M/s Haryana State Co-operative Apex Bank Ltd., Chandigarh V. ACIT, Circle, Panchkula

ITA 503/CHANDI/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1100 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-11-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 18-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANDEEP DAHIYA
• Keywords: Principle of natural justice
• Section: 37(1); 37

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A CHANDIGARH , !' # $ % &' , '( BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NOS. 503, 504 & 505/CHD/2019 / ASSESSMENT YEARS : 2013-14, 2014-15 & 2015-16 HARYANA STATE CO-OP APEX BANK LIMITED, SCO 78-80, BANK SQUARE, SECTOR 17-B, CHANDIGARH THE ACIT, CIRCLE PANCHKULA ./PAN NO: AAAJH0029E / APPELLANT /RESPONDENT & ./ ITA NO. 803/CHD/2019 / ASSESSMENT YEARS : 2016-17 HARYANA STATE CO-OP APEX BANK LIMITED, SCO 78-80, BANK SQUARE, SECTOR 17-B, CHANDIGARH THE DCIT, CIRCLE, PANCHKULA ./PAN NO: AAAJH0029E / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI HARRY RIKHY, ADVOCATE ' ! / REVENUE BY : SHRI SANDEEP DAHIYA, CIT DR # $ % /DATE OF HEARING : 28.11. 2019 &'() % / DATE OF PRONOUNCEMENT : 28.11.2019 ')/ ORDER PER BENCH: THE CAPTIONED APPEALS FOR ASSESSMENT YEARS 2013- 14, 2014-15 & 2015-16 HAVE BEEN PREFERRED BY THE ASSESSEE AGAI NST THE COMMON ITA NOS. 503 TO 505/CHD/2019 & 803/CHD/2019- HARYANA STATE COOP APEX BANK LTD.,PANCHKULA 2 ORDER DATED 4.2.2019 AND APPEAL FOR ASSESSMENT YEA R 2016-17 HAS BEEN PREFERRED AGAINST THE ORDER DATED 18.3.2019 OF THE COMMISSIONER OF INCOME TAX(A), PANCHKULA [HEREINAFTER REFERRED TO AS CIT(A)] 2. SINCE IDENTICAL ISSUES HAVE BEEN RAISED IN THE A FORESAID APPEALS, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON AND CONSOLIDATED ORDER. THE COMMON GROUNDS, AS HAVE BE EN TAKEN IN ITA NO.503/CHD/2019 READS AS UNDER :- 1. THAT THE ORDER OF THE LD. CIT(A) IS DEFECTIVE IN LAW & FACTS OF THE CASE. 2 THAT THE LD. CIT(A)IS NOT JUSTIFIED IN UPHOLDING THE ADDITION MADE BY THE LD. ASSESSING OFFICER OF R S. 2,40,00,000/- ON ACCOUNT OF PROVISION FOR STANDARD ASSETS. THE ADDITION IS UNCALLED FOR AND DESERVES T O BE DELETED. 3. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDIN G THE ADDITION MADE BY THE ASSESSING OFFICER OF RS. 3,58,69,954/- ON ACCOUNT OF INTEREST CHARGES ON AGRICULTURAL CREDIT STABILIZATION FUND. THE ADDITI ON IS UNCALLED FOR AND DESERVES TO BE DELETED. 4. THAT ANY OTHER GROUND MAY BE KINDLY BE ALLOWED TO BE TAKEN, AT THE TIME OF HEARING IN THE INTEREST OF EQUITY & NATURAL JUSTICE. 3. GROUND NOS. 1 & 4 : THESE GROUNDS ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY SPECIFIC ADJUDICATION. 4. GROUND NOS 2 & 3 : AT THE OUTSET, BOTH THE LD. REPRESENTATIVES OF THE PARTIES HAVE SUBMITTED THAT THE FACTS AND ISSUE S INVOLVED IN BOTH ITA NOS. 503 TO 505/CHD/2019 & 803/CHD/2019- HARYANA STATE COOP APEX BANK LTD.,PANCHKULA 3 APPEALS ARE SQUARELY COVERED BY THE EARLIER ORDER O F THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE FOR ASSESSMENT YEARS 2010- 11 & 2011-12 DECIDED VIDE ORDER DATED 5.6.2018 PASSED IN ITA NOS . 1157 & 1158/CHD/2014. WE FIND THAT THE ISSUE RAISED IN THE CAPTIONED APPE ALS I.E VIDE GROUND NO. 2, RELATING TO THE UPHOLDING OF ADDITIO N ON ACCOUNT OF EXCESS PROVISIONING OF STANDARD ASSET IS SIMILAR TO THAT O F GROUND NO.2 TAKEN IN ITA NO. 1157/CHD/2014, WHEREAS, THE ISSUE RELATING TO INTEREST CHARGES ON AGRICULTURAL CREDIT STABILIZATION FUND VIDE GRO UND NO. 3 OF THE CAPTIONED APPEALS IS IDENTICAL TO THAT OF GROUND NO S. 1 IN ITA NO.1157/CHD/2014. THE COORDINATE CHANDIGARH BENCH OF THE TRIBUNAL, UNDER IDENTICAL FACTS AND CIRCUMSTANCES, IN THE OWN CASE OF THE ASSESSEE, FOR EARLIER ASSESSMENT YEARS I.E. ASSESSMENT YEAR 2010-11 & 2011-12, HAS DECIDED THE ISSUES VIDE CONSOLIDATED ORDER DATE D 5.6.2018. 5. AS FAR AS THE ISSUE RELATING TO INTEREST ON AGRI CULTURAL CREDIT STABILIZATION FUND IS CONCERNED, THE RELEVANT PART OF THE ORDER OF THE TRIBUNAL DATED 5.6.2018 ON THE SAID ISSUE IS REPR ODUCED AS UNDER:- 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE AL SO GONE THROUGH THE RECORDS. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE AGRICULTURAL CREDIT STABILIZATION FUND WAS CREATED IN PURSUANCE TO THE INSTRUCTIONS ISSUED BY THE DEPARTMENT OF CO-OPERATI ON, MINISTRY OF AGRICULTURE VIDE FILE NO. K11011/24/17- CREDIT DATED 15.7.1972 AND BY RESERVE BANK OF INDIA DATED 8.10.1971 WHEREIN IT WAS RECOMMENDED THAT IN ORDER ENSURE UNINTERRUPTED FLOW OF LONG TERM DEVELOPMENT, FINANCE FOR AGRICULTURE IN THE AREA AFFECTED BY NAT URAL ITA NOS. 503 TO 505/CHD/2019 & 803/CHD/2019- HARYANA STATE COOP APEX BANK LTD.,PANCHKULA 4 CALAMITIES LIKE FLOOD, DROUGHT, ETC., THE POSSIBILI TY OF INTRODUCING STABILIZATION ARRANGEMENTS IN THE LONG TERM CO-OPERATIVE CREDIT STRUCTURE ALSO SHOULD BE EXAMIN ED. ACCORDINGLY, IT WAS DECIDED TO START BUILDING STABI LIZATION FUND BY MORTGAGE / DEVELOPMENT BANKS AT VARIOUS LEV ELS. AS PER THE INSTRUCTIONS, 15% OF THE NET PROFITS ARE REQUIRED TO BE APPROPRIATED FROM THE NET PROFITS OF THE CONCERNED BANK AND FURTHER INTEREST @ 3% ON THE OPE NING BALANCE OF THE FUND IS ALSO REQUIRED TO BE CREDITED TO THE FUND IN EACH RESPECTIVE FINANCIAL YEAR. THE SAID F UND IS CREATED AND MAINTAINED TO DEAL WITH THE NATURAL CAL AMITIES IN THE AGRICULTURAL SECTOR. AS PER THE INSTRUCTION S, TILL THE USAGE OF THE FUNDS, THE UNUTILIZED FUNDS SHALL BE I NVESTED IN THE GOVERNMENT OR TRUSTEE SECURITIES. THE LD. C OUNSEL HAS ALSO SUBMITTED THAT AS PER THE NABARD GUIDELINE S, THE SAID AGRICULTURAL CREDIT STABILIZATION FUND IS NEI THER A PART OF FREE RESERVES OUT OF WHICH THE BANK CAN DEC LARE THE DIVIDEND NOR IT IS A PART OF LENDABLE RESOURCES WH ICH THE BANK CAN LEND OUT OF AVAILABLE FUND. THAT DURING T HE FINANCIAL YEARS 2009-10 AND 2010-11, THE ASSESSEE INVESTED THE ENTIRE AMOUNT OF AGRICULTURE STABILIZA TION FUND AND RS. 109.07 CRORES IN THE GOVERNMENT SECURI TIES FOR THE PERIOD ENDING 31.3.2011. THAT THE USAGE OF THE AGRICULTURAL CREDIT STABILIZATION FUND HAD BEEN PRO POSED TO BE MADE BY CONVERTING THE SHORT TERM LOANS INTO THE MEDIUM TERM LOANS IN THE EVENT OF NATURAL CALAMITY. THAT BASED ON THE REQUEST, THE STATE CO-OPERATIVE APEX B ANK SANCTIONED THE PROPOSAL GIVEN BY THE DISTRICT CO-OP ERATIVE BANKS BY CONVERTING THE SHORT TERM LOANS IN TO MEDI UM TERM LOANS TO ENABLE THE FARMERS TO REPAY THEIR LOA N OVER A PERIOD OF TIME. 7. THE LD. COUNSEL HAS FURTHER SUBMITTED THAT IN TE RMS OF THE RBI CIRCULAR NO. ACD.PLAN.1060/PR.26(GEN|) - 71/72 DATED 8.10.1971 UNDER RULE 4D, THE CENTRAL COOPERATIVE AND APEX BANKS SHALL PAY TO THE FUND AN INTEREST @ 3% PER ANNUM ON THE AMOUNTS OF CREDIT OF FUND AT THE COMMENCEMENT OF THE YEAR. HE HAS FURTHER SUBMITTED THAT, THUS, IN ALL THE INSTRUCTIONS, THE APPROPRIATION AT THE TIME OF CREATION OF FUND AND F URTHER PROVISIONING OF INTEREST DURING THE YEAR @ 3% PER A NNUM ITA NOS. 503 TO 505/CHD/2019 & 803/CHD/2019- HARYANA STATE COOP APEX BANK LTD.,PANCHKULA 5 ARE TWO DIFFERENT THINGS. THE APPROPRIATION WAS MAD E ONLY OUT OF PROFITS WHEREAS THE PROVISIONING OF INTEREST MADE IN EACH YEAR ON THE OPENING BALANCE OF THE AGRICULTURE CREDIT STABILIZATION FUND WAS AN EXPENSE WHICH WAS TO BE INCURRED IRRESPECTIVE OF THE FACT WHETHER THE ASSES SEE MADE PROFITS OR NOT. IT WAS FURTHER STATED THAT IN THE ASSESSMENT YEAR 2010-11, WHEN THE ASSESSEE INCURRED THE LOSS, THERE WAS NO PROVISION OF THE APPROPRIATION O F THE AGRICULTURAL STABILIZATION FUND WHEREAS THE ASSESSE E PROVIDED THE INTEREST OF RS. 3,22,00,879/-. THE LD . COUNSEL HAS FURTHER RELIED UPON THE DECISION OF THE TRIBUNAL IN THE CASE OF ITO VS. M/S HARYANA STATE CO-OP AGRI. & RURAL DEV. BANK LTD., PANCHKULA ITA NOS. 228 & 241/CHD/2011 ORDER DATED 28.4.2011 AND HAS STATED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ABOVE DECISION OF THE TRIBUNAL. THE LD. COUN SEL HAS FURTHER RELIED ON - A) CIT VS. ORISSA INDUSTRIES LTD 91993) 203 ITR 0449 DATED 8.2.1993 ORISSA HIGH COURT. - IT WAS CONCLUDED THAT THE PRODUCTION & MAINTENANCE BONUS OVER AND ABOVE MAXIMAL ALLOWABLE U/S 36(1)(III) OR FACTS HAVING BEEN FOUND NOT BEING BONUS AS SUCH BUT INCENTIVE WAGES SAME ALLOWABLE U/S 37(1) OF THE INCOME-TAX ACT, 1961. B) THE KARNATAKA STATE CO-OP APEX BANK LTD VS. DCIT, BANGLORE DATED 29.2.2016 ITAT, BANGLORE BENCH WHEREIN THE ONLY CONTROVERSY IS WHETHER THE AMOUNT SPENT OUT OF ABOVE FUNDS IS AN EXPENDITURE LAID OUT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS U/S 37 OF THE INCOME- TAX ACT, 1961. IT WAS CONCLUDED THAT THE SAID EXPENDITURE WAS A STATUTORY OBLIGATION TO SPEND MONEY FOR THE ABOVE PURPOSES AS THE PROVISION OF THE KARNATAKA CO-OPERATIVE SOCIETIES ACT STIPULATES THAT CERTAIN PERCENTAGE OF PROFITS SHOULD BE SPENT TOWARDS THE SPECIFIED PURPOSE WHICH IS WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND WE DIRECT THE ASSESSING OFFICER TO ALLOW THE AMOUNT AS DEDUCTION U/S 37(1) OF THE ITA NOS. 503 TO 505/CHD/2019 & 803/CHD/2019- HARYANA STATE COOP APEX BANK LTD.,PANCHKULA 6 ACT WHILE COMPUTING INCOME OF THE ASSESSEE CO- OPERATIVE BANK. 8. THE LD. COUNSEL, THEREFORE, SUMMED UP HIS SUBMISSIONS AS UNDER:- - THAT THE FUND HAS BEEN CREATED TO DEAL WITH THE POSITION ARISING OUT OF THE NATURAL CALAMITIES LIKE FLOOD, DROUGHT ETC. - THAT THE FUND CANNOT BE USED FOR ANY OTHER PURPOSES LIKE FREE RESERVE OR ANY OTHER LENDABLE RESOURCES BY ASSESSEE. - TILL ITS USAGE OR OCCURRING OF EVENTUALITY AS MENTIONED ABOVE THE FUND WILL BE INVESTED ONLY IN GOVERNMENT SECURITIES OR TRUSTEE SECURITIES. - THAT THE CREATION AND MAINTENANCE OF LAND IS A SOCIO-ECONOMIC NEED OF THE INSTITUTION WILL BE UTILIZED ONLY FOR THE BUSINESS PURPOSES. - THAT THE CHARGE OF INTEREST AND THE APPROPRIATION OF PROFITS ARE TWO DIFFERENT THINGS WHICH SHOULD NOT BE CLUBBED TOGETHER. AS THE INTEREST IS TO BE PROVIDED EVEN IN THE YEAR WHEN THE ASSESSEE DOES NOT EARN ANY PROFIT AND WHEREAS THE CREATION OF FUND WILL BE DONE ONLY WHEN THE ASSESSEE EARNS THE PROFITS WHICH IS EVIDENT FROM ASSESSMENT YEAR 2010-11. 9. THE LD. DR, ON THE OTHER HAND, HAS RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES AND HAS SUBMITTED THAT THE SAID FUND LYING WITH THE ASSESSEE THOUGH HAD A SPECIFIC PURPOSE, BUT THE AMOUNT OF INTEREST APPORTIONED ON THE FUNDS CANNOT BE SAID TO BE ALLOWABLE EXPENDITURE SP ENT FOR BUSINESS PURPOSES. THE AMOUNT WAS FURTHER INVESTED BY THE ASSESSEE IN THE GOVERNMENT SECURITIES AND, HENCE, T HE ASSESSEE HAD NOT PARTED WITH THE FUNDS AS A BUSINE SS EXPENDITURE. ITA NOS. 503 TO 505/CHD/2019 & 803/CHD/2019- HARYANA STATE COOP APEX BANK LTD.,PANCHKULA 7 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY, THERE ARE TWO COMPONENTS OF CONTRIBUTIO N OF THE AGRICULTURAL CREDIT STABILIZATION FUND (ACSF) WHICH THE ASSESSEE IS REQUIRED TO CREATE AND MAINTAINED A S PER THE GOVERNMENTS STATUARY INSTRUCTIONS / GUIDELINES . THE FIRST PART IS THE 15% APPROPRIATION OUT OF THE PROF ITS AND THE SECOND PART IS THE INTEREST @ 3% ON THE OPENING BALANCE OF THE FUND. SO FAR AS THE APPROPRIATION OF THE 15% ON THE PROFI TS TOWARDS THE FUNDS IS CONCERNED, THE ASSESSEE HAS NO T CLAIMED THE SAME AS DEDUCTION. THE DISPUTE IS REGAR DING THE CLAIM ON THE INTEREST AMOUNT CREDITED TO THE FU NDS. THE MAIN CONTENTION OF THE LD. COUNSEL FOR THE ASSE SSEE IS THAT THE SAID CREDIT OF INTEREST WAS NOT OUT OF APPORTIONMENT OF THE PROFITS. THAT EVEN IF, THE AS SESSEE RUNS INTO LOSSES, STILL THE ASSESSEE IS REQUIRED TO CREDIT 3% OF THE INTEREST ON THE OPENING BALANCE OF THE FUND. THE LD. COUNSEL HAS REFERRED TO THE INSTRUCTIONS OF THE GOVERNMENT OF INDIA DATED 15.7.1972 (SUPRA) TO STATE THAT SO FAR AS THE CREDIT OUT OF THE PROFITS IS CONCERNE D THE WORDS USED APPROPRIATION OF 15% OF THE NET PROFIT S WHEREAS REGARDING THE SECOND PART OF CONTRIBUTION, THE WORDS USED ARE CREDIT OF INTEREST OF 3% PER ANNUM HAS BEEN USED. HE, THEREFORE, HAS SUBMITTED THAT THE SE COND PART I.E. CREDIT OF INTEREST TO THE FUND IS AN ADMI SSIBLE EXPENDITURE U/S 36(1)(III) OF THE ACT. 11. WE, HOWEVER, ARE NOT CONVINCED BY THE ABOVE SUBMISSION OF THE LD. COUNSEL OF THE ASSESSEE. THOU GH, THE AGRICULTURAL CREDIT STABILIZATION FUND WAS REQUIRE D TO BE CREATED AND MAINTAINED AS PER THE GOVERNMENT INSTRU CTIONS / GUIDELINES, HOWEVER, THE FUND CONTRIBUTED REMAIN ED WITH THE ASSESSEES BANK WHICH THE ASSESSEE INVESTED IN GOVERNMENT SECURITIES AND EARNED INCOME THEREUPON . IT IS NOT A PAYMENT OF AMOUNT TO A THIRD PARTY. EVEN THE INCOME RECEIVED FROM FURTHER INVESTMENT OF THE FUND DOES N OT GO TO ANY THIRD PARTY BUT TO THE ASSESSEE ONLY. THE CONTR IBUTION TO THE SAID FUND IS NOT AN OUTGO OF THE ASSESSEE TH AT CAN BE TERMED AS EXPENDITURE. THE LD. CIT(A) HAS RIGHTLY REFERRED TO THE DEFINITION OF INTEREST THAT IS A SUM PAID ITA NOS. 503 TO 505/CHD/2019 & 803/CHD/2019- HARYANA STATE COOP APEX BANK LTD.,PANCHKULA 8 OR CHARGED FOR THE USE OF MONEY OR FOR BORROWING MO NEY OR SUCH A SUM EXPRESSED AS A PERCENTAGE OF MONEY BORROWED TO BE PAID OVER A GIVEN PERIOD. THE LD . CIT(A) HAS RIGHTLY POINTED OUT THAT EVEN AS PER THE PROVIS IONS OF SECTION 36(1)(III) OF THE ACT, THE DEDUCTION IS AL LOWABLE ON THE INTEREST ON BORROWED CAPITAL. HOWEVER, IN TH E INSTANT CASE, THE ASSESSEE HAS NOT CLAIMED INTEREST ON ANY SUCH BORROWED CAPITAL. THE FUND, IN QUESTION, WAS CREATED TO BE USED BY THE ASSESSEE ITSELF IN PECULIAR CIRCU MSTANCES. THOUGH, THE FUND HAD TWO COMPONENTS, ONE IS OUT OF APPROPRIATION OF PROFITS @ 15% AND THE OTHER IS INT EREST @ 3% ON THE OPENING BALANCE OF THE FUND, HOWEVER, T HE FACT IS THAT THE SAID AMOUNT CREDITED BY THE ASSES SEE TOWARDS THE AGRICULTURAL CREDIT STABILIZATION FUND IS NOT PARTED WITH BY THE ASSESSEE. AS POINTED OUT IN THE RELEVANT NOTIFICATION, AS ALSO CLAIMED BY THE ASSESSEE, THE FUND IS USED IN THE CASE OF NEED TO CONVERT THE SHORT TERM CROP LOANS IN THE CASE OF NATURAL CALAMITY INTO TERM LO AN. WHENEVER, THE ASSESSEE HAS TO INCUR SUCH AN EXPENDI TURE FROM THE FUND MAINTAINED BY IT, THAT IT CAN OF COUR SE BE CLAIMED AS DEDUCTION. HOWEVER, MERE CONTRITION TO THE FUND MAINTAINED AND RETAINED BY THE ASSESSEE, WHICH IS FURTHER INVESTED BY THE ASSESSEE, GOVERNMENT SECURI TIES AND THE INCOME IS ALSO EARNED BY THE ASSESSEE ON SU CH INVESTMENTS, CANNOT BE CLAIMED AS EXPENDITURE. SO FAR AS THE RELIANCE OF THE LD. COUNSEL FOR THE ASSESSEE ON THE DECISION OF THE COORDINATE BENCH OF THE TR IBUNAL IN ITO VS. M/S HARYANA STATE CO-OP AGRI. & RURAL D EV. BANK LTD., PANCHKULA ITA NOS. 228 & 241/CHD/2011 ORDER DATED 28.4.2011 IS CONCERNED, WE AGREE WITH T HE FINDINGS OF THE CIT(A) THAT THE ONLY POINT TAKEN I NTO CONSIDERATION BY THE ITAT WHILE UPHOLDING THE ORDE R OF THE CIT(A) IN THAT CASE WAS THAT CONTRIBUTION TOWAR DS THE FUNDS @ 3% ON THE OPENING BALANCE OF THE FUND IS NO T FROM THE APPROPRIATION OF PROFITS. HOWEVER, THE FACT TH AT THE FUND SO CREATED AND MAINTAINED IS RETAINED BY THE A SSESSEE ITSELF AND IS USED AND INVESTED BY THE ASSESSEE ITS ELF, THOUGH AS PER THE RELEVANT GUIDELINES / INSTRUCTION S HAS BEEN MISSING IN THE SAID DECISION OF THE ITAT IN TH E CASE OF M/S M/S HARYANA STATE COOPERATIVE AGRICULTURAL AND ITA NOS. 503 TO 505/CHD/2019 & 803/CHD/2019- HARYANA STATE COOP APEX BANK LTD.,PANCHKULA 9 RURAL DEVELOPMENT BANK, PANCHKULA(SUPRA). THE SAI D DISTINGUISHING FACTS HAVE NEITHER BEEN BROUGHT TO T HE KNOWLEDGE OF THE TRIBUNAL NOR THE SAME HAS BEEN CONSIDERED OR DISCUSSED IN THE ABOVE REFERRED TO DE CISION OF THE TRIBUNAL. HOWEVER, THE ISSUE IS SQUARELY CO VERED BY THE DIRECT DECISION OF THE PUNE BENCH OF THE TRI BUNAL IN THE CASE OF SOLAPUR DISTRICT CENTRAL COOP BANK LT D [2014] 52 TAXMAN.COM 358. THE FACTS AND ISSUES INV OLVED IN OTHER CASE LAWS RELIED UPON BY THE ASSESSEE ARE DIFFERENT, HENCE, THEY ARE NOT RELEVANT FOR THE PUR POSE OF ADJUDICATION OF THIS CASE. THE MERE CONTRIBUTION TO THE FUND, IN OUR VIEW, CANNOT BE CLAIMED AS EXPENDITURE FOR THE PURPOSE OF BUSINESS. THE ASSESSEE NO DOUBT CAN CLAIM THE EXPENDITURE WHEN SUCH FUND OR PART OF SUCH FUND IS EXPENDED AS PER THE PRESCRIBED PROCEDURE, INSTRUCTI ONS OR GUIDELINES. THE RELIANCE IN THIS RESPECT CAN ALSO B E PLACED ON THE DECISION OF THE ITAT BANGALORE BENCH IN TH E CASE OF KARNATAKA STATE CO-OPERATIVE APEX BANK LTD. V S. DCIT [2017] 83 TAXMANN.COM 327 (BANGLORE-TRIB) AND OF ITAT HYDERABAD BENCH IN THE CASE OF A.P MAHESH CO-O P URBAN BANK LTD V DCIT [2015] 55 TAXMANN.COM 429 (HYDERABAD TRIB). 12. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRM ITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE AND UPHOLD TH E SAME. IN VIEW OF THE FINDINGS ARRIVED AT IN THE AFORESAID CASE, THE ORDER OF THE CIT(A) ON THIS ISSUE IS UPHELD. 6. SO FAR AS THE ISSUE RAISED VIDE GROUND NO.2 RELA TING TO PROVISIONING OF DISALLOWANCE ON ACCOUNT OF EXCESS P ROVISIONING OF STANDARD ASSETS IS CORNERED, THE RELEVANT FINDINGS ARRIVED AT BY THE TRIBUNAL FOR THE EARLIER ASSESSMENT YEARS I.E. 2010 -11 AND 2011-12 VIDE ORDER DATED 5.6.2018 ARE AS UNDER:- ITA NOS. 503 TO 505/CHD/2019 & 803/CHD/2019- HARYANA STATE COOP APEX BANK LTD.,PANCHKULA 10 16. WE HAVE HEARD THE RIVAL SUBMISSIONS. AS PER THE PROVISIONS OF THE INCOME TAX ACT, GENERALLY THE DEDUCTION OF EXPENDITURE ACTUALLY INCURRED SOLELY F OR THE BUSINESS PURPOSES ARE ALLOWED, HOWEVER, THE PROVISION FOR AN EXPENDITURE IS ALLOWED AS A SPECIA L MEASURE IN THE CASE OF EXPECTED EXPENDITURE / LOSSE S THAT ARE LIKELY TO OCCUR IN SUCH CIRCUMSTANCES AND, HENCE, DEDUCTION AS A PROVISION OF SAID EXPENDITURE IS ALLOWED EVEN BEFORE THE EXPENDITURE IS ACTUALLY INCURRED. HOWEVER, SUCH PROVISIONS IS REQUIRED TO BE SQUARED OFF AT THE END OF THE YEAR WHEN THE ACTU AL EXPENDITURE IS INCURRED BY THE ASSESSEE AGAINST THE PROVISION IS ALLOWED. IF THE ACTUAL EXPENDITURE IS LESS THAN THE PROVISION MADE OF THE ESTIMATING AMOUNT, IT IS TO BE ADDED TO THE INCOME OF THE ASSESSEE AND IF THE ACTUAL EXPENDITURE IS MORE THAN THE PROVISION MADE FOR, THE ASSESSEE CERTAINLY CAN CLAIM THE BALANCE EXPENDED AMOUNT. HOWEVER, ALL THESE ADJUSTMENTS ARE SUBJECT TO THE PROVISIONS MAD E IN THE NEXT ASSESSMENT YEAR. UNDER THE CIRCUMSTANCES, IF THE PROVISIONS MADE AS PER RBI GUIDELINES IN EARLIER YEARS IS MORE THAN THE PROVISION OF EXPENDITURE FOR WHICH THE ASSESSEE IS ENTITLED TO MAKE IN THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION, THEN THE ASSESSEE CANNOT CLAI M THE BENEFIT OF PERPETUITY OF THE EXCESS PROVISION MADE. THAT AT THE END OF THE YEAR IS REQUIRED TO B E SQUARED OFF AND, HENCE, THE EXCESS PROVISIONING MADE BY THE ASSESSEE IS REQUIRED TO BE ADDED TO THE INCOME OF THE ASSESSEE. HOWEVER, THE CONTENTION OF THE ASSESSEE THAT WHILE CONSIDERING THE PROVISIONS ALLOWABLE TO THE ASSESSEE ON THE ALLOWABLE STANDARD ASSETS, THE LOWER AUTHORITIES HAVE NOT CONSIDERED THE FIGURES OF LOST ASSETS, WE ARE OF THE VIEW, TH AT THIS REQUIRES TO BE EXAMINED AT THE END OF THE ASSESSING OFFICER. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO CONSIDER THE EXPENDITURE / PROVISION FOR EXPENDITURE / LOSS ON THE STANDARD ASSETS / SUB-STANDARD ASSETS AND LOSS ASSETS AND TH EN TO DECIDE, IF ANY, DISALLOWANCE IS ATTRACTED FOR ITA NOS. 503 TO 505/CHD/2019 & 803/CHD/2019- HARYANA STATE COOP APEX BANK LTD.,PANCHKULA 11 EXCESS PROVISIONING IN ACCORDANCE WITH LAW. THIS GROUND OF APPEAL IS TREATED AS PARTLY ALLOWED. 7. SINCE IDENTICAL ISSUES RAISED IN THE CAPTIONED A PPEALS I.E. ITA NO.503 TO 505/CHD/2019, HAVE ALREADY BEEN DECIDED B Y THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE FOR EARLIER ASSESSMENT YEARS, HENCE, FOR THE SAKE OF CONSISTENCY, BOTH THE ISSUES BEING SQUAREL Y COVERED BY THE DECISION OF THE TRIBUNAL DATED 5.6.29018, ARE DECID ED ACCORDINGLY. AS A RESULT, GROUND NO.1 RAISED IN THE AFORESAID AP PEALS, IS DISMISSED, WHEREAS, GROUND NO.2 OF THE APPEALS STAN DS PARTLY ALLOWED. ITA NO. 803/CHD/2019 : 8. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS:- 1. THAT THE ORDER OF THE LD. CIT(A) IS DEFECTIVE IN LAW & FACTS OF THE CASE. 2 THAT THE LD. CIT(A)IS NOT JUSTIFIED IN UPHOLDING THE ADDITION MADE BY THE LD. ASSESSING OFFICER OF R S. 4,25,79,412/- ON ACCOUNT OF INTEREST CHARGED ON AGRICULTURAL CREDIT STABILIZATION FUND. THE ADDITI ON IS UNCALLED FOR AND DESERVES TO BE DELETED. 3. THAT ANY OTHER GROUND MAY BE KINDLY BE ALLOWED TO BE TAKEN, AT THE TIME OF HEARING IN THE INTEREST OF EQUITY & NATURAL JUSTICE. 9. GROUND NOS 1 & 3: THESE GROUNDS ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY SPECIFIC ADJUDICATION. ITA NOS. 503 TO 505/CHD/2019 & 803/CHD/2019- HARYANA STATE COOP APEX BANK LTD.,PANCHKULA 12 10. GROUND NO.2 : THE SOLE ISSUE RAISED BY THE ASSESSEE VIDE GROUN D NO.2 IS ON ACCOUNT OF INTEREST CHARGED ON AGRICULTU RAL CREDIT STABILIZATION FUND. IN VIEW OF OUR FINDINGS GIVEN ABOVE IN RESPECT OF G ROUND NO.3 RAISED IN ITA NO. 503 TO 505/CHD/2019, THIS GROUND OF THE ASSESSEE STANDS PARTLY ALLOWED. IN VIEW OF THE ABOVE, ALL THE APPEALS OF THE ASSESS EE ARE TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.11.2019. SD/- SD/- ( # $ % &' / ANNAPURNA GUPTA) '( / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 28.11.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR