BIJAYNAGR KRAYA VIKRYA SAHAKARI SAMITI LTD., Jaipur V. PRINCIPAL CIT, Ajmer

ITA 330/JPR/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2115 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 06-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VARINDAR MEHTA
• Keywords: Business income; Audit objection; Diversion of income; Rule of consistency; Difference of opinion; Assessment record; Change of opinion; Borrowed satisfaction
• Section: 143(3); 37(1); 37; 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA -@ ITA. NO. 330/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2012-13 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR CUKE VS. THE ITO, WARD-1, BEAWAR LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AAAAB0505A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPON DENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VARINDAR MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 11/01/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 05/02/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. PR. CIT, AJMER DATED 14.03.2016 FOR ASSESSMENT YEAR 2012-13 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. PR. CIT, AJMER ERRED IN LAW AS WELL AS ON THE FACT OF THE CASE IN INVOKING THE PROVISIONS OF SEC. 263 OF THE ACT HOLDING THE ASSESSMENT ORDER DATED 13.12.2013 TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE WHICH IS CONTRARY TO THE PROVISIONS OF LAW AND FACTS THEREFORE, THE IMPUGNED ORDER U/S 263 OF THE ACT DATED 14.03.2016 KINDLY BE QUASHED. ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 2 2. THE LD. PR. CIT AJMER ERRED IN LAW AS WELL AS ON THE FACT OF THE CASE IN WRONGLY SETTING ASIDE THE ASSESSMENT ORDER DT. 13.12.2013 DESPITE THERE BEING SPECIFIC FINDING GIVEN BY THE ASSESSING OFFICER AND ALSO MERELY PROCEEDING ON A CHANGE OF OPINION, AND ALSO IGNORING THE SETTLED PAST HISTORY, BASED ON WHICH, ASSUMPTION OF JURISDICTION U/S 263 IS NOT PERMISSIBLE. THE IMPUGNED ORDER DT. 14.03.2016 THEREFORE, LACKS VALID JURISDICTION U/S 263 OF THE ACT AND HENCE, THE SAME KINDLY BE QUASHED. 3. THE LD. PR. CIT, AJMER ERRED IN LAWS AS WELL AS ON THE FACT OF THE CASE IN MISINTERPRETING THE PROVISION OF U/S 40A(9) OF THE ACT BY HOLDING THAT THE CLAIM OF THE ASSESSEE BY TRANSFERRING THE FUNDS TO THE GENERAL RESERVE, EDUCATION RESERVE AND TOWARDS GRATUITY FUND (WHICH WERE PAID TO COMPLY WITH THE SPECIFIC REQUIREMENT OF THE RELEVANT LAW, GOVERNING THE APPELLANT CO- OPERATIVE SOCIETY), WERE NOT ALLOWABLE CLAIMS. THE DEDUCTION SO CLAIMED WAS FULLY ALLOWABLE U/S 40A (9) AND/OR, IN ANY CASE, U/S 37 (1) OF THE ACT AND HENCE, WERE RIGHTLY ALLOWED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER DATED 13.12.2013. THEREFORE, THE DISALLOWANCE SO MADE BY THE LD. PR. CIT IN THE IMPUGNED ORDER U/S 263 OF THE ACT BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS KINDLY BE DELETED FULL. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT ASSESSEE IS A CO-OPERATIVE SOCIETY REGISTERED UNDER THE RAJASTHAN CO-OPERATIVE SOCIETY ACT, 2001. THE ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 05.12.2013 AND DECLARED INCOME OF RS. 54,920/- WAS ACCEPTED BY THE ASSESSING OFFICER. SUBSEQUENTLY, THE REVENUE AUDIT RAISED AN OBJECTION THROUGH MEMO DATED 26.05.2014 THAT THE FOLLOWING AMOUNTS ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 3 DEBITED IN THE PROFIT AND LOSS ACCOUNT SHOULD HAVE BEEN DISALLOWED AS IT WAS NOT AN ALLOWABLE EXPENDITURE:- GENERAL RESERVE - RS. 3,77,566/- EDUCATION RESERVE - RS. 15,103/- PROVISION FOR GRATUITY RS. 81,376/- RS. 4,74,045/- 3. AS PER LD PR CIT, ON PERUSAL OF THE ABOVE ASSESSMENT RECORDS, IT REVEALS THAT THE TOTAL RESERVE DEBITED IN THE PROFIT AND LOSS ACCOUNT OF RS. 4,74,045/- WAS NOT ALLOWABLE EXPENDITURE U/S 37 OF THE ACT BUT SINCE THE SAME WAS ALLOWED WHILE PASSING THE ASSESSMENT YEAR U/S 143(3), THE ASSESSMENT YEAR WAS CONSIDERED ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND A SHOW CAUSE NOTICE DATED 12.01.2016 WAS ISSUED TO THE ASSESSEE. 4. IN RESPONSE, THE ASSESSEE SUBMITTED THAT IT IS REGISTERED WITH REGISTRAR OF COOPERATIVE SOCIETIES JAIPUR/ AJMER UNDER THE RAJASTHAN COOPERATIVE SOCIETIES ACT, 2001. AS PER SECTION 43 AND 48 OF THIS ACT, EVERY SOCIETY IS BOUND TO CREATE ANY YEAR 25% OF ITS PROFITS TO GENERAL RESERVE FUND AND 1% OUT OF ITS PROFITS FOR CREATION OF EDUCATION RESERVE FUND AS PER BY LAWS OF THE SOCIETY, OTHERWISE THE REGISTRAR OF SOCIETY WILL TAKE NECESSARY ACTION AGAINST THE DEFAULTER SOCIETY. THUS RS. 3,77,566/- AND RS. 15,103/- HAVE BEEN RIGHTLY TRANSFERRED TO GENERAL RESERVE AND EDUCATION FUND A/C. FURTHER RS. 81376/- HAVE BEEN TRANSFERRED TO EMPLOYERS GRATUITY FUND IN VIEW OF THE PROVISIONS OF STATE GOVT. EMPLOYEES SERVICE RULES AND PARTICULARLY FRAMED SERVICE RULES FOR EMPLOYEES OF THE RAJASTHAN COOPERATIVE SOCIETIES FOR THE SAME AS ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 4 AMENDED FORM TIME TO TIME. HENCE, TOTAL RESERVES CREATED FOR RS. 474,075/- IN THE ASSESSMENT YEAR 2012-13 IS ALLOWABLE UNDER THE PROVISIONS OF SECTION 40A (9) OF THE I.T.ACT. 5. THE REPLY OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE LD. PR CIT AND HER FINDINGS ARE REPRODUCED AS UNDER:- THE REPLY OF THE ASSESSEE IS NOT ACCEPTABLE ON FOLLOWING GROUNDS:- (1) THE POINT MADE BY THE ASSESSEE IS THAT THE RESERVES CREATED ON ACCOUNT OF GENERAL RESERVE, EDUCATION RESERVE AND ALSO THE PROVISION FOR GRATUITY ARE ALLOWABLE EXPENDITURE WITHIN THE PROVISION OF SECTION 40A(9). IT HAS ALSO BEEN ARGUED THAT THE RESERVES WERE MADE AS PER THE STATUTORY REQUIREMENTS OF THE RAJASTHAN COOPERATIVE SOCIETIES ACT 2001. SECTION 40A(9) IS QUOTED BELOW: (9) NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF ANY SUM PAID BY THE ASSESSEE AS AN EMPLOYER TOWARDS THE SETTING UP OR FORMATION OF, OR AS CONTRIBUTION TO, ANY FUND, TRUST, COMPANY, ASSOCIATION OF PERSONS, BODY OF INDIVIDUAL, SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 (21 OF 1860), OR OTHER INSTITUTION FOR ANY PURPOSE, EXCEPT, WHERE SUCH SUM IS SO PAID, FOR THE PURPOSES AND TO THE EXTENT PROVIDED BY OR UNDER CLAUSE (IV) OR CLAUSE (IVA) OR CLAUSE (V) OF SUB-SECTION (1) OF SECTION 36, OR AS REQUIRED BY OR UNDER ANY OTHER LAW FOR THE TIME BEING IN FORCE. THE POINT OF THE ASSESSEE THAT THE RESERVES CREATED U/S 43 & 48 OF THE RAJASTHAN COOPERATIVE SOCIETIES ACT 2001, QUALIFY FOR DEDUCTION IN THE INCOME TAX ACT, IS NOT TENABLE BECAUSE SECTION ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 5 40A(9) SPECIFIES THE FUNDS CONTRIBUTION TO WHICH BY THE ASSESSEE AS AN EMPLOYER CAN QUALIFY FOR DEDUCTION. AS PER SECTION 40A(9) ANY SOME PAID/CONTRIBUTED BY A SOCIETY REGISTERED UNDER THE SOCIETY REGISTRATION ACT, 1860 SHALL ONLY BE ALLOWABLE AS A DEDUCTION WHERE SUCH SOME IS SO PAID, FOR THE PURPOSE MENTIONED IN CLAUSE (IV) OR (IVA) OR (V) OF SUB-SECTION 1 OF SECTION 36 (1) (IV), OR AS REQUIRED BY OR UNDER ANY OTHER LAW FOR THE TIME BEING IN FORCE. SECTION 36(1) (IV), (IVA) & (V) PERTAINS TO CONTRIBUTION TOWARDS RECOGNIZED PROVIDENT FUND OR AN APPROVED SUPERANNUATION FUND, CONTRIBUTION TOWARDS A PENSION SCHEME AND CONTRIBUTION TOWARDS AN APPROVED GRATUITY FUND RESPECTIVELY. IT DOES NOT ALLOW ANY SOME PAID TOWARDS THE GENERAL RESERVES AND THE EDUCATION RESERVE. OR AS REQUIRED BY ANY OTHER LAW UNDER FORCE MENTIONED IN SECTION 40A(9) HAS BEEN MISINTERPRETED BY THE ASSESSEE. ANY OTHER LAW UNDER FORCE MEANS ANY OTHER LAW UNDER FORCE APPLICABLE TO THE ASSESSEE AS AN EMPLOYER WITH RESPECT TO THE SPECIFIC FUNDS (PROVIDENT FUND/SUPERANNUATION FUND; PENSION SCHEME; APPROVED GRATUITY FUND) (2) THE RAJASTHAN CO-OPERATIVE SOCIETY ACT ONLY ALLOWS CREATION OF RESERVE BUT DOES NOT OVER RULE THE PROVISIONS OF I.T.ACT WHEREIN ACTUAL EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS IS ALLOWABLE NOT ANY RESERVE OR PROVISION WHICH IS ONLY ACCUMULATION OF INCOME. ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 6 5. IN VIEW OF THE ABOVE DISCUSSION THE ORDER PASSED U/S 143(3) OF THE I.T. ACT, 1961 DATED 13.12.2013 IS HELD ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND IS RESTORED BACK TO THE FILE OF THE AO, FOR ADDING BACK THE GENERAL RESERVE, EDUCATION RESERVE AND PROVISION FOR GRATUITY TOTALING TO RS. 4,74,045/- DEBITED IN P&L ACCOUNT AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE. IN CASE THE ASSESSEE IS ABLE TO GIVE THE PROOF THAT THE PROVISION FOR GRATUITY HAS BEEN MADE TO AN APPROVED GRATUITY FUND THEN DEDUCTION U/S 36(1) (V) CAN BE ALLOWED OF RS. 81,376. 6. DURING THE COURSE OF HEARING, THE LD. AR SUBMITTED THAT IT IS A CASE OF CHANGE OF OPINION IN AS MUCH AS THE AO HAS ALREADY APPLIED HIS MIND AND FORMED AN OPINION THAT THE CLAIMED EXPENDITURE/REDUCTION FROM THE INCOME WAS PERMISSIBLE. IT WAS SUBMITTED THAT THE SUBJECT ASSESSMENT WAS COMPLETED U/S 143(3) AFTER MAKING VARIOUS ENQUIRIES AND DUE INVESTIGATION. THE LD. AR APPEARED BEFORE THE AO ON VARIOUS OCCASIONS AND VARIOUS DETAILS, AS DESIRED BY THE AO, WERE FILED. THE AO RAISED DETAILED QUERIES ARISING FROM THE DISCUSSION THROUGH QUERY LETTER AVAILABLE AT APB 28-29 AND THE ASSESSEE REPLIED TO THE SAME VIDE ITS LETTER DATED 28.10.2013 AVAILABLE AT APB 30-32. IN THIS REGARD, THE LD AR DRAWN OUR REFERENCE TO THE FINDINGS OF THE AO CONTAINED IN THE ASSESSMENT ORDER WHICH READS AS UNDER: DURING THE YEAR UNDER CONSIDERATION, THE SOCIETY HAS SHOWN TOTAL TURNOVER OF RS. 10,55,05,974/-. THE TRANSACTIONS ARE CERTIFIED BY THE LOCAL AUDIT AND ASSESSED BY SALES TAX AUTHORITIES AS PER VAT ANNUAL RETURN FURNISHED IN FORM NO. 10A ON 15.03.2013. ON THE ABOVE SALES A GROSS PROFIT OF RS. 28,86,098/- AND NET PROFIT OF RS. 15,10,265/- HAS BEEN SHOWN. ON P&L APPROPRIATION ACCOUNT RS. 377,566/- TRANSFERRED ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 7 TO GENERAL RESERVE AND RS. 15,103/- HAS BEEN TRANSFERRED TO EDUCATION RESERVE ACCOUNT AS PER BY LAWS OF SOCIETY ACT, THEREAFTER INCOME ELIGIBLE FOR INCOME TAX SHOWN AT RS. 11,17,596/-. IN THE P&L ACCOUNT INCOME TAX OF RS. 68,808/- HAS BEEN DEBITED WHICH HAS BEEN ADDED BACK FOR COMPUTATION OF INCOME. THUS A SUM OF RS. 701,331/- HAS BEEN SHOWN AS BUSINESS INCOME FOR THE YEAR. 7. THE LD AR FURTHER SUBMITTED THAT THE ASSESSEE HAS BEEN CLAIMING THESE DEDUCTIONS TOWARDS TRANSFER TO RESERVES SINCE ITS INCEPTION AND THE SAME HAS BEEN ALLOWED AND REFERENCE WAS DRAWN TO THE ASSESSMENT ORDER PASSED FOR IMMEDIATELY PRECEDING YEAR 2006-07 WHEREIN THE SIMILAR DEDUCTION HAS BEEN ALLOWED. IT WAS SUBMITTED THAT THE LD. PR CIT HAS NOT SHOWN ANY SPECIAL REASON OR A NEW GROUND OR MATERIAL CHANGE IN THE LEGAL AND FACTUAL POSITION, WHICH PREVAILED FOR A LONG PERIOD OF 6 YEARS. IT WAS ACCORDINGLY SUBMITTED THAT THIS WAS A CASE OF CHANGE OF OPINION BY THE LD. PR CIT WHO HAS SUBSTITUTED HER OPINION WITH THE OPINION OF THE ASSESSING OFFICER WHICH IS NOT PERMISSIBLE WITHIN THE SCOPE OF SECTION 263. IN SUPPORT, RELIANCE WAS PLACED ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN CASE OF CIT VS. GANPAT RAM BISHNOI (2005) 198 CTR 546 (RAJ) AND CIT VS. RAJASTHAN FINANCIAL CORPORATION (1996) 134 CTR 145 (RAJ). 8. IT WAS FURTHER SUBMITTED THAT ON MERITS, THE CONTENTION OF THE ASSESSEE IS THAT ALL THESE FUNDS WERE TRANSFERRED TO THE RESERVES TO COMPLY WITH THE SPECIFIC AND MANDATORY REQUIREMENTS MADE BY SECTION 43 AND 48 OF THE COOPERATIVE SOCIETIES ACT AND ACCORDINGLY A CLAIM WAS MADE U/S 40A(9) AND/OR 37(1). IT WAS FURTHER SUBMITTED THAT:- 3.2.1 THE OBSERVATION OF THE LD. PR CIT THAT SEC.40A(9) DOES NOT ALLOW ANY SUM PAID TOWARDS GENERAL RESERVE AND THE EDUCATION RESERVE, IS ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 8 DEVOID OF MERIT IN AS MUCH AS SHE HAS COMPLETELY IGNORED THE LATER PART OF THE PROVISION I.E. OR AS REQUIRED BY/OR UNDER ANY OTHER LAW FOR THE TIME BEING IN FORCE', THOUGH SHE TAKES NOTE OF THE SAME AT PG 4 OF HER ORDER. EARLIER PART OF S.40A (9) MIGHT NOT HAVE PERMITTED THE ALLOWANCE OF ANY CONTRIBUTION MADE BY THE ASSESSEE TOWARDS THE GENERAL RESERVE AND EDUCATIONAL RESERVE BUT IT WAS CERTAINLY A REQUIREMENT MADE BY/OR UNDER ANY OTHER LAW. THE LAST LIMB/SECOND EXCEPTION EVEN DOES NOT ENVISAGE A SITUATION THAT THE SUBJECTED AMOUNT MUST HAVE BEEN EXPENDED/LAID OUT BY THE ASSESSEE NECESSARILY IN THE CAPACITY OF AN EMPLOYER. IN OTHER WORDS, EVEN IF IT WAS INCURRED IN THE CAPACITY OTHER THAN EMPLOYER THEN ALSO THE SAME WAS ALLOWABLE. THUS, SUCH OBSERVATION WAS NOTHING BUT A MISINTERPRETATION OF THE PROVISION. 3.2.2 THE LD. PR CIT FURTHER ERRED IN MISINTERPRETING THE PROVISION WHILE OBSERVING THAT THE DEDUCTION U/S 40A(9) WAS ALLOWABLE ONLY W.R.T. THE SPECIFIC FUNDS VIZ PROVIDENT FUND/SUPERANNUATION FUNDS/PENSION SCHEME/APPROVED GRATUITY FUND ETC. IN AS MUCH AS SHE AGAIN IGNORED THE LATER PART OR THE SECOND EXCEPTION CARVED OUT IN SEC.40A(9) TO THE EFFECT THAT DEDUCTION WAS ALLOWABLE EVEN IF IT WAS REQUIRED BY/OR UNDER ANY OTHER LAW FOR THE TIME BEING IN FORCE. 3.2.3 THE LD. PR CIT FAILED TO APPRECIATE THAT THE FIRST PART OF SEC.40A(9) STARTS NEGATIVELY AND WHILE DISALLOWING CERTAIN PAYMENTS BY THE ASSESSEE AS AN EMPLOYER TOWARDS THE SETTING UP FOR FORMATION OR A CONTRIBUTION TO ANY FUND, TRUST, COMPANY ETC BUT TWO EXCEPTION CARVED OUT ARE AS UNDER: (A) WHERE SUCH SUM IF SO PAID FOR THE PURPOSES AND TO THE EXTENT PROVIDED U/S 36(I),(IV),(V) (VI)(I.E. CONTRIBUTION TOWARDS RECOGNIZED PROVIDENT FUND) ETC. APPROVED GRATUITY FUND ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 9 (B) .OR AS REQUIRED BY/OR UNDER ANY OTHER LAW FOR THE TIME BEING IN FORCE 3.3 THE ENTIRE STRESS OF THE LD. PR CIT HAS BEEN ON THE UPPER PART OF SEC.40A(9). THOUGH SHE TOOK NOTE OF THE SECOND EXCEPTION BUT HOWEVER, SHE FAILED TO APPLY THE SAME ON THE FACTS OF THE PRESENT CASE. IT IS PERTINENT TO NOTE THAT THE LD. PR CIT HAS NOWHERE DENIED THAT BY VIRTUE OF SEC.43 AND SEC.48 OF THE RAJASTHAN COOPERATIVE SOCIETIES ACT, 2001, THE APPELLANT SOCIETY WAS OBLIGED TO TRANSFER EVERY YEAR, 25% OF ITS PROFITS TO GENERAL RESERVE FUND AND 1% TO EDUCATION RESERVE FUND AS PER BY LAWS OF THE SOCIETY, FAILING WHICH THE REGISTRAR OF SOCIETY WOULD TAKE NECESSARY ACTION AGAINST THE DEFAULTER SOCIETY. ACCORDINGLY, THIS YEAR THE ASSESSEE WAS DIRECTED TO TRANSFER SUCH FUNDS AS REQUIRED BY THE DEPUTY REGISTRAR COOPERATIVE SOCIETY, BEAWAR VIDE ORDER DATED 27.04.2014 PERMITTING THE ASSESSEE TO TRANSFER 25% TO GENERAL RESERVE AND 1% TO EDUCATION RESERVE AS PER THE MANDATORY REQUIREMENT VIDE LETTER NO. 1099-1101 (PB- 53). CONSEQUENTLY, RS.3,77,566/- AND RS. 15,103/- WERE RIGHTLY TRANSFERRED TO GENERAL RESERVE AND EDUCATION FUND A/C. FURTHER RS.81,376/- HAVE BEEN TRANSFERRED TO EMPLOYERS GRATUITY FUND IN VIEW OF THE PROVISIONS OF STATE GOVT. EMPLOYEES SERVICE RULES PARTICULARLY FRAMED FOR EMPLOYEES OF THE RAJASTHAN CO-OPERATIVE SOCIETIES NAMELY LGDKJH MIHKKSDRK GKSYLSY HK.MKJKSA ,OE ; FO; LGDKJH LFEFR;KSA DS DEZPKFJ;KSA DS FY, LSOK FU;E] 2013 FOR THE SAME AS AMENDED FROM TIME TO TIME. HENCE, TOTAL RESERVES CREATED FOR RS. 4,74,075/- IN THE AY 2012-13 IS ALLOWABLE UNDER THE PROVISIONS OF S. 40A (9) OF THE IT ACT. 3.4 HER ONLY OBJECTION WAS THAT THE PROVISION OF THE SAID ENACTMENT ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 10 ONLY ALLOWS CREATION OF RESERVE BUT DOES NOT OVERRULED THE PROVISIONS OF IT ACT .. WHICH IS AGAIN A MISCONCEPTION AND A CLEAR MISINTERPRETATION OF THE RELATED PROVISION IN AS MUCH AS, SHE IGNORED THE SECOND EXCEPTION THAT SUCH EXPENDITURE WAS OTHERWISE FULLY ALLOWABLE IF INCURRED AS REQUIRED BY/OR UNDER ANY OTHER LAW FOR THE TIME BEING IN FORCE, WHICH WAS NOT TO BE GOVERNED BY THE UPPER PART OF THE PROVISION BEING AN EXCEPTION CARVED OUT FROM THE GENERALLY OF THE MAIN PROVISION OF THE SEC. 40A(9). 3.5 THE FACT WHETHER THE GRATUITY FUND IS APPROVED OR NOT IS IRRELEVANT. ALTERNATIVELY, THE SAME IS OTHERWISE ALLOWABLE U/S 37(1) OF THE ACT. FOR THIS KINDLY, REFER TATA IRON AND STEEL CO. LTD. VS. D.V. BAPAT ITO (1975) 101 ITR 292, WHEREIN THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF METAL BOX COMPANY OF INDIA LTD WAS FOLLOWED WHEREIN IT WAS HELD THAT THE AMOUNT PAID TOWARDS AN UNAPPROVED GRATUITY FUND CAN BE DEDUCTED U/S 37 OF THE IT ACT, THOUGH NOT U/S 36(1)(V). OUR SUBMISSION IS ALSO SUPPORTED BY A DIRECT DECISION IN THE CASE OF ACIT VS KRISHNA PHARMACEUTICALS LTD. IN ITA NO. 1891/HYD/2011 DATED 12.07.2012. ALSO KINDLY REFER MAHARASHTRA STATE WAREHOUSING CORPORATION V/S DCIT (2013) 24 ITR (TRIB) 0595 (PUNE TRIB.) WHEREIN ALSO, CONTRIBUTION MADE TOWARDS KARAMCHARI WELFARE FUND AS PER THE REQUIREMENT OF WAREHOUSING CORPORATION ACT, 1962 WAS ALLOWED U/S 40A(9) WHICH WAS ALLOWED TO THE ASSESSEE EARLIER ALSO. 4. ALTERNATIVELY, ALL THE SUBJECTED AMOUNTS IF TREATED EXPENDITURE WERE ALLOWABLE U/S 37(1) OF THE ACT IN AS MUCH AS THERE IS NO DISPUTE THAT THE ENTIRE PAYMENT WAS MADE WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS. ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 11 5.1 DIVERSION OF INCOME BY OVERRIDING TITLE: IT IS SUBMITTED THAT THE TRANSFER TO GENERAL RESERVE, EDUCATION RESERVE AND PROVISIONS FOR GRATUITY, ARE IN FACT A CHARGE UPON THE INCOME/ PROFIT OF THE ASSESSEE IN AS MUCH AS BY/UNDER THE RELEVANT LAW, IT HAS BEEN MADE BINDING UPON THE APPELLANT SOCIETY TO TRANSFER ITS CONTRIBUTIONS AS REQUIRED IN THE RELEVANT LAW WITHOUT WHICH THEY MAY LOSE THEIR STATUS OF BEING A COOPERATIVE SOCIETY AND THUS, SUCH CONTRIBUTIONS ARE A ESSENTIAL PART OF THE COST AND THE INCOME TO THAT EXTENT IS DIVERTED BEFORE IT REACHES TO THE ASSESSEE. THEREFORE, EVEN SUCH CONTRIBUTIONS ARE MADE OUT OF THE PROFIT YET HOWEVER, THE SAME ARE STATUTORY LIABILITIES AND HAD AND OVERRIDING CHARGE OVER THE INCOME/PROFIT OF THE ASSESSEE. LOOKING THE MATTER FROM THIS ANGLE, IT SEEMS THAT SUCH CONTRIBUTION WERE RIGHTLY REDUCED AND CLAIMED OUT OF THE TAXABLE PROFIT OF THE SOCIETY. IN FACT, SUCH CONTRIBUTIONS ARE NOT ESSENTIALLY EXPENDITURE BUT THE INCOME TO THAT EXTENT DOES NOT AT ALL BECOME THE INCOME OF THE ASSESSEE SOCIETY AND THEREFORE, HAS TO BE ESSENTIALLY REDUCED FROM ITS INCOME. IN SUPPORT, RELIANCE WAS PLACED ON CIT VS. PANDAVAPURA SAHAKARA SAKKARE KARKHANE LTD. (1988) 174 ITR 0475 (KAR) AND KESHKAL COOPERATIVE MARKETING SOCIETY LTD. V/S CIT (1987) 165 ITR 437 (MP). 6. IT WAS FURTHER SUBMITTED THAT ACTION U/S 264 IS NOT PERMISSIBLE MAINLY ON AUDIT OBJECTION. IT WAS SUBMITTED THAT:- 6.1 THE LAW IS WELL SETTLED THAT FOR A VALID ASSUMPTION OF JURISDICTION U/S 263, THE LD. CIT IS REQUIRED TO APPLY HIS OWN MIND AFTER EXAMINING THE RECORD OF THE PROCEEDINGS AND ONLY AFTER RECORDING HIS SATISFACTION, HE MAY INVOKE S. 263. SUCH APPLICATION OF MIND AND SATISFACTION MUST BE OF THE CIT ALONE AND OF NONE OTHER. HOWEVER, THIS PREREQUISITE HAS NOT BEEN FULFILLED IN THE PRESENT CASE IN AS MUCH AS THE LD. CIT HERSELF ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 12 HAS ADMITTED IN THE IMPUGNED ORDER BY REFERRING TO AN AUDIT OBJECTION. THUS, IT IS ONLY PURSUANT TO AND WITH A VIEW TO GIVE EFFECT TO THE AUDIT OBJECTION, THE IMPUGNED PROCEEDING U/S 263 WERE INITIATED AND THIS, IN TURN, PROVES THAT THERE WAS NO APPLICATION OF MIND BY THE ID. CIT AS REQUIRED BY LAW HENCE, THE IMPUGNED ORDER KINDLY BE QUASHED BEING WITHOUT JURISDICTION. 6.2 THE LAW U/S 263 SPECIFICALLY REQUIRES THAT BEFORE TAKING ANY ACTION, THE CIT HIMSELF SHALL APPLY HIS MIND AND AFTER EXAMINING THE RECORD OF ANY PROCEEDING, IF SATISFIED THAN ONLY HE HAS TO PROCEED. IT CANNOT BE THE SATISFACTION OF ANY OTHER AUTHORITY THAN THE CIT HIMSELF. THUS, THERE HAS TO BE AN INDEPENDENT APPLICATION OF MIND BY THE ID. CIT HIMSELF FIRST, AFTER CALLING FOR AND EXAMINING THE RECORD. IN THE PRESENT CASE HOWEVER, THERE IS ABSOLUTELY NO WHISPER THAT LD. CIT CALLED FOR AND EXAMINED THE ASSESSMENT RECORD OF THE SUBJECTED YEAR AND APPLIED HIS MIND INDEPENDENTLY SO AS TO SATISFY HIMSELF/TO CONSIDER EVEN REMOTELY TO INITIATE THE PROCEEDINGS. IN THE IMPUGNED ORDER ITSELF, IT IS STATED THAT IT WAS ONLY AT THE INSTANCE OF/THE SATISFACTION OF THE REVENUE AUDIT WHICH RAISED THE OBJECTION THROUGH THE MEMO DATED 26.05.2014, THE IMPUGNED PROCEEDINGS HAVE BEEN INITIATED. SUCH A STATE OF AFFAIR WAS NOT CONTEMPLATED BY THE LAW AND THEREFORE, THE VERY ASSUMPTION OF JURISDICTION U/S 263 WAS VOID AB INTIO. IN SUPPORT, RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS: SIRPUR PAPER MILL LTD VS CWT (1970) 77 ITR 6 (SC) DHARMENDRA KUMAR BANSAL VS. CIT (2014) 101 DTR 0377 (JP) CIT VS SOHANA WOLLEN MILLS (2008) 296 ITR 238 (P&H) ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 13 JEEWANLAL (1929) LTD. VS. ADDL. CIT & ORS. (1977) 108 ITR 407 (KOL) SARTAJ SINGH VS PR. CIT (2016) 179 TTJ 0017 (UO)(ASR) JASWINDER SINGH VS. CIT (2013) 31 TAXMANN.COM 80 (CHANDIGARH- TRIB) 9. THE LD DR HAS VEHEMENTLY ARGUED THE MATTER AND RELIED UPON THE ORDER OF THE LD PR CIT. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FIRSTLY, REGARDING THE CONTENTION OF THE LD AR THAT THE AO HAS EXAMINED THE MATTER AFTER VARIOUS ENQUIRIES AND INVESTIGATION AND THEREFORE, IT IS A CASE OF CHANGE OF OPINION, WE HAVE GONE THROUGH THE QUERY LETTER ISSUED BY THE AO DATED 14.10.2013 TO WHICH OUR ATTENTION WAS DRAWN AND AVAILABLE AT APB PG 28-29 AND ALSO THE RESPONSE OF THE ASSESSEE DATED 28.10.2013 AVAILABLE AT APB PG 30- 32 AND WE FIND THAT THERE IS NO SPECIFIC QUERY AND CONSEQUENT SUBMISSION REGARDING GENERAL AND EDUCATION RESERVES AS WELL AS PROVISION FOR GRATUITY WHICH HAS BEEN CLAIMED BY THE ASSESSEE. SECONDLY, OUR ATTENTION WAS DRAWN TO THE ASSESSMENT ORDER PASSED BY THE AO WHEREIN IT IS MENTIONED THAT ON P&L APPROPRIATION ACCOUNT RS. 377,566/- TRANSFERRED TO GENERAL RESERVE AND RS. 15,103/- HAS BEEN TRANSFERRED TO EDUCATION RESERVE ACCOUNT AS PER BY LAWS OF SOCIETY ACT. TO OUR MIND, THE AO HAS MERELY REPRODUCED THE ACCOUNTING ENTRIES BY WAY OF TRANSFER TO GENERAL RESERVE AND THE EDUCATION RESERVE AS REFLECTED IN THE PROFIT/LOSS APPROPRIATION ACCOUNT. THE SAME CANNOT BE READ AND UNDERSTOOD TO MEAN THAT THE AO HAS EXAMINED THE ALLOWABILITY OF THESE RESERVE TRANSFERS FROM THE PERSPECTIVE OF ALLOWABILITY FOR TAX PURPOSES. IN CONTRAST, IF WE SEE THE CLAIM OF DEDUCTION UNDER SECTION ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 14 80P, THE AO, IN SUBSEQUENT PARAGRAPH, HAS STATED THAT IN COMPUTATION OF TOTAL INCOME, THE ASSESSEE SOCIETY HAS CLAIMED DEDUCTION U/S 80P OF I.T. ACT AMOUNTING TO RS. 1095909/- UNDER VARIOUS SUB PROVISIONS. VARIOUS CLAIMS RESERVES AND DEDUCTIONS HAVE BEEN TEST CHECKED. NO. DISCREPANCY HAS BEEN NOTICE. THEREFORE DEDUCTION CLAIMED UNDER CHAPTER VIA TO THE TUNE OF RS. 1095909/- IS THEREFORE ALLOWABLE FOR THE YEAR UNDER CONSIDERATION. THIS SHOWS CLEARLY THAT CLAIM OF DEDUCTION UNDER SECTION 80P HAS BEEN EXAMINED AND THEREAFTER, IT HAS BEEN ALLOWED. WE ARE THEREFORE OF THE VIEW THAT IN ABSENCE OF ANY SPECIFIC QUERY/DISCUSSION/EXAMINATION BY THE AO AND IN ABSENCE OF ANY SPECIFIC FINDING IN THE ASSESSMENT ORDER AS HAVING EXAMINED THE CLAIM OF THE ASSESSEE REGARDING GENERAL AND EDUCATION RESERVE AND THE PROVISION FOR GRATUITY, IT CANNOT BE SAID THAT THERE IS A CHANGE OF OPINION WHEN SUCH AN OPINION HAS NOT BEEN FORMED AT THE FIRST PLACE. THEREFORE, WE ARE UNABLE TO ACCEDE TO THE CONTENTION OF THE LD AR REGARDING CHANGE IN OPINION. 11. IT IS A CASE WHERE WE FIND THAT THERE IS NO DUE AND PROPER APPLICATION OF MIND BY THE AO. THE AO HAVING REPRODUCED THE ENTRIES OF GENERAL AND EDUCATION RESERVE AS APPEARING IN THE PROFIT/LOSS APPROPRIATION ACCOUNT, SHOULD HAVE APPLIED HIS MIND TO DETERMINE FIRSTLY, WHETHER THE ENTRIES IN THE PROFIT/LOSS APPROPRIATION ACCOUNT, WHICH ARE BELOW-THE-LINE ENTRIES IN THE ACCOUNTING PARLANCE, ARE ALLOWABLE AT FIRST PLACE IN THE HANDS OF THE ASSESSEE AND SECONDLY, WHAT IS THE NATURE AND PURPOSE OF THESE RESERVE AND HOW THE SAME ARE ALLOWABLE AND UNDER WHAT PROVISIONS OF THE ACT. THE CONTENTION OF THE LD AR THAT THESE ARE ALLOWABLE ALTERNATIVELY UNDER SECTION 40A(9) OR UNDER 37(1) OR THE SAME ARE DIVERGENT OF INCOME BY OVERRIDING TITLE ARE ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 15 PRECISELY THE MATTERS WHICH THE AO SHOULD HAVE ORDINARILY EXAMINED IN THE REGULAR COURSE OF ASSESSMENT PROCEEDINGS WHICH THE AO HAS FAILED IN THE INSTANT CASE. THE SAME WOULD HAVE BEEN POSSIBLE HAD THE AO EXAMINED THE MATTER AT FIRST PLACE WHICH THE AO HAS FAILED IN THE INSTANT CASE. IT IS CLEARLY A CASE OF NON-EXAMINATION AND NON-APPLICATION OF MIND BY THE AO AND THE ORDER OF THE AO IS CLEARLY ERRONEOUS TO THIS EXTENT. 12. NOW COMING TO ANOTHER CONTENTION OF THE LD AR THAT THE LD. PR CIT HAS NOT SHOWN ANY SPECIAL REASON OR A NEW GROUND OR MATERIAL CHANGE IN THE LEGAL AND FACTUAL POSITION, WHICH PREVAILED FOR A LONG PERIOD OF 6 YEARS WHERE THE ASSESSEE HAS BEEN CLAIMING THESE DEDUCTIONS TOWARDS TRANSFER TO RESERVES SINCE ITS INCEPTION AND THE SAME HAS BEEN ALLOWED AND REFERENCE WAS DRAWN TO THE ASSESSMENT ORDER PASSED FOR ASSESSMENT YEAR 2006-07 WHEREIN THE SIMILAR DEDUCTION HAS BEEN ALLOWED. IN THIS REGARD, WE FIND THAT THE LD PR CIT HAS GIVEN A CLEAR REASONING AND FINDING IN HER ORDER AS TO WHY THE PROVISIONS OF SECTION 40A(9) ARE NOT ATTRACTED IN THE INSTANT CASE AND HER FINDINGS ARE REPRODUCED AS UNDER: THE POINT OF THE ASSESSEE THAT THE RESERVES CREATED U/S 43 & 48 OF THE RAJASTHAN COOPERATIVE SOCIETIES ACT 2001, QUALIFY FOR DEDUCTION IN THE INCOME TAX ACT, IS NOT TENABLE BECAUSE SECTION 40A(9) SPECIFIES THE FUNDS CONTRIBUTION TO WHICH BY THE ASSESSEE AS AN EMPLOYER CAN QUALIFY FOR DEDUCTION. AS PER SECTION 40A(9) ANY SOME PAID/CONTRIBUTED BY A SOCIETY REGISTERED UNDER THE SOCIETY REGISTRATION ACT, 1860 SHALL ONLY BE ALLOWABLE AS A DEDUCTION WHERE SUCH SOME IS SO PAID, FOR THE PURPOSE MENTIONED IN CLAUSE (IV) OR (IVA) OR (V) OF SUB-SECTION 1 OF SECTION 36 (1) ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 16 (IV), OR AS REQUIRED BY OR UNDER ANY OTHER LAW FOR THE TIME BEING IN FORCE. SECTION 36(1) (IV), (IVA) & (V) PERTAINS TO CONTRIBUTION TOWARDS RECOGNIZED PROVIDENT FUND OR AN APPROVED SUPERANNUATION FUND, CONTRIBUTION TOWARDS A PENSION SCHEME AND CONTRIBUTION TOWARDS AN APPROVED GRATUITY FUND RESPECTIVELY. IT DOES NOT ALLOW ANY SOME PAID TOWARDS THE GENERAL RESERVES AND THE EDUCATION RESERVE. OR AS REQUIRED BY ANY OTHER LAW UNDER FORCE MENTIONED IN SECTION 40A(9) HAS BEEN MISINTERPRETED BY THE ASSESSEE. ANY OTHER LAW UNDER FORCE MEANS ANY OTHER LAW UNDER FORCE APPLICABLE TO THE ASSESSEE AS AN EMPLOYER WITH RESPECT TO THE SPECIFIC FUNDS (PROVIDENT FUND/SUPERANNUATION FUND; PENSION SCHEME; APPROVED GRATUITY FUND). 13. IT IS THEREFORE NOT A CASE WHERE THE LD PR CIT HAS NOT STATED HER REASONING FOR TAKING A VIEW IN THE SUBJECT MATTER. IT MAY SO HAPPEN THAT SUCH A VIEW MAY BE AT VARIANCE TO THE PAST ASSESSMENT YEARS AS CLAIMED BY THE LD AR. THE QUESTION IS WHETHER THE SAID ISSUE WAS EXAMINED IN THE PAST OR NOT BY THE REVENUE AUTHORITIES. WHERE THE SAID ISSUE WAS EXAMINED IN THE CONTEXT OF SECTION 40A(9) IN THE PAST AND NOW, THERE IS A CHANGE IN THE VIEW, WE AGREE THAT UNLESS THERE IS CHANGE IN LAW OR MATERIALLY DIFFERENT FACTS, THE VIEW ADOPTED IN THE PAST SHOULD NOT NORMALLY BE DISTURBED. HOWEVER, IN THE INSTANT CASE, WE DONOT FIND ANYTHING ON RECORD TO SUGGEST THAT THE ISSUE HAS BEEN EXAMINED IN THE PAST FROM THE PERSPECTIVE OF SECTION 40A(9). HENCE, THE ABOVE SAID CONTENTION OF THE LD AR REGARDING RULE OF CONSISTENCY CANNOT BE ACCEPTED. ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 17 14. REGARDING THE CONTENTION OF THE LD AR THAT THE ACTION UNDER SECTION 263 IS NOT PERMISSIBLE MERELY ON AUDIT OBJECTION, WE REFER TO THE PROVISIONS OF SECTION 263 WHICH PROVIDES THAT THE LD PR CIT MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDINGS UNDER THIS ACT. THE TERM RECORD HAS BEEN DEFINED AS TO INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE INCLUDED ALL RECORDS RELATING TO ANY PROCEEDINGS UNDER THIS ACT AVAILABLE AT THE TIME OF EXAMINATION BY THE PR CIT. IN THE INSTANT CASE, IT IS NOT DISPUTED THAT THE REVENUE AUDIT MEMO IS PART OF THE RECORDS. THE PR CIT HAS EXAMINED THE ASSESSMENT RECORDS AS WELL AS REVENUE AUDIT MEMO AVAILABLE ON RECORD AND AFTER EXAMINING THE SAME AND PROVIDING A DETAILED REASONING IN THE REVISION ORDER COME TO A CONCLUSION THAT THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IT IS THEREFORE NOT A QUESTION OF BORROWED SATISFACTION ON THE PART OF THE LD PR CIT WHEREIN MERELY ON ACCOUNT OF REVENUE AUDIT MEMO, SHE HAS INITIATED THE PROCEEDINGS UNDER SECTION 263. RATHER SHE HAS EXAMINED THE RECORDS AND INDEPENDENTLY APPLIED HER MIND AND HAS COME TO A CONCLUSION THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE DECISIONS RELIED UPON BY THE LD AR ARE RENDERED IN THE PECULIAR FACTS OF THE CASE AND ARE DISTINGUISHABLE. 15. REGARDING THE ARGUMENTS OF THE LD AR ON MERIT REGARDING ALLOWABILITY UNDER SECTION 40A(9), SECTION 37(1) AND DIVERSION BY OVERRIDING TITLE, WE BELIEVE THAT THE SAME CAN BE EXAMINED BY THE AO AND THE ASSESSEE SHALL BE FREE TO RAISE THE SAME BEFORE THE AO. TO THIS EXTENT, WE MODIFY THE DIRECTIONS OF THE LD PR CIT AND THE SAME SHOULD BE READ TO THE EFFECT THAT CLAIM OF THE ASSESSEE REGARDING THE CLAIM OF THE DEDUCTION TOWARDS THE TRANSFER TO GENERAL RESERVE, EDUCATION ITA NO. 330/JP/2016 M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR. VS. ITO, BEAWAR 18 RESERVE AND THE PROVISIONS FOR GRATUITY SHOULD BE EXAMINED AFRESH AS PER LAW AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISPOSED OFF WITH ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 05/02/2018. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 05/02/2018. * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S BIJAYNAGAR KRAYA VIKRYA SAHAKARI SAMITI LTD., BIJAYNAGAR 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-02, ALWAR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 330/JP/2016} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR