT ORDER. PROVISION MADE OF GRATUITY PAYABLE OF OWN EM PLOYEES OUTSTANDING IN THE BALANCE SHEET HAS DULY BEEN ADDED BY ASSESSEE I N HIS RETURN OF INCOME DULY CONFIRMED BY THE A.O. IN HIS ASSESSMENT ORDER. ITA NO.299(ASR)/2013 8 3.6. THE LD. COUNSEL FURTHER MADE A REFERENCE TO SE CTION 40A(7(A) & 40A(7)(B), WHICH ARE REPRODUCED AS UNDER: 40A(7)A) SUBJECT TO THE PROVISIONS OF CLAUSE (B), NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF ANY PROVISION (WHETHER CAL LED AS SUCH OR BY ANY OTHER NAME) MADE BY THE ASSESSEE FOR THE PAYMEN T OF GRATUITY TO HIS EMPLOYEES ON THEIR RETIREMENT OR ON TERMINATION OF THEIR EMPLOYMENT FOR ANY REASON: 40A(7(B) NOTHING IN CLAUSE (A) SHALL APPLY IN RELAT ION TO ANY PROVISION MADE BY THE ASSESSEE FOR THE PURPOSE OF PAYMENT OF A SUM BY WAY OF ANY CONTRIBUTION TOWARDS AS APPROVED GRATUITY FUND, OR FOR THE PURPOSE OF PAYMENT OF ANY GRATUITY, THAT HAS BECOME PAYABLE DURING THE PREVIOUS YEAR. SO WHILE GOING THROUGH SECTION 40A(7)(B), IT IS QU ITE CLEAR THAT THESE GRATUITY PAYMENTS ARE ALLOWABLE AS THESE ARE ACTUAL LY PAID TO NEW ENTITY FOR OUR EMPLOYEES ON THEIR LEAVING THE JOB OF OUR BANK AS THEY CEASED TO EMPLOYEES OF OUR BANK AND BECAME THE EMPLOYEES THE NEW ENTITY WHICH THEY HAVE JOINED AND PAID AT THEIR REQUEST & CONSENT. T HE AO CONSIDERED ONLY SECTION 40A(7)(A) AND IGNORED TO CONSIDER SECOND LI MB OF SECTION 40A(7)(B) OF THE ACT AND NOT TAKING PROPER AND FACTUALLY INTE RPRETATION . THE AO CONSIDERED OLD SECTION 40A(7)(A) & 40A(7)(B) WITH E XPLANATION WHICH WAS SUBSTITUTED BY FINANCE ACT 1999 W.E.F. 01.04.2000 W ITH CALCULATION & EXPLANATION. AS SUCH THE ORDER PASSED BY THE AO IS NOT SUSTAINABLE UNDER AMENDED SECTION AND NOT PROPER. ITA NO.299(ASR)/2013 9 3.7. THE LD. COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO SECTION 43(20 OF THE ACT WHICH DEFINES TERM PAID CONSIDE RATION ACCORDING TO WHICH GRATUITY ACTUALLY PAID OR INCURRED IS ALLOWAB LE. SECTION 43(2) OF THE I.T.ACT, DEFINES AS UNDER: PAID MEANS ACTUALLY PAID OR INCURRED ACCORDING TO THE METHOD OF ACCOUNTING UPON THE BASIS OF WHICH THE PROFITS & GA INS ARE COMPUTED UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PRO FESSION 3.8. THE LD. COUNSEL FURTHER MADE A REFERENCE TO S ECTION 37 ABOUT THE EXPENDITURE WHICH ALSO INCLUDES GRATUITY AND WHIC H IS AS UNDER: ANY EXPENDITURE (NOT BEING EXPENDITURE OF THE NATU RE DESCRIBED IN SECTION 30 TO 36 AND NOT BEING IN THE NATURE OF CAP ITAL EXPENDITURE OF PERSONAL EXPENSES OF THE ASSESSEE). LAID OUT OR EXP ENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS OR PRO FESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER TH E HEAD PROFITS AND GAINS OF BUSINESS OF PROFESSION. SO IT IS AN ACTUALLY PAID GRATUITY & TRANSFERRED TO OTHER NEW BUSINESS ENTITY. SO WHILE GOING THROUGH THE ABOVE SECTION IT IS QUIT E CLEAR THAT GRATUITY PAID OR TRANSFERRED TO OTHER NEW ENTITY IS DEFINITELY AN ALLOWABLE DEDUCTION IF SECTION 40A(7)(A) & (B) ARE READ WITH SECTION 43(2) & SECTION 43B(B) & SECTION 37 OF THE ACT. 3.9. THE LD. COUNSEL FURTHER STATED THAT THE CASES REFERRED TO BY AO FOR ADDITION FOR REMITTANCE OF GRATUITY TO NEW BUSINESS ENTITIES ARE NOT APPLICABLE IN THIS CASE AND JUDGMENT OF HONBLE SUP REME COURT IN THE CASE OF SHREE SAJJAN MILLS LTD. VS. CIT 156 ITR 585 ARE UNDER OLD SECTION AND ITA NO.299(ASR)/2013 10 REGARDING PROVISION MADE BY ASSESSEE AND DOES NOT P ROHIBIT ACTUAL PAYMENTS TO NEW BUSINESS ENTITY WHEN ACTUALLY THEY CEASED TO EMPLOYEES OF THE ASSESSEE BANK AND LEFT SERVICES OF THE BANK. AS REG ARDS THE JUDGMENT RELIED UPON BY THE A.O. IN THE CASE OF CIT VS. BITONI LAMP S LTD. 277 ITR 396, THE HONBLE PUNJAB & HARYANA HIGH COURT HAS ALSO MISINT ERPRETED AND MISAPPLIED IN THIS CASE. HOWEVER, GRATUITY IS ADMIS SIBLE ACCORDING TO CLAUSE (B) OF SECTION. IN THE SAID DECISION, THE HONBLE H IGH COURT HAS HELD AS UNDER: A PERUSAL OF SECTION 40A(7) OF THE ACT SHOWS THAT ACCORDING TO CLAUSE (A) NO DEDUCTION IN RESPECT OF ANY PROVISION FOR PAYMENT OF GRATUITY IS ADMISSIBLE. CLAUSE (B) HOWEVER, PROVIDE S FOR TWO EXCEPTIONS TO THE GENERAL RULE CONTAINED IN CLAUSE (A). ACCORDING TO CLAUSE (B) THE PROVISION FOR GRATUITY CAN BE ALLOWE D (I) IF IT HAD BEEN MADE FOR PAYMENT BY WAY OF CONTRIBUTION TOWARDS AN APPROVED GRATUITY FUND OR (II) IF THE PROVISIONS IS FOR THE PURPOSE OF PAYMENT OF ANY GRATUITY THAT HAS BECOME PAYABLE DURING THE PRE VIOUS YEAR. HOWEVER, GRATUITY IS ADMISSIBLE ACCORDING TO CLAUSE (B) AS IT HAS BECOME DUE, INCURRED, PAID AND REMITTED IS ALLOWABLE AS BU SINESS EXPENDITURE. IN OUR CASE THE GRATUITY OF EMPLOYEES CEASING TO BE OUR EM PLOYEES HAVE BEEN DEPOSITED & TRANSFERRED TO THEIR ACCOUNTS TO THE NE W BUSINESS ENTITY WHERE THEY HAVE JOINED WITH THEIR CONSENT AND REQUEST AND SO IT IS AN ALLOWABLE DEDUCTION. 3.10. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE FOLLOWING DECISIONS: I) W.T.SURENT & CO. LTD. VS. CIT 230 ITR 643 ITA NO.299(ASR)/2013 11 II) J.R. DIAMONDS LTD. VS. ACIT 70 ITD 42 (ITAT MU MBAI BENCH SMC) III) C.I.T. VS. SARADA BINDING WORKS 152 ITR 521 (MAD.) IV) CIT VS. SALEM MAGNESITE PVT. LTD,. 189 ITR 155 (BOM ) V) CIT VS. BITONI LAMPS LTD. 277 ITR 396 (P&H) AND DECISIONS OF VARIOUS OTHER COURTS OF LAW WHICH ARE PART OF THE PAPER BOOK. ALL THE PAPER JUDGMENTS ARE PLACED ON RECORDS TO SUPPORT THE ARGUMENTS MADE HEREINABOVE. 4. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF BOTH THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. FOR THE BETTER APPRECIATION AND TO DECIDE THE PRESE NT ISSUE, FOR THE SAKE OF CONVENIENCE, WE REPRODUCE SECTION 40A(7) AS UNDER: SECTION 40A (7) ( A ) SUBJECT TO THE PROVISIONS OF CLAUSE ( B ), NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF ANY PROVISION (WHETHER CA LLED AS SUCH OR BY ANY OTHER NAME) MADE BY THE ASSESSEE FOR THE PAYMENT OF GRAT UITY TO HIS EMPLOYEES ON THEIR RETIREMENT OR ON TERMINATION OF THEIR EMPLOYMENT F OR ANY REASON. ( B ) NOTHING IN CLAUSE ( A ) SHALL APPLY IN RELATION TO ANY PROVISION MADE BY THE ASSESSEE FOR THE PURPOSE OF PAYMENT OF A SUM BY WA Y OF ANY CONTRIBUTION TOWARDS AN APPROVED GRATUITY FUND, OR FOR THE PURPOSE OF P AYMENT OF ANY GRATUITY, THAT HAS BECOME PAYABLE DURING THE PREVIOUS YEAR. EXPLANATION. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED TH AT WHERE ANY PROVISION MADE BY THE ASSESSEE FOR THE PAYMENT OF GRATUITY TO HIS EMPLOYEES ON THEIR RETIREMENT OR TERMINATION OF THEIR EMPLOYMEN T FOR ANY REASON HAS BEEN ITA NO.299(ASR)/2013 12 ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF THE ASSESSEE FOR ANY ASSESSMENT YEAR, ANY SUM PAID OUT OF SUCH PROVISIO N BY WAY OF CONTRIBUTION TOWARDS AN APPROVED GRATUITY FUND OR BY WAY OF GRA TUITY TO ANY EMPLOYEE SHALL NOT BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR IN WHICH THE SUM IS SO PAID. 5.1. FROM THE READING OF THE SECTION 40A(7), IT IS EVIDENT THAT NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF ANY PROVISION MADE B Y THE ASSESSEE FOR THE PAYMENT OF GRATUITY TO HIS EMPLOYEES ON THEIR RETIR EMENT OR ON TERMINATION OF THEIR EMPLOYMENT FOR ANY REASONS. WHILE READING CLAUSE (B), IT IS MENTIONED THAT NOTHING IN CLAUSE (A) SHALL APPLY IN RELATION TO ANY PROVISION MADE BY THE ASSESSEE FOR THE PURPOSE OF PAYMENT OR CONTRIBUTION TOWARDS APPROVED GRATUITY FUND OR FOR THE PURPOSE OF PAYME NT OF ANY GRATUITY THAT HAS BECOME PAYABLE DURING THE PREVIOUS YEAR. FROM T HE READING OF SECTION 40A(7)(B), IT IS QUITE CLEAR THAT PROVISIONS MADE F OR THE GRATUITY HAVE NOT TO BE ALLOWED AS DEDUCTION.WHEREAS IN THE PRESENT CAS E, NO SUCH PROVISION HAS BEEN MADE. WHATEVER PROVISION HAS BEEN MADE WITH RE GARD TO CERTAIN EMPLOYEES THAT HAS ALREADY BEEN ADDED IN THE COMPUT ATION OF INCOME BY THE ASSESSEE AND WHICH IS NOT A MATTER OF DISPUTE. THE DISPUTE IS WITH REGARD TO THE AMOUNT OF RS.22,03,792/- ON ACCOUNT OF GRATUITY PAID FOR NON COMMON CADRE EMPLOYEES PROMOTED TO COMMON CADRE CEASED TO BE EMPLOYEES OF THE ASSESSEE BANK AND RS.7,69,252/- ON ACCOUNT OF GRATU ITY PAID FOR COMMON CADRE STAFF OF THE BANK TOTALING TO RS.29,73,044/- . THE AMOUNT OF ITA NO.299(ASR)/2013 13 RS.22,03,792/- WAS REMITTED AND PAID VIDE DEMAND D RAFT NO.849487 DATED 31.03.2007 TO PUNJAB STATE CO-OPERATIVE BANK LTD. C HANDIGARH AND RS.7,69,252/- ALSO REMITTED AND PAID VIDE DEMAND D RAFT NO.849882 DATED 31.03.2007 TO THE SAME BANK AS MENTIONED HEREINABO VE. THESE GRATUITY PAYMENT BECAME ACTUALLY PAYABLE DURING THE YEAR E NDING 31.03.2007 WHICH WERE PAID AND REMITTED AS MENTIONED HEREINABOVE AND NO PROVISION HAS BEEN MADE AND NOTHING IS OUTSTANDING AS AT 31.03.2007. 5.2. IT IS PERTINENT TO MENTION THAT THE EMPLOYEES THEMSELVES DEMANDED THE GRATUITY AND THE LETTERS OF DEMAND ARE ON RECORD AT PB 26 TO 34 WHERE IT HAS BEEN MENTIONED BY EACH EMPLOYEE THAT HE CEASED TO B E EMPLOYEE OF THE ASSESSEE BANK WITH EFFECT FROM THE DATE MENTIONED I N THE LETTER AND THEREFORE, ASSESSEE BANK WAS REQUESTED THAT THE AMOUNT OF GRAT UITY OF THE SERVICE RENDERED BY THAT EMPLOYEE IN THE ASSESSEE BANK BE P AID TO THE PUNJAB STATE CO-OP. BANK LTD. CHANDIGARH AS PER LETTER DATED NO. 10983 DATED 29.12.2006. THE LETTER NO.10983 DATED 29.12.2006 IS A LETTER OF THE PUNJAB STATE CO-OP. BANK LTD. CHANDIGARH ON RECORD, WHERE IT HAS BEEN ASKED BY THAT BANK TO REMIT THE AMOUNT OF GRATUITY AND LEAVE SALARY CONTRIBUTION OF NON-CADRE PERIOD IN RESPECT OF NON COMMON CADRE EMP LOYEES WHO WERE PROMOTED AS MANAGERS IN THE COMMON CADRE AVAILABLE AT PB-25. ITA NO.299(ASR)/2013 14 5.3. IT IS ALSO PERTINENT TO MENTION THAT THE SAID EMPLOYEES CEASED TO BE EMPLOYEES OF THE ASSESSEE BANK AND THEREFORE, THE A RGUMENT OF THE LD. DR THAT THE EMPLOYEES HAVE NOT RETIRED CANNOT BE ACCEP TED. THE ASSESSEE-BANK AND PUNJAB STATE CO-OP. BANK LTD. CHANDIGARH ARE DI FFERENT PERSONS HAVING SEPARATE PAN CARDS AND SEPARATE LEGAL ENTITY AND S EPARATELY ASSESSED TO INCOME TAX DEPARTMENT. MOREOVER, THE PUNJAB STATE C O-OP. BANK LTD. CHANDIGARH VIDE LETTER DATED 27/07/2001 HAS ISSUED A LETTER TO THE MANAGER OF THE CENTRAL CO-OPERATIVE BANKS OF PUNJAB STATE TO REMIT THE SAID AMOUNT, WHICH IS AVAILABLE AT PB 15 & 16. 5.4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E ASSESSEE HAD NOT MADE THE PROVISIONS FOR THE GRATUITY TO HIS EMPLOYEES WH ICH BECAME PAYABLE DURING THE YEAR ON THEIR RETIREMENT AND HAS BEEN PA ID DURING THE IMPUGNED YEAR AND THEREFORE, THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE A.O. ON THIS ACCOUNT. OUR VIEWS FIND SUPPORT FR OM THE DECISION OF CIT VS. BITONI LAMPS LTD. REPORTED IN 277 ITR 396 WHERE IT HAS BEEN HELD THAT : PAYMENT OF CONTRIBUTION TO GRATUITY TRUST, DEDUCT ION WAS CLAIMED IN RESPECT OF AMOUNT ACTUALLY DEPOSITED IN THE FUND W HICH HAD BECOME PAYABLE DURING THE PREVIOUS YEAR RELEVANT TO THE A SSESSMENT YEAR UNDER CONSIDERATION. NO CASE MADE OUT BY THE REVENUE THA T THE GRATUITY IN RESPECT OF WHICH THE SAID PAYMENT WAS MADE HAD NOT BECOME PAYABLE DURING THE RELEVANT YEAR. GRANT OF APPROVAL TO THE GRATUITY FUND WAS NOT RELEVANT AS THE DEDUCTION WAS NOT CLAIMED ON A CCOUNT OF ANY PROVISION NO DISALLOWANCE COULD BE MADE UNDER S. 40A(7). ITA NO.299(ASR)/2013 15 5.5. ALSO OUR VIEWS FIND SUPPORT FROM THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF W.T.SUREN & CO. LTD. VS. CIT 2 30 ITR 643, WHEREIN IT HAS BEEN HELD THAT: THE AMOUNT OF GRATUITY WHICH WAS PAID TO R.LTD. ON BEHALF OF THE EMPLOYEES WAS NOT ON ACCOUNT OF TRANSFER OF THE DI STRIBUTION UNIT OF THE ASSESSEE BUT ON ACCOUNT OF STOPPING OF THAT BU SINESS AND THE EMPLOYEES WORKING IN THAT UNIT BECOMING SURPLUS RE SULTING IN TERMINATION OF THEIR SERVICES. OTHER BUSINESS OF T HE ASSESSEE, AS HELD BY THE TRIBUNAL CONTINUED. PAYMENT OF GRATUITY AMO UNT TO R.LTD WAS NOT MADE BY THE ASSESSEE OF ITS OWN BUT AT THE INS TANCE AND ON BEHALF OF THE EMPLOYEES WHOSE SERVICES THROUGH TERMINATED IN THE ASSESSEE- COMPANY WERE TAKEN OVER BY R.LTD. WITH THE PROMISE OF CONTINUITY OF SERVICE IN R.LTD. AS FAR AS THE ASSESSEE IS CONCER NED, IT WAS BOUND TO MAKE PAYMENT OF GRATUITY TO THE EMPLOYEES WHOSE SE RVICES WERE TERMINATED AND, IN FACT, THE EMPLOYEES WHO DID NOT JOIN R.LTD. WERE DIRECTLY PAID GRATUITY. ASSESSEE WAS OBLIGED TO PA Y GRATUITY TO THOSE EMPLOYEES WHO HAD JOINED R.LTD. INSTEAD OF THOSE E MPLOYEES GETTING THE GRATUITY AMOUNT DIRECTLY, GOT THAT AMOUNT PAID TO R.LTD. WHO PUT THAT AMOUNT IN TRUST IN A SEPARATE ACCOUNT FOR THE EXCLUSIVE USE OF THE TRANSFERRED EMPLOYEES AND PAYABLE TO THEM AFTER TH EIR SERVICES IN R.LTD. TERMINATED INCLUDING THE GRATUITY DUE ON AC COUNT OF SERVICE RENDERED IN R.LTD. AS PER THE SCHEME RELATING TO G RATUITY OF THAT COMPANY. PAYMENT OF AMOUNT OF GRATUITY TO R.LTD. W AS MADE AS PER THE SCHEME OF THE ASSESSEE AND IT WAS NOT AN EX GR ATIA OR SOME ISOLATED PAYMENT. IT WAS NEVER DISPUTED AND IN FAC T, NO QUESTION RAISED IF THE SERVICES OF THE EMPLOYEES OF THE ASSESSEE W ERE NOT TERMINATED AND THAT BEING THE POSITION, THE OBLIGATION OF THE ASSESSEE TO MAKE PAYMENT OF GRATUITY TO ITS EMPLOYEES WAS AND OBL IGATION IN PRAESENTI. PAYMENT OF GRATUITY AMOUNT TO R.LTD. WAS WITH THE CONSENT OF THE EMPLOYEES TRANSFERRED THERE. THUS, PAYMENT OF GRAT UITY AWARDED BY THE ASSESSEE TO R.LTD IN THE CIRCUMSTANCES OF THE CASE WAS AN EXPENDITURE WHOLLY LAID OR EXPENDED FOR THE PURPOS E OF THE BUSINESS OF THE ASSESSEE AND WAS ALLOWABLE DEDUCTION. IT CANNO T CERTAINLY BE SAID THAT IT WAS AN EXPENDITURE INCURRED MUCH AHEAD OF TIME AS THE SERVICES OF THE EMPLOYEES WITH THE ASSESSEE WERE TERMINATED . THE ASSESSEE HAD NOT WOUND UP ALL OF ITS AFFAIRS. ONLY A PART OF IT S BUSINESS WAS CLOSED AND TRANSFERRED TO R.LTD. IN THESE CIRCUMSTANCES, TRIBUNAL WAS RIGHT ITA NO.299(ASR)/2013 16 IN HOLDING THAT THE PAYMENT OF GRATUITY AMOUNT WAS NOT ON ACCOUNT OF CLOSING THE BUSINESS OF THE ASSESSEE BUT FOR THE P URPOSE OF BUSINESS OF THE ASSESSEE AND, THUS, ENTITLED TO DEDUCTION UNDE R CL. (XV) OF SUB-S. (2) OF S. 10 OF 1922 ACT CORRESPONDING TO S. 37(1) OF THE 1961 ACT. THEREFORE, THE ASSESSEE IS ENTITLED TO THE PAYMENT OF GRATUITY AMOUNT MADE TO R.LTD. AS AN ALLOWABLE DEDUCTION. 5.6. RELIANCE IS ALSO PLACED IN THE CASE OF CIT VS . SARADA BINDING WORKS REPORTED AT 152 ITR 521 (MADRAS), WHERE IT HAS BEEN HELD THAT : BUSINESS EXPENDITURE GRATUITY TRANSFER OF BUSIN ESS ALONGWITH EMPLOYEES PAYMENT TO TRANSFEREE AMOUNT OF GRATUI TY LIABILITY IN RESPECT OF EMPLOYEES- IS ALLOWABLE BUSINESS EXPEND ITURE. 5.7. RELIANCE IS ALSO PLACED IN THE CASE OF SIT VS. SALEM MAGNESITE PVT. LTD. 189 ITR 155 (BOMBAY) WHERE IT HAS BEEN HELD TH AT: REFERENCE QUESTION OF FACT-DEDUCTION OF GRATUITY ASSESSEE MAKING PAYMENT OF GRATUITY AMOUNT TO THE STATE GOVERNMENT IN ACCORDANCE WITH THE AGREEMENT BETWEEN WORKERS AND THE STATE G OVERNMENT TRIBUNAL HELD THAT ASSESSEE WAS ENTITLED TO THE DE DUCTION OF AMOUNT PAID BY ASSESSEE-THEREFORE, NO QUESTION OF LAW ARO SE FROM THE TRIBUNALS ORDER ALLOWING THE ASSESSEES CLAIM. 6. IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT C ASE AND OUR FINDINGS HEREINABOVE, WE REVERSE THE ORDER OF LD. CIT(A) AN D DIRECT THE A.O. TO ALLOW THE CLAIM OF THE ASSESSEE WITH RESPECT TO GRA TUITY PAID AMOUNTING TO RS.22,03,792/-. ACCORDINGLY, GROUNDS 1A & 1B OF THE ASSESSEE ARE ALLOWED. ITA NO.299(ASR)/2013 17 7. AS REGARDS GROUND 2, THE BRIEF FACTS ARE THAT T HE A.O. MADE AN ADDITION OF RS.1,61,572/- FOR THE REASONS THAT THE INTEREST WAS LESS CHARGED FROM THE CUSTOMERS. 7.1. THE ACTION OF THE A.O. WAS CONFIRMED BY THE LD .CIT(A). 7.2. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASSES SEE, MR. SUDHIR SEHGAL THAT THIS ADDITION IS ALSO TOTALLY UNJUSTIFIED AS T HE ASSESSEE HAS SHOWN & ACCOUNTED WHAT IT HAS CHARGED FROM THE CUSTOMERS AN D RECOVERABLE FROM THEM FOR THIS YEAR ON DAY TO DAY BASIS AND IF ANY D IFFERENCE OF INTEREST RECOVERABLE IS TRACED LATER ON OR POINTED OUT BY TH E AUDITORS DUE TO MISCALCULATION AND OVERSIGHT THAT HAS BEEN SHOWN IN ENSUING YEAR AND THE SAME PRACTICE & METHOD IS BEING FOLLOWED BY THE ASS ESSEE FROM YEAR TO YEAR SINCE THE START OF BANK AND BEING ACCEPTED BY DEPAR TMENT ALSO ON CONTINUITY CONCEPT AND EVIDENCE REGARDING THE SAME IS REPRODUC ED HEREUNDER: A.Y. YEAR ENDING DISCREPANCIES PARTICULARS 2004-05 31.03.2004 NET INTEREST LESS CHARGED DULY ACCEPTED BY BY RS.324872/- DEPARTMENT 2005-06 31.03.2005 NET INTEREST LESS CHARGED DULY ACCEPTED BY BY RS.168933/- DEPARTMENT 2006-07 31.03.2006 NET INTEREST LESS CHARGED DULY ACCEPTED BY BY RS.413915/- DEPARTMENT 2007-08 31.03.2007 NET INTEREST LESS CHARGED ADDIT ION MADE & BY RS.161572/- UNDER APPEAL. IT IS FURTHER SUBMITTED THAT IF ADDITION ON ACCOUNT OF MISCALCULATION & OVERSIGHT OF INTEREST IN THIS YEAR THEN IT IS ALSO ALLOWABLE IN ENSUING YEAR & ITA NO.299(ASR)/2013 18 INCOME OF ENSUING YEAR IS TO BE REDUCED AND THAT WO ULD BE UNNECESSARY A COMPLICATED PROCESS AS SAME INCOME CANNOT BE ASSESS ED IN (2) ASSESSMENT YEARS. EVEN THERE IS NO TAX EFFECT AS INCIDENCE OF TAX IS SAME IN A.Y.2007- 08 & A.Y. 2008-09. 7.3. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON D ECISIONS OF VARIOUS COURTS OF LAW: I) CIT VS A GAJAPATHY NAIDU 53 ITR 114 (SC) II) CIT VS. CITIBANK N.A. 124 TAXATION 19 (BOM) III) CIT VS. RAJASTHAN FINANCIAL CORPORATION 134 C TR 145 (RAJ) IV) CIT VS. DALMIA DADRI CEMENT LTD. 77 ITR 410 (P&H) V) BERGER PAINTS INDIA LTD. VS. CIT 266 ITR 99 (SC) 8. LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER S OF BOTH THE AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AS PER REPORT OF THE AUDITORS, IT WAS OBSERVED BY T HE AO THAT THE ASSESSEE HAS CHARGED LESSER INTEREST OF RS.5,71,139 AND CHAR GED EXCESS INTEREST OF RS.4,09,567/- ON LOAN AND ACCORDINGLY NET INTEREST CHARGED IS LESSER BY RS.1,61,572/-. IT WAS EXPLAINED BEFORE THE AUTHORIT IES BELOW BY THE ASSESSEE THAT THIS IS A CONSISTENT PRACTICE BEING FOLLOWED B Y THE ASSESSEE SINCE BEGINNING THAT ANY INTEREST EXTRA CHARGED OR LESSER CHARGED HAS TO BE ADJUSTED IN THE NEXT YEAR. THE ASSESSEE HAS SUBMITT ED THE DETAILS OF INTEREST LESSER CHARGED OR OVER CHARGED WHICH HAS BEEN ACCEP TED BY THE DEPARTMENT ITA NO.299(ASR)/2013 19 IN THE PRECEDING YEAR AND CONSISTENT PRACTICE IS BE ING FOLLOWED IN THE IMPUGNED YEAR AS WELL. EVEN THERE IS NO TAX EFFECT AS INCIDENCE OF TAX IN THE IMPUGNED YEAR AS WELL AS IN THE FOLLOWING YEAR AND IN THE PRECEDING YEAR IS THE SAME. IN THE PRESENT FACTS AND CIRCUMSTANCES, T HE RIGHT TO RECEIVE HAS ACCRUED ONLY IN THE FOLLOWING YEAR AND THE SAME HAS BEEN CHARGED IN THE FOLLOWING YEAR ITSELF. THEREFORE, THE SAID CHARGE C ANNOT BE MADE DURING THE IMPUGNED YEAR. THE RELIANCE IS PLACED IN THE CASE O F CIT VS. A GAJAPATHY NAIDU (SC)(SUPRA) WHERE IT HAS BEEN HELD : WHEN AN INCOME TAX OFFICER PROCEEDS TO INCLUDE A PARTICULAR INCOME IN THE ASSESSMENT, HE SHOULD ASK HIMSELF, INTER AL IA, TWO QUESTIONS NAMELY: (I) WHAT IS THE SYSTEM OF ACCOUNTANCY ADOP TED BY THE ASSESSEE, AND (II) IF IT IS THE MERCANTILE SYSTEM, SUBJECT TO THE DEEMING PROVISIONS, WHEN HAS THE RIGHT TO RECEIVE ACCRUED? IF HE COMES TO THE CONCLUSION THAT SUCH A RIGHT ACCRUED OR AROSE TO T HE ASSESSEE IN A PARTICULAR ACCOUNTING YEAR, HE SHOULD INCLUDE THE SAID INCOME IN THE ASSESSMENT OF THE SUCCEEDING ASSESSMENT YEAR. NO P OWER IS CONFERRED ON THE ITO UNDER THE ACT TO RELATE BACK AN INCOME THAT ACCRUED OR AROSE IN A SUBSEQUENT YEAR TO ANOTHER EARLIER YEAR , ON THE GROUND THAT INCOME AROSE OUT OF AN EARLIER TRANSACTION. NOR IS THE QUESTION OF REOPENING OF ACCOUNTS RELEVANT IN THE MATTER OF AS CERTAINING HEN A PARTICULAR INCOME ACCRUED OR AROSE. THE MEANING OF THE WORK ACCRUE OR ARISE IN SECTION 4(1)(B)(I) OF THE I NCOME TAX ACT, 1922 CANNOT BE EXTENDED SO AS TO TAKE IN AMOUNTS RECEIV ED IN A LATER YEAR THOUGH THE RECEIPT WAS NOT ON THE BASIS OF A RIGHT ACCRUED IN THE EARLIER YEAR. SUCH AMOUNTS ARE IN LAW RECEIVED BY THE ASSE SSEE ONLY IN THE YEAR WHICH THEY ARE PAID. 10. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSEE HAS BEEN FOLLOWING CONSISTENT METHOD OF PRACTICE AND RIGHT TO ACCRUE THE INCOME HAD ARISEN IN THE FOLLOWING YEAR WHICH HAS BEEN CHARGED IN THE FOLLOWING YEAR ITA NO.299(ASR)/2013 20 WHICH IS NOT UNDER DISPUTE. THEREFORE, THE LD. CIT( A) IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE A.O. ACCORDINGLY, THE AO IS DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE. HENCE, GROUND NO.2 OF TH E ASSESSEE IS ALLOWED. 11. GROUNDS NO. 3 & 4 ARE GENERAL IN NATURE, THEREF ORE, DO NOT REQUIRE ANY ADJUDICATION. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.299(ASR)2013 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26TH AUGUST, 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26TH AUGUST, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:THE FAZILKA CENTRAL CO-OP BANK LTD. H. O.ABOHAR. 2. THE DCIT,CIR.II, BATHINDA. 3. THE CIT(A), BATHINDA 4. THE CIT, BATHINDA. 5.THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER