South Indian Bank Ltd, Trichur V. ACIT, Trichur

ITA 480/COCH/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2578 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 30-01-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 13-06-2011
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR; SUSAN GEORGE VARGHESE
• Assessee Lawyers: MOHAN PULICKAL
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NOS. 479 & 480/COCH/2011 ASSESSMENT YEARS : 2003-04 & 2004-05 THE SOUTH INDIAN BANK LTD., SIB HOUSE, MISSION QUARTERS, THRISSUR-1 [PAN: AABCT 0022F] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), THRISSUR. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI MOHAN PULICKAL, ADV. REVENUE BY SMT. SUSAN GEORGE VARGHESE, SR. DR AND SHRI M. ANIL KUMAR, CIT(DR) DATE OF HEARING 26/03/2013 DATE OF PRONOUNCEMENT 12/06/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST DISTINCT ORDERS PASSED BY THE LD. CIT(A)-V, KOCHI AND THEY RELATE TO THE ASSESSME NT YEARS 2003-04 AND 2004-05. SINCE THESE APPEALS WERE HEARD TOGETHER, THEY ARE B EING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ASSESSMENT YEAR 2003-04, THE ASSESSEE IS CONT ESTING FOLLOWING ISSUES BEFORE US: (A) DISALLOWANCE OF PENSION PAID : RS. 3,78,87,559 /-. (B) DISALLOWANCE OF NON-PERFORMING INVEST MENTS WRITTEN OFF : RS. 3,13,11,800/-. (C) CHARGEABILITY OF INTEREST U/S. 220(2) : RS. 1,8 9,282/-. (D) INTEREST LEVIED U/S. 234D. I.T.A. NOS. 479 & 480/COCH/2011 2 3. THE FIRST ISSUE RELATES TO THE DISALLOWANCE OF C LAIM OF PENSION PAYMENT OF RS.3,78,87,559/- MADE TO THE RETIRED EMPLOYEES OF T HE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE IS HAVING PENSION FUND NAMED THE SOUTH INDIAN BANK LTD. EMPLO YEES PENSION FUND, WHICH WAS ALSO APPROVED UNDER THE INCOME TAX ACT. THE ASSESS EE WAS ALSO CLAIMING DEDUCTION U/S. 36(1)(IV) OF THE ACT IN RESPECT OF PROVISION C REATED FOR CONTRIBUTION TO THE ABOVE SAID PENSION FUND. IN ADDITION TO THE ABOVE CONTRI BUTION, THE ASSESSEE HAS CLAIMED DEDUCTION OF PENSION PAYMENTS MADE DIRECTLY TO THE RETIRED EMPLOYEES U/S. 37 OF THE ACT. THE ASSESSING OFFICER TOOK THE VIEW THAT THE DEDUCTION OF AN EXPENSE U/S 37 CAN BE CLAIMED ONLY IF IT IS NOT ALLOWABLE UNDER SECTIO NS 30 TO 43A OF THE ACT. SINCE THE ASSESSEE HAS CLAIMED CONTRIBUTION MADE TO THE PENSI ON FUND AND CLAIMED DEDUCTION U/S 36(1)(VI) OF THE ACT, THE ASSESSING OFFICER TOOK TH E VIEW THAT THE CLAIM OF PENSION PAID DIRECTLY TO THE RETIRED EMPLOYEES CANNOT BE AGAIN A LLOWED U/S 37 OF THE ACT. ACCORDINGLY, HE DISALLOWED THE CLAIM OF PENSION PAY MENTS MADE TO THE RETIRED EMPLOYEES. THE LD. CIT(A) HAS ALSO CONFIRMED THE S AID DISALLOWANCE. 4. THE LD. COUNSEL APPEARING FOR THE ASSESSEE SUBMI TTED THAT THE TAX AUTHORITIES HAVE NOT PROPERLY UNDERSTOOD THE NATURE OF CLAIM MA DE BY THE ASSESSEE AND HENCE THEY HAVE TREATED TWO DIFFERENT CLAIM OF EXPENSES AS ONE AND THE SAME. THE LD A.R SUBMITTED THAT THE DEDUCTION CLAIMED TOWARDS CONTRI BUTION TO PENSION FUND AND THE DEDUCTION CLAIMED TOWARDS ACTUAL AMOUNT OF PENSION PAID DIRECTLY TO THE RETIRED EMPLOYEES ARE TWO DISTINCT CLAIMS. HE FURTHER SUBM ITTED THAT THE PENSION FUND WAS CREATED AFTER AN AGREEMENT WAS REACHED WITH THE EMPL OYEES UNIONS AND ACCORDINGLY, THE ASSESSEE HAS TRANSFERRED FUNDS TO THE PENSION F UND EVERY YEAR AND CLAIMED THE SAME U/S 36(1)(VI) OF THE ACT. HOWEVER, THE CORPUS OF THE PENSION FUND WAS NOT SUFFICIENT ENOUGH TO MEET THE PENSION EXPENDITURE L IABILITY OF THE ASSESSEE AND HENCE, IT WAS CONSTRAINED TO MAKE PENSION PAYMENTS DIRECTLY T O THE RETIRED EMPLOYEES, WHICH IS ALLOWABLE U/S 37 OF THE ACT. HE SUBMITTED THAT THE DIRECT PENSION PAYMENTS CANNOT BE CLAIMED U/S 36(1)(VI) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE FURTHER PLACED RELIANCE ON THE DECISION DATED 12 TH OCTOBER, 2012 RENDERED BY THIS BENCH OF TRIBUNAL I N I.T.A. NOS. 479 & 480/COCH/2011 3 THE CASE OF DHANALAKSHMI BANK IN I.T.A. NOS. 186-18 9/COCH/2011 RELATING TO THE ASSESSMENT YEARS 2000-2001 TO 2003-04 AND SUBMITTED THAT THE TRIBUNAL CONSIDERED AN IDENTICAL ISSUE IN THE ABOVE SAID CASE AND HAS SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE CLAIM OF THE ASSESSEE AFRESH. HE FURTHER SUBMITTED THAT THE TRIBUNAL HAS OBSERVED THAT THE P ENSION PAID TO THE RETIRED EMPLOYEES HAS TO BE ALLOWED AS DEDUCTION IN VIEW OF THE CONTRACTUAL OBLIGATION TO PAY THE PENSION. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO FURNISHED A COPY OF THE ORDER PASSED BY THE TRIBUNAL. 5. ON THE CONTRARY, THE LD D.R STRONGLY PLACED RELIANCE ON THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE. 6. WE HAVE CAREFULLY GONE THROUGH THE ORDER PASSED BY THIS BENCH OF TRIBUNAL IN THE CASE OF DHANALAXMI BANK LTD (REFERRED SUPRA). WE NOTICE THAT THE ASSESSEE IN THAT CASE HAS CLAIMED THAT THE AMOUNT RECEIVED FROM THE PENSION FUND IS CREDITED IN THE PROFIT & LOSS ACCOUNT AND THE AMOUNT OF PENSION GIV EN TO ITS RETIRED EMPLOYEES IS DEBITED TO THE PROFIT & LOSS ACCOUNT. IN THAT SCEN ARIO, THE TRIBUNAL HAS EXPRESSED THE OPINION THAT THE AMOUNT OF PENSION PAID BY THE TAXP AYER HAS TO BE ALLOWED AS DEDUCTION IN VIEW OF THE CONTRACTUAL OBLIGATION TO PAY THE PE NSION. THE OBSERVATIONS MADE BY THE TRIBUNAL IN THE ABOVE SAID CASE IS EXTRACTED BELOW FOR THE SAKE OF CONVENIENCE: 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ONLY ISSUE A RISES FOR CONSIDERATION IS DISALLOWANCE OF PENSION PAID BY THE TAXPAYER TO THE RETIRED EMPLOYEES. THE CONTENTION OF THE LD. DR IS THAT THE TAXPAYER CONTR IBUTE TO THE PENSION FUND AND ALSO PAYS PENSION OF ITS RETIRED EMPLOYEES AND CLAI MS BOTH THE PAYMENTS AS DEDUCTION; THEREFORE, THERE IS DUPLICATION OF PAYME NT. THE EXPLANATION OF THE TAXPAYER APPEARS TO BE THAT THE PENSION IS NOT PAID TO THE RETIRED EMPLOYEE FROM THE FUND. THE PENSION FUND PAYS TO THE TAXPAYER AN D WHAT WAS RECEIVED FROM THE PENSION FUND IS NOT SUFFICIENT ENOUGH TO MEET T HE ENTIRE LIABILITY OF PENSION TO ITS RETIRED EMPLOYEES. THEREFORE, THE AMOUNT OF PE NSION RECEIVED FROM THE PENSION FUND IS CREDITED TO THE PROFIT & LOSS ACCOU NT AND THEREAFTER THE TAXPAYER MAKES PAYMENTS TO ITS RETIRED EMPLOYEES. THEREFORE , THE AMOUNT OF PENSION RECEIVED FROM THE PENSION FUND IS CREDITED IN THE P ROFIT & LOSS ACCOUNT AND WHAT WAS PAID BY THE TAXPAYER IS DEBITED IN THE PROFIT & LOSS ACCOUNT. THEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, THERE IS NO DU PLICATION. THIS TRIBUNAL FINDS THAT IF THE AMOUNT RECEIVED FROM THE PENSION FUND I S CREDITED TO THE PROFIT & LOSS I.T.A. NOS. 479 & 480/COCH/2011 4 ACCOUNT OF THE TAXPAYER AND THEN THE TAXPAYER MAKES THE PAYMENT TO THE RETIRED EMPLOYEES AS PENSION, THEN THERE MAY NOT BE ANY DUP LICATION AT ALL. BUT IT HAS TO BE VERIFIED WHETHER THE AMOUNT RECEIVED FROM THE PE NSION FUND IS CREDITED IN THE PROFIT & LOSS ACCOUNT OR NOT. IT ALSO NEEDS TO BE EXAMINED WHETHER ANY PAYMENT IS MADE TO THE RETIRED EMPLOYEES FROM THE PENSION F UND DIRECTLY. IF NO PAYMENT IS MADE FROM THE PENSION FUND DIRECTLY AND THE ENTI RE AMOUNT RECEIVED FROM THE PENSION FUND IS CREDITED IN THE PROFIT & LOSS ACCOU NT AND THEN THE TAXPAYER MAKES THE PAYMENT TO ITS RETIRED EMPLOYEES BY DEBITING TH E SAME IN THE PROFIT & LOSS ACCOUNT, THEN THE AMOUNT PAID BY THE TAXPAYER AS PE NSION HAS TO BE ALLOWED AS DEDUCTION IN VIEW OF THE CONTRACTUAL OBLIGATION TO PAY THE PENSION. SINCE THESE FACTS WERE NOT EXAMINED BY THE LOWER AUTHORITY, THI S TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE EXAMINED AS TO WHETHER THE AMOUNT RECEIVED FROM THE PENSION FUND IS CREDITED IN THE P ROFIT & LOSS ACCOUNT AND WHETHER THE PENSION FUND AUTHORITIES HAVE MADE ANY PAYMENT DIRECTLY TO THE RETIRED EMPLOYEES. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE MATTER IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE SAME IN THE LIGHT OF OBSERVATIONS MADE BY THIS TRIBUNAL AND THEREAFTER DECIDE THE SAME AFTER GIVING REASONABLE OPPORTUNITY TO THE TAXPAYER. 7. ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, T HE FACTS AND CIRCUMSTANCES PREVAILING IN THAT INSTANT CASE ARE ALSO IDENTICAL WITH THE CASE OF M/S DHANALAKSHMI BANK. WE NOTICE THAT THE TAX AUTHORITIES HAVE NOT EXAMINED THE PRESENT CLAIM OF THE ASSESSEE THAT THERE IS NO DUPLICATION IN THIS REGAR D. HENCE, IN OUR VIEW, THE CLAIM OF THE ASSESSEE NEEDS RE-EXAMINATION AT THE END OF THE ASS ESSING OFFICER IN THE LIGHT OF THE DECISION RENDERED BY THIS BENCH IN THE CASE OF DHAN ALAXMI BANK LTD (REFERRED SUPRA). ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT( A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE ISSUE AFRESH BY DULY CONSIDERING THE FACTS PREVAILING ON THIS IS SUE AND ALSO BY TAKING INTO CONSIDERATION THE DECISION RENDERED BY THE TRIBUNAL IN THE CASE OF DHANALAXMI BANK LTD (REFERRED SUPRA). 8. THE NEXT ISSUE RELATES TO THE DISALLOWANCE OF CL AIM OF WRITING OFF OF NON PERFORMING INVESTMENTS. IT WAS BROUGHT TO OUR NOTI CE THAT AN IDENTICAL ISSUE WAS CONSIDERED BY THIS BENCH OF THE TRIBUNAL IN ASSESSE ES OWN CASE IN I.T.A. NOS. 09 & 10/COCH/2011 AND 149 & 150 /COCH/2011 AND THE TRIBU NAL, VIDE ITS ORDER DATE DATED 18-09-2012, HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION I.T.A. NOS. 479 & 480/COCH/2011 5 RENDERED BY THE HONBLE JURISDICTIONAL HIGH COURT O F KERALA IN THE CASE OF LORD KRISHNA BANK AND NEDUNGADI BANK. WE HAVE GONE THROUGH THE SAID ORDER AND FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE OBSERVATIONS MADE BY THE TRIBUNAL ON AN IDENTICAL ISSUE:- 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ONLY QUESTION ARISES FOR CONSIDERATION IS WHETHER THE NOTIONAL LOSS SAID TO BE SUFFERED BY THE TAXPAYER O N REVALUATION OF THE SECURITIES IS ALLOWABLE AS DEDUCTION OR NOT. THIS ISSUE WAS CONSIDERED BY THE JURISDICTIONAL HIGH COURT IN COMMISSIONER OF INCOME -TAX VS. NEDUNGADI BANK LTD. (SUPRA)(264 ITR 545) AND AFTER CONSIDERING THE JUDICIAL PRONOUNCEMENTS ON THE SUBJECT FOUND THAT SECURITY HELD BY THE BANK CONSTITUTE THEIR STOCK IN TRADE OR INVESTMENT. CONSEQUENTLY, THE LOSS CLAIME D BY THE BANK IN VALUATION OF THEIR SECURITIES SHOULD BE ALLOWED AS DEDUCTION IN COMPUTING THE TAXABLE PROFIT. IN VIEW OF THIS JUDGMENT OF THE KERALA HIG H COURT, THE LOSS SUFFERED BY THE TAXPAYER IN REVALUATION OF THE SECURITIES HAS T O BE ALLOWED AS DEDUCTION. 5. IN THE CASE BEFORE US, THE TAXING AUTHORITY DISA LLOWED THE CLAIM OF THE TAXPAYER ON THE GROUND THAT THE BALANCE-SHEET OF TH E RESPECTIVE COMPANIES WAS NOT FILED TO ESTABLISH THE VALUATION. THE CONTE NTION OF THE TAXPAYER IS THAT THE VALUATION WAS MADE ON THE BASIS OF THE GUIDELIN E ISSUED BY RBI TAKING INTO CONSIDERATION THE REALISABLE VALUE. IN FACT, AS SEEN FROM THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A), THE TAXPAYER CLAIMED THAT THE REVALUATION WAS MADE ON THE BASIS OF THE GUIDELINE ISSUED BY TH E RBI AND THE VALUE IS BASED ON REALISABLE VALUE. THE TAXPAYER HAS ALSO B ROUGHT TO THE NOTICE OF THE LOWER AUTHORITIES THAT IN SPITE OF THEIR BEST EFFOR T, THEY COULD NOT GET THE COPIES OF THE BALANCE-SHEET FROM THE RESPECTIVE COM PANY. ADMITTEDLY, THE ASSESSING AUTHORITY HAS NOT SUGGESTED ANY FORMULA F OR VALUATION OF THE UNQUOTED SHARES. ON IDENTICAL SITUATION THE KERALA HIGH COURT IN THE CASE OF LORD KRISHNA BANK LTD. (SUPRA)(ITA NO.234 OF 2009 D ATED 07-10-2010) EXAMINED THE ISSUE IN THE LIGHT OF THE LAW LAID DOW N BY THE KERALA HIGH COURT IN NEDUNGADI BANK LTD. (SUPRA) AND OBSERVED AS FOLL OWS ..IT IS A SETTLED POSITION THROUGH VARIOUS DECISI ONS INCLUDING THAT OF THIS COURT IN COMMISSIONER OF INCOME-TAX VS. NEDUNGAD I BANK LTD. REPORTED IN (2003) 264 ITR 545 THAT FOR THE PUR POSE OF ASSESSMENT COST PRICE OR MARKET VALUE WHICHEVR IS LOW SHOULD BE ADOPTED. ADMITTEDLY MARKET VALUE IS NOT KN OWN AND SO MUCH SO, SOME METHOD HAS TO BE ADOPTED TO FIX THE M ARKET VALUE AND THEREAFTER ONLY THE LOWER OF THE COST PRICE OR THE MARKET VALUE HAS TO BE TAKEN FOR THE PURPOSE OF COMPUTATION OF PROFIT OR L OSS IN RESPECT OF THE UNSECURED SECURITIES. SENIOR COUNSEL APPEARING FOR THE ASSESSEE I.T.A. NO. 234/2009 PRODUCED RBI GUIDELINES BEFORE US WHER EIN THE RBI HAS SUGGESTED BANKS TO VALUE UNQUOTED CENTRAL GOVERNMEN T SECURITIES ON THE BASIS OF THE PRICES/YTM RATES PUT OUT BY THE PD AI/FIMMDA AT I.T.A. NOS. 479 & 480/COCH/2011 6 PERIODICAL INTERVALS. YTM IS THE YIELD TO MATURITY METHOD ADOPTED FOR VALUATION OF SECURITIES. IT IS SEEN THAT THE TRIBUN AL ACCEPTED THE ASSESSEES VALUATION WHICH IS BASED ON RBI GUIDELIN ES TO THE BANKS FOR VALUATION OF UNQUOTED GOVERNMENT SECURITIES, WE FEE L IT IS THE RATIONAL BASIS WHICH ASSESSEE WAS BOUND TO ADOPT. THE ASSES SING OFFICER ALSO HAS NOT COME OUT WITH ANY FORMULA FOR COMPUTATION O F MARKET VALUE OF UNQUOTED SECURITIES AND HE HAS NO CASE THAT THE RBI GUIDELINES FOR VALUATION IS IRRATIONAL. SO MUCH SO, WE FEEL THE T RIBUNAL RIGHTLY UPHELD ASSESSEES CLAIM FOR VALUATION OF UNQUOTED GOVERNME NT SECURITIES BASED ON RBI GUIDELINES. 6. THE RBI ISSUED GUIDELINES TO VALUE TO UNSECURED SHARES ON THE BASIS OF YTM, I.E., YIELD TO MATURITY METHOD ADOPTED FOR VAL UATION OF SECURITIES. THE KERALA HIGH COURT HAS ALSO FOUND THAT YTM RATES HAV E BEEN PUT OUT BY THE PDAI/FIMMDA AT PERIODICAL INTERVALS. THEREFORE, WH EN THE TAXPAYER REVALUED THE ASSET ON THE BASIS OF THE GUIDELINE ISSUED BY T HE RBI AT REALIZABLE VALUE I.E. YTM METHOD SUGGESTED BY RBI, THE TAXING AUTHOR ITY CANNOT FIND FAULT WITH TAXPAYER. AS OBSERVED BY KERALA HIGH COURT, THE AS SESSING AUTHORITY HAS NOT COME OUT WITH ANY SUGGESTION/FORMULA FOR COMPUTATIO N OF MARKET VALUE OF UNQUOTED SHARES. IT IS ALSO NOT THE CASE OF THE RE VENUE THAT THE GUIDELINE ISSUED BY THE RBI FOR VALUATION IS IRRATIONAL. IN T HESE FACTS AND CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE LAW LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF NEDUNGADI BANK LTD. (SUPRA) AND LORD KRISHNA BANK LTD. (SUPRA) IS APPLICABLE IN THE CASE OF THE PRESENT TAXPAYER ALSO. THEREFORE, BY RESPECTFULLY FOLLOWING THE JUD GMENT OF THE KERALA HIGH COURT IN THE CASE OF NEDUNGADI BANK LTD. (SUPRA) AN D LORD KRISHNA BANK LTD. (SUPRA) AND FOR THE REASONS STATED THEREIN THE ORDE RS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ASSESSING AUTHORITY IS DIRECT ED TO ALLOW THE NOTIONAL LOSS CLAIMED BY THE TAXPAYER ON REVALUATION OF THE SECUR ITIES AS DEDUCTION WHILE COMPUTING THE TOTAL INCOME. CONSISTENT WITH THE VIEW TAKEN BY THE TRIBUNAL IN T HE ASSESSEES OWN CASE IN THE EARLIER YEARS, WE DIRECT THE ASSESSING OFFICER TO DELETE TH E IMPUGNED DISALLOWANCE AND ACCORDINGLY THE ORDER OF LD CIT(A) IS SET ASIDE ON THIS ISSUE. 9. THE NEXT ISSUE RELATES TO THE VALIDITY OF INTERE ST CHARGED U/S. 220(2) OF THE ACT. WE NOTICE THAT THE ISSUE RELATING TO THE CHARGEABIL ITY OF INTEREST U/S. 220(2) OF THE ACT HAS SINCE BEEN SETTLED BY THE HONBLE SUPREME COURT IN THE CASE OF VIKRANT TYRES VS. FIRST ITO (247 ITR 821) (SC). WE ALSO NOTICE THAT THE TAX AUTHORITIES HAVE NOT EXAMINED THIS ISSUE IN THE LIGHT OF THE DECISION RE NDERED BY THE HONBLE SUPREME COURT I.T.A. NOS. 479 & 480/COCH/2011 7 IN THE ABOVE CITED CASE. ACCORDINGLY, IN OUR VIEW, THIS ISSUE NEEDS FRESH EXAMINATION. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT( A) ON THIS ISSUE AND REMIT THE SAME TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTI ON TO EXAMINE THE ISSUE RELATING TO CHARGEABILITY OF INTEREST U/S. 220(2) OF THE ACT IN THE LIGHT OF THE DECISION RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF VIKRANT TY RES (REFERRED SUPRA). 10. THE NEXT ISSUE RELATES TO THE CHARGEABILITY OF INTEREST U/S. 234D OF THE ACT. WE NOTICE THAT THE LD. CIT(A) HAS DISMISSED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE FOLLOWING THE DECISION RENDERED BY THE HONBLE JURI SDICTIONAL HIGH COURT OF KERALA IN THE CASE OF CIT VS. KERALA CHEMICALS & PROTEINS LTD. RE PORTED IN 323 ITR 584. SINCE THE LD. CIT(A) HAS FOLLOWED THE BINDING DECISION RENDER ED BY THE HONBLE JURISDICTIONAL HIGH COURT, WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS DECISION ON THIS ISSUE. 11. NOW WE SHALL TAKE UP THE APPEAL FILED FOR TH E ASSESSMENT YEAR 2004-05, IN WHICH FOLLOWING THREE ISSUES ARE CONTESTED. (A) DISALLOWANCE OF PENSION PAYMENTS CLAIMED U/S 37 OF THE ACT. (B) DISALLOWANCE OF NON-PERFORMING INVESTMENTS WR ITTEN OFF. (C) CHARGING OF INTEREST U/S 220(2) OF THE ACT. 12. THE FIRST ISSUE RELATES TO THE DISALLOWANCE OF PENSION PAYMENTS CLAIMED U/S 37 OF THE ACT. IN THE IMMEDIATELY PRECEDING YEAR, WE HAV E CONSIDERED AN IDENTICAL ISSUE AND SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING O FFICER FOR MAKING FRESH EXAMINATION OF THE CLAIM MADE BY THE ASSESSEE. CONSISTENT WITH TH E VIEW TAKEN IN THAT YEAR, WE SET ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFIC ER IN THIS YEAR ALSO WITH SIMILAR DIRECTIONS AND ACCORDINGLY THE ORDER OF LD CIT(A) ON THIS ISSU E STANDS SET ASIDE. 13. THE NEXT ISSUE RELATES TO THE DISALLOWANCE O F WRITING OFF OF NON-PERFORMING INVESTMENTS. IN THE EARLIER YEARS, THE TRIBUNAL HA S CONSIDERED AN IDENTICAL CLAIM MADE BY THE ASSESSEE AND HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION RENDERED BY THE HONBLE JURISDICTIONAL HIG H COURT. CONSISTENT WITH THE VIEW I.T.A. NOS. 479 & 480/COCH/2011 8 TAKEN IN THE EARLIER YEARS, WE DIRECT THE AO TO DEL ETE THE IMPUGNED DISALLOWANCE MADE IN THIS YEAR ALSO AND ACCORDINGLY, THE ORDER OF LD CIT(A) ON THIS ISSUE STANDS SET ASIDE. 14. THE NEXT ISSUE RELATES TO THE VALIDITY OF C HARGING OF INTEREST U/S 220(2) OF THE ACT. IN THE IMMEDIATELY PRECEDING YEAR, WE HAD SET ASIDE THIS MATTER TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THE ISSUE IN THE LIGH T OF THE DECISION RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF FIRST ITO VS. VIKARANT TYRES (REFERRED SUPRA). ACCORDINGLY, IN THIS YEAR ALSO, WE SET ASIDE THE OR DER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH THE DI RECTION TO EXAMINE THIS ISSUE AFRESH IN THE LIGHT OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF VIKRANT TYRES (REFERRED SUPRA). 15. IN THE RESULT, BOTH THE APPEALS FILED BY TH E ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 12-06-20 13. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 12TH JUNE, 2013 GJ COPY TO: 1. THE SOUTH INDIAN BANK LTD., SIB HOUSE, MISSION Q UARTERS, THRISSUR-1. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1(1), THRISSUR. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-V, KOCHI . 4.THE COMMISSIONER OF INCOME-TAX, THRISSUR. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN