M/S S B B J, Jaipur V. ACIT, Jaipur

ITA 921/JPR/2009

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2102 (ITAT-JAIPUR)
• Duration Of Justice: 7 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 15-02-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 18-12-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROLLY AGARWAL CIT DHK
• Keywords: Capital asset; Business income; Business expenditure; Rectification of order; Search and seizure; Proportionate interest; Tangible material; Bad and doubtful debts; Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 14A; 147; 148; 263; 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 921/JP/2009 & 299/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 STATE BANK OF BIKANER & JAIPUR, TILAK MARG, C-SCHEME, JAIPUR. CUKE VS. A CIT, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AADCS 4750 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 41/JP/2010 & 28/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 A CIT, CIRCLE-6, JAIPUR. CUKE VS. STATE BANK OF BIKANER & JAIPUR, TILAK MARG, C-SCHEME, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AADCS 4750 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. ROLLY AGARWAL (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 08.08.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29/08/2017. VKNS'K@ ORDER PER BENCH OUT OF BUNCH OF 21 APPEALS, THESE FOUR CROSS APPEAL S PERTAINING TO THE A.Y. 2007-08 ARE FILED BY THE ASSESSEE AND REVENUE I.E. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/JP/2013 ARE DIRECTED AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-II, JAIPUR, DATED 9/11/2009 & 25/03/2014 RESPECTIVELY. SINCE THE APPEALS WERE HEARD TOGETHER, THEREFORE, ARE BEI NG DISPOSED OFF BY WAY OF CONSOLIDATED ORDER FOR THE SAKE OF BREVITY. 2 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. ITA NO. 921/JP/2009 (ASSESSEE) 2. FIRST WE TAKE UP ASSESSEES APPEAL IN ITA NO. 92 1/JP/2009. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1.(I) UNDER THE FACTS AND CIRCUMSTANCES OF THE CAS E LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN UPHOLDING THE APPL ICABILITY OF THE PROVISION OF SECTION 14A AND THEREBY UPHOLDING THE DISALLOWANCE OF PROPORTIONATE INTEREST AND ESTIMATED ADMINISTRATIVE EXPENDITURE OF THE BANKING BUSINESS. (II) UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN QUANTIFYING THE D ISALLOWANCE U/S 14A AT A SUM OF RS. 6,26,12,887/-. (III) UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN CALCULATI NG THE AMOUNT OF DISALLOWANCE U/S 14A IN TERMS OF PROVISIONS OF RULE 8D. THE HAS ALSO ERRED IN APPLYING THESE PROVISIONS OF RULE 8D FOR T HE YEAR UNDER CONSIDERATION AS THE SAME HAVE BEEN INTRODUCED ON 2 4.3.2008. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE LD . CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF PRIOR PERIOD EXPENSE S OF RS. 1,03,677/-. HE HAS FURTHER ERRED IN GIVING THE DIRECTIONS TO TH E ASSESSING OFFICER FOR VERIFICATION OF THE EVIDENCE IN RESPECT OF DISALLOW ANCE OF REMAINING ALLEGED PRIOR PERIOD EXPENSE OF RS. 3,42,122/-. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE LD . CIT(A) HAS ERRED IN CONFIRMING THE AOS ACTION OF RESTRICTING THE CLAIM OF ASSESSEE U/S 36(1)(VIIA) AT RS. 220,50,86,829/- AS AGAINST ALLOW ABLE CLAIM OF RS. 230,67,63,914/-. 4. APPELLANT CRAVES TO ADD, AMEND, ALTER OR MODIFY ANY OF THE GROUND OF APPEAL. 5. THE APPROPRIATE COST BE AWARDED TO THE ASS ESSEE. 3. GROUND NO. 1(I) TO (III) ARE AGAINST DISALLOWANCE MADE BY INVOKING THE PROVISIONS OF RULE 8D OF INCOME TAX RULES, 1962 AMO UNTING TO RS. 6,26,12,887/-. 3.1 THE FACTS IN BRIEF ARE THAT, THE AO WHILE FRAMI NG THE ASSESSMENT NOTICED THAT THE SUBSTANTIAL INCOME OF THE ASSESSEE IS NOT CHARG EABLE TO TAX. THEREFORE, THE AO 3 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. FOLLOWING THE ASSESSMENT OF THE EARLIER YEARS DISAL LOWED A SUM OF RS. 4,08,07,240/- BY INVOKING THE PROVISION OF SECTION 14A OF THE ACT . HOWEVER, LD. CIT(A) ENHANCED THE DISALLOWANCE BY APPLYING RULE 8D OF THE INCOME TAX RULES, 1962. 3.2 LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. HE SUBMITTED THAT THE ISSUES ARE IDENTICAL AS IN THE AY 2006- 07. HE ADOPTED THE SAME ARGUMENT AS WERE MADE IN TH E A.Y. 2006-07. 3.3 ON THE CONTRARY, LD. D/R OPPOSED THE SUBMISSION S AND ADOPTED THE ARGUMENT AS WERE IN THE A.Y. 2006-07. 3.4 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE FACTS ARE IDENTICAL AS WERE IN ITA NO. 280/JP/2009 PERTAINING TO A.Y. 2006-07. IN ITA NO. 280/JP/2007 FOR THE A.Y. 2006- 07 WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 4.5 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIE S BELOW. WE FIND THAT LD. CIT(A) HAS MADE DISALLOWANCE BY COMPUTING AS PER RU LE 8D OF THE INCOME TAX RULES 1962. IN OUR VIEW, THE LD. CIT(A) WAS NOT JUSTIFIED IN COMPUTING THE DISALLOWANCE AS PER RULE 8D, AS THE RULE 8D BEC AME OPERATIONAL FROM THE A.Y. 2008-09. FURTHER, THERE IS NOT DISPUTE WITH R EGARD TO THE FACT THAT SIMILAR DISALLOWANCES WERE MADE U/S 14A IN THE ASSESSMENT Y EAR 2000-01, 2002-03 AND 2003-04 AND THE MATTER TRAVELED UP TO THE HONB LE RAJASTHAN HIGH COURT. THE HONBLE HIGH COURT IN DB INCOME TAX APPEAL NOS. 172/2008, 119/2010, 141/2010 AND 142/2010 WAS PLEASED TO HELD THAT IN V IEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GODREJ BOY CE MANUFACTURING COMPANY LTD. VS. DCIT. THE ORDER OF DISALLOWANCE WA S REVERSED. THE FACTS ARE IDENTICAL IN THE PRESENT YEAR AND ALS O THERE IS NO CHANGE INTO FACTS AND CIRCUMSTANCES. AS THE ASSESSEE BANK IS H AVING SUFFICIENT INTEREST FREE FUNDS WHICH HAS BEEN ACCEPTED BY BOTH THE AUTH ORITIES BELOW. 4 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF T HE HONBLE JURISDICTIONAL HIGH COURT, WE HEREBY DIRECT THE AO TO DELETE THE D ISALLOWANCE. THUS, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 3.5 IN VIEW OF THE ABOVE, WE DIRECTED THE AO TO DEL ETE THE DISALLOWANCE. THUS, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 4. GROUND NO. 2 , IS AGAINST THE DISALLOWANCE OF PRIOR PERIOD EXPEN SES. 4.1 FACTS IN BRIEF ARE THAT, WHILE FRAMING ASSESSME NT U/S 143(3) OF THE ACT. THE AO MADE DISALLOWANCE OF CLAIM OF THE ASSESSEE RELAT ED TO PRIOR PERIOD EXPENSES. THE AO IN RESPECT OF OVER TIME LAW CHARGES DEPRECIA TION AND MISC. EXPENSES HELD THAT THERE EXPENSES CRYSTALLIZED IN EARLIER. ON AP PEAL LD. CIT(A), CONFIRMED THE ACTION OF AO IN RESPECT OF DISALLOWANCE OF OVERTIME EXPENSES, LAW CHARGES AND SET ASIDE THE ISSUE OF MISCELLANEOUS EXPENSES TO AO FOR VERIFICATION. AGGRIEVED BY THIS, THE ASSESSEE HAS ASSAILED THE ORDER OF LD. CIT(A) B EFORE THIS TRIBUNAL IN THE GROUND OF APPEAL UNDER CONSIDERATION. 4.2 LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. HE SUBMITTED THAT THE ASSESSE E DEBITED PRIOR PERIOD EXPENSES OF RS. 14,05,671/-. THE ASSESSING OFFICER OBSERVED THAT AFTER FAILING TO MAKE PROPER PROVISIONS IN THE BOOKS OF ACCOUNTS, ASSESSEE CANNO T CLAIM THEM ON CRYSTALLIZATION BASIS. HE THEREFORE, DISALLOWED RS. 4,54,974/-. H OWEVER, LD. CIT(A) CONFIRMED DISALLOWANCE IN RESPECT OF OVERTIME CHARGES AND LAW CHARGES BY HOLDING THAT NO EVIDENCE HAVE BEEN GIVEN THAT LIABILITY OF THE SAME HAS BEEN CRYSTALLIZED ONLY IN THE ACCOUNTING YEAR RELEVANT TO PRESENT ASSESSMENT YEAR . FOR REMAINING AMOUNT OF RS. 3,42,122/-, HE DIRECTED THE AO TO VERIFY THE EVIDEN CE AND ALLOW THE DEDUCTION IF THE LIABILITY HAS CRYSTALLIZED DURING THE YEAR UNDER CO NSIDERATION. HE SUBMITTED THAT 5 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. ACCOUNTS OF THE BRANCHES GET FINALIZED WITHIN A WEE K OF END OF THE YEAR AND THEREFORE, THE CLAIMS FOR THESE EXPENDITURES MADE T HEREAFTER ARE TAKEN IN THE YEAR OF CLAIM ONLY. HE SUBMITTED THAT THE CO-ORDINATE BENC H IN ASSESSEES OWN CASE IN ITA NO. 619 & 620/JP/2003 DATED 07/11/2006 DIRECTED THE AO TO ALLOW THE PRIOR PERIOD EXPENSES. 4.3 HE SUBMITTED OTHERWISE ALSO TAX RATE BEING SAME , IF THESE EXPENSES ARE NOT ALLOWED DURING THE YEAR, THEY ARE TO BE ALLOWED IN THE PREVIOUS YEAR FOR WHICH APPEAL IS PENDING BEFORE HONBLE BENCH. HE FURTHER SUBMITTED THAT, SO FAR AS THE ALLOWABILITY OF SUM OF RS. 3,42,122/- IS CONCERNED, SAME IS ALLOWED BY THE ASSESSING OFFICER WHILE GIVING THE APPEAL EFFECT TO THE ORDER OF THE LD. CIT(A). 4.4 LD. D/R SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 4.5 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. SIMILAR ISSUE CAME UP FOR HEARING IN THE A .Y. 2006-07 IN ITA NO. 280/JP/2009 WHEREIN WE HAVE CONFIRMED THE DISALLOWA NCE OF OVERTIME EXPENSES AND LEGAL EXPENSES, TAKING THE CONSISTENT VIEW DISALLOW ANCE OF RS. 1,03,677/- IS HEREBY CONFIRMED. REST OF OTHER EXPENSES ARE DIRECTED TO BE DELETED IN VIEW OF THE DECISION OF THIS TRIBUNAL PERTAINING TO THE ASSESSMENT YEAR 1999-2000. THUS, THIS GROUND IS PARTLY ALLOWED. 5. GROUND NO. 3 IS NOT PRESSED; SAME IS DISMISSED AS NOT PRESSED. 6. GROUND NO. 4 , IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDI CATION. 7. GROUND NO. 5 , IS PRAYER FOR COST, FOR THE SAME REASONING AS IN THE A.Y. 2006- 07, THIS GROUND IS ALSO DISMISSED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 921/JP/2009 IS PARTLY ALLOWED. 6 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. ITA NO. 41/JP/2010 ( REVENUE) 9. NOW, WE TAKE UP APPEAL OF THE REVENUE PERTAINING TO THE A.Y. 2007-08. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 1. HOLDING THAT INTEREST ON GOVERNMENT AND OTHER S ECURITIES HAS TO BE INCLUDED IN THE INCOME ON DUE BASIS. 2. DELETING ADDITION OF RS. 19,78,71,896/- MADE ON ACCOUNT OF EXCESS OF BROKEN PERIOD INTEREST OVER THE BROKEN PERIOD INTER EST RECEIVED. 3. DELETING THE ADDITION OF RS. 43,66,84,312/- MADE BY THE AO ON ACCOUNT OF VALUATION OF INVESTMENT BY ADOPTING GLOBAL METHO D OF VALUATION OF SECURITIES AS AGAINST CATEGORY WISE METHOD OF VALUA TION FOLLOWED BY THE ASSESSEE. 4. DELETING THE ADDITION OF RS. 1,30,10,16,055/- MA DE BY THE AO ON ACCOUNT OF DISALLOWANCE OF AMORTIZATION IN RESPECT OF PREMIUM PAID FOR PURCHASE OF SECURITIES HELD BY THE BANK UNDER THE HEAD OF MATURITY CATEGORY. 10. GROUND NO. 1, IS AGAINST HOLDING THAT INTEREST ON GOVERNMENT AND OTHER SECURITIES HAS TO BE INCLUDED IN THE INCOME ON DUE BASIS. 10.1 LD. COUNSEL OR THE ASSESSEE SUBMITTED THAT THE SIMILAR GROUND WAS RAISED IN THE A.Y. 2006-07 IN REVENUES APPEAL IN ITA NO. 438 /JP/2009. LD. COUNSEL FOR THE ASSESSEE ADOPTED THE SAME ARGUMENT AS WERE MADE IN THE A. Y. 2006-07 IN ITA NO. 438/JP/2009. 10.2 LD. D/R OPPOSED THE SUBMISSIONS AND SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 10.3 WE HAVE HEARD THE RIVAL CONTENTIONS, THIS ISSU E WE HAVE ALREADY DECIDED AGAINST THE REVENUE BY HOLDING AS UNDER:- 12.3 WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PA RTIES. THE UNDISPUTED FACTS IS THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE 7 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. HONBLE HIGH COURT OF RAJASTHAN IN APPEALS PERTAINI NG TO THE ASSESSMENT YEAR 1997-98 TO 2000-01 & 2004-05 IS NOT CONTROVERTED BY THE REVENUE. LD. COUNSEL HAS INVITED OUR ATTENTION. THE JUDGMENT OF HONBLE HIGH COURT RENDERED IN D.B. INCOME TAX APPEAL NO. 185/2014. TH EREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE FINDING OF THE LD. CIT(A) SAME IS HEREBY AFFIRMED. THIS GROUND OF REVENUES APPEAL IS REJEC TED. 10.4 FOR THE SAME REASONING, THIS GROUND OF REVENUE S APPEAL IS DISMISSED. 11. GROUND NO. 2, IS AGAINST DELEING ADDITION MADE ON ACCOUNT OF EXC ESS OF BROKEN PERIOD INTEREST OVER THE BROKEN PERIOD INTER EST RECEIVED. 11.1 LD. D/R SUPPORTED THE ASSESSMENT ORDER. 11.2 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF THE HONBLE RAJASTHAN HIGH COURT IN ASSESSEES OWN CASE FOR THE A.Y. 2000 -01 IN D.B. INCOME TAX APPEAL NO. 446/2008, WHEREIN THE HONBLE HIGH COURT DECIDE D THE ISSUE IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE SAME, THIS GR OUND OF THE REVENUES APPEAL IS DISMISSED. 12. GROUND NO. 3 , IS AGAINST DELETING THE ADDITION OF RS. 43,66,84, 312/- MADE BY THE AO ON ACCOUNT OF VALUATION OF INVESTMENT BY ADO PTING GLOBAL METHOD OF VALUATION OF SECURITIES AS AGAINST CATEGORY WISE ME THOD OF VALUATION FOLLOWED BY THE ASSESSEE. 12.1 LD. D/R SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 12.2 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE J UDGMENT OF THE HONBLE 8 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. RAJASTHAN HIGH COURT. HE SUBMITTED THAT THE FACTS ARE IDENTICAL AS WERE IN THE A.Y. 2006-07. 12.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . THERE IS NO CHANGE INTO FACTS AND CIRCUMSTANCES AS WERE IN THE AY 2006-07. WE HA VE AFFIRMED THE VIEW OF THE LD. CIT(A) BY OBSERVING AS UNDER:- 14.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) BY FOLLOWING ITS EARLIER YE ARS PERTAINING TO THE AY 2005-06 DELETED THE ADDITION. WE FIND THAT THIS IS SUE WAS ALSO DECIDED BY THE HONBLE RAJASTHAN HIGH COURT IN THE ASSESSEE OWN CA SE IN DB INCOME TAX APPEAL NO. 27/2015 IN FAVOUR OF THE ASSESSEE. THER EFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE FINDING OF THE LD. CIT (A), SAME IS HEREBY AFFIRMED. THIS GROUND OF REVENUES APPEAL IS DISMISSED 12.4 THEREFORE, TAKING A CONSISTENT VIEW, WE REJECT THE GROUND OF THE REVENUE. 13. GROUND NO. 4, DELETING THE ADDITION OF RS. 1,30,10,16,055/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF AMORTIZATION IN RESPE CT OF PREMIUM PAID FOR PURCHASE OF SECURITIES HELD BY THE BANK UNDER THE HELD ON MATURITY CATEGORY. 13.1 LD. D/R SUPPORTED THE ORDER OF THE AO AND ADOP TED THE SAME ARGUMENT AS WERE MADE IN THE AY. 2006-07. 13.2 LD. COUNSEL FOR THE ASSESSEE OPPOSED THE SUBM ISSIONS OF THE LD. D/R AND SUPPORTED THE ORDER OF THE LD. CIT(A), THAT THE ISS UE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE RAJASTH AN HIGH COURT IN ASSESSEES OWN CASE. 9 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. 13.3 WE HAVE HEARD THE RIVAL CONTENTIONS; THERE IS NO CHANGE INTO FACTS AND CIRCUMSTANCES. THE IDENTICAL ISSUE WAS DECIDED BY THIS TRIBUNAL IN ASSESSES OWN CASE IN AY 2006-07 WHEREIN IT HAS BEEN HELD AS UNDE R:- 15.2 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SIMILAR ADDITION WAS MADE IN THE AY 2005-06, THE HONBLE RA JASTHAN HIGH COURT IN D.B. INCOME TAX APPEAL NO. 27/2015, DECIDED THE ISS UE IN FAVOUR OF THE ASSESSE. THE CONTENTION OF THE ASSESSEE IS NOT CON TROVERTED BY THE REVENUE AND HAS ALSO NOT BROUGHT TO OUR NOTICE ANY OTHER CO NTRARY BINDING PRECEDENT. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE IN TO THE FINDING OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THIS GROUND OF RE VENUES APPEAL IS DISMISSED. 13.4 FOR THE SAME REASONING, THIS GROUND OF REVENUE S APPEAL IS REJECTED. 14. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 41/JP/ 2010 IS DISMISSED. ITA NO. 299/JP/2014 (ASSESSEE) 15. NOW, WE TAKE UP ASSESSEES APPEAL IN ITA NO. 29 9/JP/2014 PERTAINING TO THE A.Y. 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE O RDER BY LD. CIT(A) U/S 154 IS ILLEGAL AND BAD IN LAW. 2. LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DIS ALLOWING RS. 19,78,71,896/- ON ACCOUNT OF BROKEN PERIOD INTEREST PAID BY THE BANK BY RELYING ON THE DECISION OF RAJASTHAN HIGH COURT IN CASE OF CIT VS. BANK OF RAJASTHAN LTD. 316 ITR 391 DATED 24.03. 200 8 BY INCORRECTLY DISTINGUISHING THE SUBSEQUENT JUDGMENT OF HONBLE S UPREME COURT IN CASE OF CIT VS. CITI BANK NA IN CIVIL APPEAL NO. 15 49/2006 DATED 12.08.2008. 10 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. 3. LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN MA KING THE ABOVE DISALLOWANCE BY MAKING VARIOUS INCORRECT OBSERVATIO NS AND ALSO NOT CONSIDERING THE VARIOUS CONTENTIONS, RAISED BY THE ASSESSEE. 4. APPELLANT CRAVES TO ADD, AMEND, ALTER OR MODIF Y ANY OF THE GROUND OF APPEAL. 5. THE APPROPRIATE COST BE AWARDED TO THE ASSES SEE. 16. THE ONLY EFFECTIVE GROUND IS AGAINST CONFIRMING THE ACTION OF THE AO BY DISALLOWING THE SUM OF RS. 19,78,71,896/- ON ACCOUN T OF BROKEN PERIOD ACTION, BY RECTIFYING ITS ORDER U/S 154 OF THE ACT. 17. THE FACTS IN BRIEF ARE THAT, THE LD. CIT(A) SOU GHT TO RECTIFY ITS ORDER DATED 9.11.2009 PERTAINING TO ASSESSMENT YEAR 2007-08 AND A RECTIFICATION ORDER WAS PASSED ON 25.03.2014 ON THE GROUND THAT THE RATIO O F HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF CIT VS. BANK OF RAJAS THAN LTD. 316 ITR 391 WAS NOT FOLLOWED. AGGRIEVED BY THIS, THE ASSESSEE HAS ASSA ILED THE CORRECTNESS OF THIS ORDER, IN THE PRESENT APPEAL. 18. GROUND NO. 1 IS AGAINST INVOKING THE PROVISION OF SECTION 154 O F THE ACT. 18.1 LD. COUNSEL FOR THE ASSESSEE REITERATED THE SU BMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. THE SUBMISSIONS OF THE ASSESS EE ARE REPRODUCED AS UNDER:- SUBMISSION:- 1. IT IS SUBMITTED THAT AFTER THE DECISION OF RAJASTHA N HIGH COURT IN CASE OF CIT VS. BANK OF RAJASTHAN LTD. 316 ITR 391 DT. 18.10.20 12, THE SUPREME COURT IN CASE OF CIT VS. CITI BANK NA IN CIVIL APPEAL NO. 1549/2006 DT. 12.08.2008 HAS HELD THAT THE CLAIM OF BROKEN PERIOD INTERACT P AID IS ALLOWABLE IN COMPUTING THE TOTAL INC OME. THUS, WHEN ON THIS IS SUE, THERE IS ALREADY DECISION OF HONBLE SUPREEM COURT, THE ORDER PASSD BY LD. CIT(A) U/S 154 IS ILLEGAL AND BAD IN LAW IN VIEW OF THE DECISION OF S UPREME COURT IN CASE OF CIT VS. VOLKART BROTHERS 82 ITR 50. 11 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. 2. IT IS FURTHER SUBMITTED THAT AGAINST THE ORDER OF H ONBLE ITAT FOR AY 2001- 02, 2002-03, & 2005-06 IN ITA NO. 700,701/JP/2003, 279/JP/2009 & 437/JP/2009 DT. 12.09.2014, ASSESSEE FILED AN APPEA L BEFORE THE HONBLE HIGH COURT OF RAJASTHAN. HONBLE HIGH COURT IN DBI T APPEAL NO. 446/2008 FOR AY 2000-01 DT. 17.05.2017 AND IN DBIT APPEAL NO . 11,12 & 13/2015 FOR AY 2001-02, 2002-03, 2005-06 DT. 22.05.2017 AFTER C ONSIDERING THE DECISION OF HONBLE SUPREME COURT IN CASE OF CIT V. CITI BAN K NA IN CIVIL APPEAL NO. 1549 OF 2006 DATED 12.08.2008 & THE DECISION OF BOM ABY HIGH COURT IN THE CASE OF AMERICAN EXPRESS INTERNATIONAL BANKING COOP ERATION 258 ITR 601 (SLP OF THE DEPARTMENT ON THIS ISSUE WAS DISMISSED BY HONBLE SUPREME COURT IN CASE OF CIT VS. UNION OF INDIA S.L.P. NO. 6815 OF 2004, 268 ITR ( STATUE) 216 AND CIT VS. DEUTSHE BANK A.G: S.L.P. (C .) NO. 3710 OF 2004, 266 ITR (STATUTE) 106, HELD THAT BROKEN PERIOD INTE REST PAID IS ALOWBAE DEDUCTION IN COMPUTING THE TOTAL INCOME. THUS, WHE N TH EHONBLE RAJASTHAN HIGH COURT IN ASSESSEES OWN CASE HAS HEL D THAT BROKEN PERIOD INTEREST PAID IS ALLOWABLE DEDUCTION IN COMPUTING T HE INCOME UNDER THE HEAD PROFITS & GAINS OF BUSINESS, THE ADDITION CONF IRMED BY THE LD. CIT(A) IN ORDER U/S 154 BE DIRECTED TO BE DELETED. 18.2 ON THE CONTRARY, LD. D/R OPPOSED THE SUBMISSIO NS. 18.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD. LD. CIT(A) DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 4. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, SUBMISSION OF THE APPELLANT AND OF THE AO. IT IS NOT IN DISPUTE THAT WHILE DEC IDING HE AFORESAID APPEAL, MY LEARNED PREDECESSOR DID NOT CONSIDER THE DECISIO N OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S BANK OF RAJASTHAN LTD. 316 ITR 391 WHICH IS DIRECTLY ON THE ISSUE AND IN CONTRADISTINCTION TO T HE DECISION OF MUMBAI HIGH COURT IN THE CASE OF AMERICAN EXPRESS BANK REPORTED IN 258 ITR 601. AFTER CONSIDERING ALL THE DECISIONS AND RELEVANT PROVISIO NS ON THE ISSUE, 12 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. JURISDICTIONAL HIGH COURT CATEGORICALLY HELD THAT B ROKEN PERIOD INTEREST IS NOT ALLOWABLE AS DEDUCTION BUT IT WILL BE PART OF COT O F PURCHASE OF SECURITIES. THE RELEVANT PART OF THIS DECISION IS QUOTED BELOW- 4. AFTER DELETION OF THE ABOVE PROVISIONS, THE INC OME EARNED BY THE BANK BY WAY OF INTEREST IS CHARGEABLE UNDER SECTION 28(I ) AS INCOME UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. THEN , A LOOK AT SECTION 36(1)(III) DOES SHOW, THAT THE DEDUCTION PARI MATERIAL IN TERM S OF ERSTWHILE SECTION 19 IS ADMISSIBLE UNDER THIS CLAUSE. FOR THE PRESENT PURP OSE SECTIONS 20 AND 21, AS THEY EARLIER EXISTED ARE NOT RELEVANT FOR THE PRESE NT CONTROVERSY. 1. IT IS IN THIS BACKGROUND, THAT THE LD. TRIBUNAL HAS SET ASIDE THE ORDER OF THE CIT PASSED IN REVISION UNDER SECTION 263, BY HOLDIN G, THAT DY. CIT HAS THOROUGHLY EXAMINED THE CASE OF THE BANK, AND AFTER DISCUSSION ON VARIOUS POINTS. ASSESSING OFFICER HAD ALLOWED THE CLAIM OF THE ASSESSEE. IT HAS FOUND, THAT THE ASSESSING OFFICER HAD EXAMINED THE FACTS OF THE CASE, AND HE HAS APPLIED MIND. THEN, IT WAS CONSIDERED, THAT THE JUDGMENT IN VIJAYA BANK LTD.S CASE (SUPRA) IS NOT APPLICABLE IN THIS CASE, AS THAT JUDGMENT WAS BASED ON THE INTEREST INCOME ASSESSED UNDER SEC TIONS 18 TO 21, WHICH HAVE BEEN OMITTED WITH EFFECT FROM 1-4-1989, AND TH EREFORE, THESE SECTIONS ARE NOT APPLICABLE FOR THE ASSESSMENT YEAR 1990-91 ONWARDS. THEN, REFERENCE HAS BEEN MADE TO THE JUDGMENT IN AM ERICAN EXPRESS INTERNATIONAL BANK-ING CORPORATION V. CIT [2002] 25 8 ITR 601 (BOM), WHICH HAS HELD THAT VIJAYA BANKS CASE (SUPRA) IS O NLY WITH RESPECT TO SECTION 18, AND IS NOT APPLICABLE IN THE CIRCUMSTAN CES, WHEN THE INCOME IS ASSESSED UNDER SECTION 28, AND THAT, IT HAS BEEN HE LD, THEREIN, THAT THE DEPARTMENT OUGHT TO HAVE TAXED INTEREST FOR THE BRO KEN PERIOD INTEREST RECEIVED, AND THE DEPARTMENT OUGHT TO HAVE ALLOWED DEDUCTION, FOR THE BROKEN PERIOD INTEREST PAID. WITH THIS IT HAS BEEN FOUND, THAT SINCE THE INTEREST RECEIVED FOR THE BROKEN PERIOD HAS BEEN TA XED UNDER SECTION 28, THEREFORE, DEDUCTION HAS RIGHTLY BEEN ALLOWED FOR T HE INTEREST PAID FOR BROKEN PERIOD FOR ALL THESE YEARS. IT HAS ALSO BEE N CONSIDERED, THAT AS PER SECTION 29 OF THE BANKING REGULATION ACT, 1949 READ WITH SCHEDULE III, SHARES AND SECURITIES, THOUGH STOCK IN-TRADE, ARE TO BE SHOWN AS INVESTMENT. THIS INVESTMENT AS STOCK-IN-TRADE, BEC AUSE THE ENTIRE SHARES AND SECURITIES ARE STOCK-IN-TRADE, AS THE BANK DEAL S IN SHARES AND SECURITIES, AS PER BANKING REGULATION ACT, 1949 AS WELL AS MEMORANDUM OF ASSOCIATION OF THE COMPANY. THUS, SHARES AND SECUR ITIES ARE STOCK-IN- TRADE. IN THE CASE OF THE BANK AND INVESTMENT REPR ESENTS IN BALANCE SHEET WHICH, IN FACT, IS STOCK-IN-TRADE, FOR ALL PRACTICA L PURPOSES. THEN, CERTAIN OTHER JUDGMENTS OF THE TRIBUNAL WERE RELIED UPON, F OR HOLDING, THAT IF THE SECURITIES ARE HELD AS STOCK-IN-TRADE, THE ENTIRE C ONSIDERATION INCLUDING THE INTEREST ELEMENT IS ALLOWABLE AS REVENUE DEDUCTION, BY WAY OF COST OF PURCHASES,. THUS, FOLLOWING THE JUDGMENT IN AMERIC AN EXPRESS INTERNATIONAL BANKING CORPN.S CASE (SUPRA), THE OR DER OF THE LD. CIT PASSED UNDER SECTION 263 WAS QUASHED. 13 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. 2. A LOOK AT THE JUDGMENT IN VIJAYA BANK LTD.S CASE ( SUPRA) DOES SHOW, THAT OF COURSE THAT JUDGMENT DID NOT CONSIDER THE PROVIS IONS OF SECTION 18, AS THEY EXISTED AT THAT TIME, BUT THEN, A LOOK AT THE QUESTION FRAMED THEREIN, DOES SHOW, THAT THE PRECISE QUESTION WAS, AS TO WHE THER DEDUCTION COULD BE CLAIMED UNDER SECTION 19, 20 AND 37 OF THE INCOM E-TAX ACT, FOR THE AMOUNT OF RS. 58,56, BEING INTEREST ACCRUED ON SECU RITIES TAKEN OVER BY ASSESSEE-BANK, FROM JAYALAKSHMI BANK LTD. AND RS. 1 1,630 BEING THE INTEREST ACCRUED UP TO THE DATE OF PURCHASE, IN THE CASE OF SECURITIES BY THE ASSESSEE BANK FORM THE OPEN MARKET, AND RELYING UPON ENGLISH JUDGMENT IN IR V. PILCHER [1949] 31 TAX CASES 314,3 32 (A), WHEREIN IT WAS HELD THAT IT IS A WELL-SETTLED PRINCIPLE, THAT OUTL AY ON THE PURCHASE OF AN INCOME-BEARING ASSET, IS ;IN THE NATURE OF CAPITAL OUTLAY, AND NO PART OF THE CAPITAL, SO LAID OUT CAN, FOR INCOME-TAX PURPOSES, BE SET OFF AS EXPENDITURE, AGAINST INCOME ACCRUING FROM THE ASSET IN QUESTION, AND IT WAS HELD, THAT IN THAT INSTANT CASE, THE ASSESSEE P URCHASES SECURITIES AND THE PRICE PAID FOR THEM WAS IN THE NATURE OF A CAPI TAL OUTLAY, AND NO PART OF IT CAN BE SET OFF AS EXPENDITURE AGAINST INCOME ACCRUING ON THOSE SECURITIES. SUBSEQUENTLY, WHEN THESE SECURITIES YI ELDED INCOME BY WAY OF INTEREST, SUCH INCOME ATTRACTED SECTION 18. THUS, THE CLAIM FOR DEDUCTION WAS FOUND TO BE NOT ALLOWABLE. 3. THEN, A LOOK AT THE JUDGMENT IN AMERICAN EXPRESS IN TERNATIONAL BANKING CORPN.S CASE (SUPRA) SHOWS, THAT IS DOES NOT LOOK INTO THE JUDGMENT IN VIJAYA BANK LTD.S CASE (SUPRA), AND SUBSTANTIALLY PROCEEDS ON THE ASPECT OF METHOD OF ACCOUNTING ADOPTED BY THE BANK CONCERN ED. THEN, IT WAS CONSIDERED, THAT SINCE AT THE TIME WHEN THE SECURIT Y WAS SOLD, THE ASSESSEE DID RECEIVED AN AMOUNT REPRESENTING INTERE ST FOR THE BROKEN PERIOD, AS WAS PAID BY THE ASSESSEE ALSO, AND THERE FORE, WHEN HE ASSESSEE IS TAXED ON THE AMOUNT RECEIVED COMPONENT THEREOF, NOT ALLOWING DEDUCTION FOR THE BROKEN PERIOD INTEREST, PAID BY T HE ASSESSEE, WOULD RESULT INTO DOUBLE TAXATION. THEREFORE, IT WAS HEL D TO BE AN ALLOWABLE DEDUCTION. TO PRECISELY QUOTE THE WORDS USED IN THE SAID JUDGM ENTS, WHICH READ AS UNDER:- IN THE PRESENT CASE, AS HELD BY THE TRIBUNAL, THE DEPARTMENT HAS PROCEEDED TO COMPUTE THE ENTIRE INCOME UNDER SECTIO N 28. IN THIS CASE, THE DEPARTMENT HAS SOUGHT TO TAX THE BROKEN P ERIOD INTEREST RECEIVED UNDER THE HEAD BUSINESS AND NOT UNDER TH E HEAD INTEREST ON SECURITIES..ONCE THE DEPARTMENT SEEKS TO ASSESS BROKEN PERIOD INTEREST UNDER THE HEAD BUSINESS, THEN THE DEPART MENT COULD NOT HAVE REJECTED THE IMPUGNED ADJUSTMENT IN THE METHOD OF ACCOUNTING ADOPTED BY THE BANK UNLESS THE DEPARTMENT WAS IN A POSITION TO PROVE THAT THE METHOD ADOPTED BY THE BANK DID NOT DISCLOS E THE TRUE AND PROPER INCOME 4. IN OUR VIEW, SO FAR AS TAXABILITY OF INCOME FROM IN TEREST BY THE ASSESSEE, SO ALSO ENTITLEMENT TO CLAIM DEDUCTION, IS A MATTER , WHICH REGARD TO WHICH THERE IS NO MATERIAL OF SIGNIFICANT DIFFERENCE, CON SEQUENT UPON DELETIONS OF 14 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. THE PROVISIONS OF SECTIONS 18 AND 19, OBVIOUSLY SEC TION 20 AND 21 ARE NOT RELEVANT FOR THE PRESENT PURPOSE. THAT BEING THE P OSITION, THE RATIO PROPOUNDED IN VIJAYA BANK LTD.S CASE (SUPRA), EVEN THOUGH IT PROCEEDS ON CONSIDERATION OF THE THEN PROVISIONS OF SECTIONS 18 AND 19, STILL DOES HOLD GOOD. 5. THEN WE TAKE UP THE JUDGMENT IN AMERICAN EXPRESS IN TERNATIONAL BANKING CORPN.S CASE (SUPRA). A READING OF THAT JUDGMENT SHOWS THAT, REASONS GIVEN BY THE BOMBAY HIGH COURT, FOR DISTINGUISHING THE JUDGMENT IN VIJAYA BANK LTD.S CASE (SUPRA) PROCEED O A DIFFERENT LIN E OF REASONING. WHILE IN OUR VIEW, WHEN THE SUPREME COURT JUDGMENT PROCEEDS ON A ESTABLISHED LEGAL PRINCIPLE, DEDUCED FROM PREVIOUS ENGLISH JUDG MENT, WITH ALL HUMILITY AT OUR COMMAND, WE FEEL BOUND BY THE RATIO LAID DOW N IN VIJAYA BANK LTD.S (SUPRA). EVEN OTHERWISE, SO FAR AS THE REAS ONING IN AMERICAN EXPRESS INTERNATIONAL BANKING CORPN.S CASE (SUPRA) IS CONCERNED, WE DO NOT FIND OURSELVES ABLE TO AGREE WITH THE REASONING , INASMUCH AS IF CARRIED TO LOGICAL CONCLUSION, IT PERMITS A POST-MORTEM OF THE PURCHASE COMPONENT OF THE ASSET, AND PERMITS DEDUCTION OF INTEREST ELE MENT PAID, AS BUSINESS EXPENDITURE. WE ARE AFRAID ON THE FACE OF THE JUDG MENT IN VIJAYA BANK LTD.S CASE (SUPRA) THIS CANNOT BE SAID TO BE PERMI SSIBLE. 6. THUS, IN VIEW OF THE RATIO LAID DOWN IN VIJAYA BANK LTD.S CASE (SUPRA), WHICH VERY MUCH APPLIED TO THE CIRCUMSTANCE AND FAC TS OF THE PRESENT CASE, THE JUDGMENT OF THE LD. TRIBUNAL, CANNOT BE S USTAINED. (EMPHASIS APPLIED) FROM THE AFORESAID DECISION WHICH IS BINDING ON ALL APPELLATE AUTHROTIES WORKING HE JURISDICTION OF HONBLE RAJASTHAN HIGH C OURT, CIT(A) WAS BOUND TO FOLLOW THE SAID DECISION EVEN WHEN THERE WERE ITAT DECISIONS IN EARLIER YEARS IN FAVOUR OF APPELLANT OR OTHER HIGH COURTS DECIDED THE ISSUE IN FAVOUR OF APPELLANT. BY NOT CONSIDERING AND FOLLOWING THE EXP RESS DECISION OF JURISDICTIONAL HIGH COURT, CIT(A) COMMITTED AN ERRO R WHICH IS MISTAKE APPARENT FROM RECORD AND IS RECTIFIABLE UNDER SECTION 154 OF IT ACT AS HELD BY SEVERAL DECISIONS. AS AGAINST THIS, APPELLANT RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CITIBANK NA (SUPRA) IN WHICH IN THE FACTS OF THAT CASE, BROKEN PERIOD INTEREST WAS HELD TO BE ALLOWAB LE. THE HONBLE SUPREME COURT IN THE CASE OF CITIBANK NA(SUPRA) HAS HELD AS UNDER:- AFTER GOING THROUGH THE FACTS WHICH ARE SIMILAR TO THE FACTS IN AMERICAN EXPRESS (SUPRA), SINE THE TAX-EFFECT IS NE UTRAL, THE METHOD OF COMPUTATION ADOPTED BY THE ASSESSEE AND ACCEPTED BY THE REVENUE CANNOT BE INTERFERED WITH. WE AGREE WITH THE VIEW EXPRESSED BY TH4E BOMBAY HIGH COURT IN THE AMERICAN EXPRESS (SUPRA) W OULD HAVE NO 15 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. APPLICATION. FOR THE REASONS GIVEN ABOVE, THE QUES TION POSED BEFORE US IN ANSWERED IN THE AFFIRMATIVE I.E. IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IT IS EVIDENT FROM THE ABOVE THAT THE HONBLE SUPRE ME COURT HAS GIVEN ITS FINDING ON THE PECULIAR FACTS OF THE CASE. THE JUDGMENT WAS GIVEN UNDER THE CONTEXT THAT THE TAX-EFFECT WILL BE NEUTRAL AND THE METHOD OF ACCOUNTING WAS ACCEPTED BY THE DEPARTMENT. THE FACTS IN THE I NSTANT CASE ARE REMARKABLY DIFFERENT. NEITHER THE TAX-EFFECT IS NE UTRAL NOR HAS THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE BEEN ACCEPTED B Y THE DEPARTMENT. IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, TH E TAX-EFFECT WILL NOT BE NEUTRAL IF BROKEN PERIOD INTEREST IS CONSIDERED AS COST OF PURCHASE OF SECURITIES NOT SOLD DURING THE YEAR. DISALLOWANCE OF BROKEN P ERIOD INTEREST PAID WOULD LEAD TO AN ADDITIONAL TAX-LIABILITY FOR APPELLANT I N THE INSTANT CASE. FURTHER, THE DEPARTMENT AS NOT ACCEPTED THE TREATMENT OF SECURIT IES A STOCK-IN TRADE BY THE ASESSEE FOR THE PURPOSE OF INCOME TAX ONLY. TH E AO HAS POINTED OUT THE ANAMOLY THAT ON THE ONE HAND THE APPELLANT IS ITSEL F SHOWING THESE SECURITIES UNDER THE HEAD INVESTMENT IN THE BALANCE SHEET AN D ON THE OTHER HAND, THE APPELLANT IS CLAIMING THAT THE SECURITIES ARE STOCK -IN-TRADE SO AS TO GET TAXATION BENEFIT. THE BALANCE SHEET OF THE ASSESEE WHICH IS PREPARED ON THE BASIS OF RBI GUIDELINES CLEARLY REFLECTED SECURITIE S AS INVESTMENT AND NOT AS STOCK IN TRADE. THEREFORE, IT IS CLEAR THAT THE AO HAS NOT ACCEPTED THE METHOD OF ACCOUNTING OF TREATING INVESTMENT IN SECURITIES AS STOCK IN TRADE FOR TAX PURPOSE. FURTHER ON PERUSAL OF FINANCIAL STATEMENT S AS PER ANNUAL REPORT THERE IS NO CLOSING STOCK IN THE BALANCE SHEET. FU RTHER, THE P & L ACCOUNT OF THE ASSESSEE CLEARLY REVEAL THAT THE ASSESSEE HAS A CCOUNTED INTEREST RECEIVED AND INTEREST PAID. IF THE ASSESSEE WAS REALLY ACCO UNTING THE SECURITIES AS STOCK-IN-TRADE, THE ASSESSEE WOULD HAVE SHOWN OPENI NG STOCK AND CLOSING STOCK IN THE P & L ACCOUNT. THEREFORE, FORM THE ME THOD OF ACCOUNTING FOLLOWED BY THE APPELLANT IN PREPARING THE ACCOUNTS AS PER RBI GUIDELINES, IT IS CLEAR THAT PURCHASE OF SECURITIES WERE NOT TREATED AS STOCK IN TRADE. ACCORDINGLY, THE DECISION OF APEX COULD IN THE CASE OF CITIBANK WHICH WAS 16 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. GIVEN IN THE CONTEXT OF SPECIFIC FATS OF THAT CASE I.E. TAX NEUTRALITY AND ACCEPTANCE OF METHOD OF ACCOUNTING OF THE ASSESEE I S NOT APPLICABLE IN THE APPELLANTS CASE AND THEREFORE DOES NOT OVERRULE TH E DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VIJAYA BAN K LTD. ACCORDINGLY, OBJECTIONS GIVEN BY THE APPELLANT AGAINST FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT ARE NOT FOUND SUSTAINABLE . OTHER ARGUMENTS OF THE APPELLANT THAT ITAT IN 97-98 AND 98-99 DID NOT CONSIDER APPELLANTS CLAIM OF TREATING INVESTMENT I N GOVERNMENT SECURITIES AS CAPITAL ASSET IS NOT RELEVANT TO DECIDE THE ISSUE O F BROKEN PERIOD OF INTEREST SINCE BROKEN PERIOD INTEREST IS TO BE CONSIDERED AS PART OF THE COST OF PURCHASE OF SECURITIES IRRESPECTIVE OF THEM BEING T REATED AS CAPITAL ASSET OR NOT. OTHER ISSUES RAISED BY APPELLANT ARE NOT ARIS ING FROM APPEAL ORDER, THE SAME ARE NOT DEALT WITH. SINCE CIT(A) DID NOT FOLLOW THE DECISION OF JURISDI CTIONAL HIGH COURT WHICH HE WAS BOUND TO FOLLOW, THIS IS A CLEAR MISTA KE APPARENT FROM RECORD WHICH IS REQUIRED TO BE RECTIFIED. ACCORDINGLY, TH E ADDITION ON ACCOUNT OF NET BROKEN PERIOD INTEREST MADE BY THE AO, WHICH WAS DE LETED IN THE ORIGINAL APPEAL ORDER, IS NOW SUSTAINED BY RESPECTFULLY FOLL OWING THE DECISION OF JURISDICTIONAL HIGH COURT. THE ORIGINAL APPEAL ORD ER IS RECTIFIED TO THIS EXTENT. 18.4 IT IS CONTENDED BY THE LD. COUNSEL FOR THE ASS ESSEE THAT HONBLE RAJASTHAN HIGH COURT IN ASSESSEES OWN CASE IN DB APPEAL NO. 446/JP/2008 IN THE AY 2000-01 DATED 17/5/2017, DB APPEAL NOS. 11,12,13/2015 FOR T HE AY 2001-02,02-03,05-06 DATED 22/05/2007 HAS ALLOWED THE BROKEN PERIOD INTE REST EXPENSES. LD. D/R HAS NOT DISPUTED THIS FACT. THEREFORE, RESPECTFULLY FOLLOW ING THE HONBLE JURISDICTIONAL HIGH COURT WE HEREBY DIRECT THE AO TO DELETE THE DISALLO WANCE. THUS, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 19. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 299/JP/2014 IS ALLOWED. 17 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. ITA NO.28/JP/2013 20. NOW, WE TAKE UP REVENUES APPEAL IN ITA NO. 28/ JP/2013 PERTAINING TO THE A.Y. 2007-08 IS DIRECTED AGAINST THE ORDER OF THE C OMMISSIONER OF INCOME TAX(APPEALS)-II, JAIPUR, DATED 18/10/2012. THE REVENUE HAS RAISED THE FOLLOWINGS GROUNDS OF AP PEAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS) HAS ERRED IN- (I) HOLDING RE-OPENING OF THE CASE AS ONLY CHANGE OF OP INION OF THE AO THOUGH IT IS APPARENT FROM THE RECORD THAT IT IS NO T MERE CHANGE OF OPINION BUT IT WAS A CASE OF UNDER ASSESSMENT. (II) DELETING THE ADDITION OF RS. 1,25,99,060/- (7.5% OF 2,87,37,353/- + 2,57,47,000+ 11,35,03,112) MADE BY DISALLOWING CLAI M OF DEDUCTION U/S 36(1) (VIIA) AS THIS DEDUCTION IS NOT FOR INCOM E FROM OTHER SOURCES. 21. BRIEFLY, STATED FACTS ARE THAT, THE AO REOPENED THE ASSESSMENT ON THE GROUND THAT THE ASSESSEE DERIVES INCOME MAINLY FOR BANK BU SINESS AND THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED UNDER THE HEAD PROFIT AND LOSS OF BUSINESS FOR PROFESSION. THE ASSESSEE RECEIVED INCOME ON ACCOUNT OF INTEREST OF INCOME TAX REFUND, INSURANCE COMMISSION, LOCKER RENT, LEASE RENTAL AND VARIOUS OTHER INCOMES ASSESSABLE UNDER THE HEAD INCOME FROM THE OTHER SO URCES. SUBSEQUENTLY, THE AO PASSED AN ORDER U/S 143(3) READ WITH SECTION 148 OF THE ACT. AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS, ALLOWED THE APPEAL BY HOLDING THAT THE AO WAS NOT JUSTIFIED IN REOPENING THE ASSESSMENT AS ALL THE MATERIAL FACTS HAD BEEN DISCLOSED BY THE APPELLANT BANK. 22. NOW, THE REVENUE IS IN APPEAL AGAINST THE CORRE CTNESS OF THE ORDER OF THE LD. CIT(A). 18 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. 23. GROUND NO. 1 IS AGAINST HOLDING THAT REOPENING IS ON THE BASIS OF CHANGE OF OPINION. 23.1 LD. CIT(DR) VEHEMENTLY ARGUED THAT LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT LD CIT(DR) SUPPORTED THE ORDER OF THE AO. 23.2 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A). 23.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD. LD. CIT(A) HAS DECIDED THE ISSUE IN PARA 5 READS AS UNDER:- 5. AFTER GOING THROUGH RIVAL SUBMISSIONS FOLLOWING POI NTS EMERGES: 1. INTEREST ON INCOME TAX REFUND, INSURANCE COMMISSION ETC. CONSISTENTLY BEEN DECLARED AS BUSINESS INCOME BY THE APPELLANT B ANK IN ITS RETURN: ALL MATERIAL FACTS HAD BEEN DISCLOSED BY THE APPELL ANT IN THE RETURN. THE APPELLANT IS A BANKING COMPANY WHERE THE ABOE I NCOME LIKE INCOME TAX REFUND INTEREST, INSURANCE COMMISSION, L EASE RENT HAVE CONSISTENTLY BEEN GROUPED IN THE AUDITED ACCOUNTS A S BUSINESS INCOME AND HAVE BEEN SO DECLARED AS BUSINESS INCOME. 2. SUCH BUSINESS INCOME CONSTANTLY BEEN ACCEPTED IN SC RUTINY ASSESSMENTS BY THE DEPARTMENT: SUCH INCOME HAS BEEN ALLOWED BY THE DEPARTMENT IN ALL EARLIER SCRUTINY ASSESSMENTS, INC LUDING SUBSEQUENT ASSESSMENT OF AY 2008-09, 2009-10, 2010-11 & 2011-1 2. THERE ARE SEVERAL CASE LAWS SUPPORTING THE PRINCIPLE OF CONSI STENCY. 3. CHANGE MADE BY BIFURCATING CERTAIN INCOME INTO INCO ME FROM OTHER SOURCES ONLY IN AY 2007-08 THAT TOO U/S 147: IN AL L ASSESSMENTS INTEREST ON REFUND, LEASE RENTALS, INSURANCE COMMIS SION HAVE BEEN ACCEPTED AND ASSESSED AS BUSINESS INCOME. 4. EARLIER SCRUTINY ASSESSMENT OF AY 2007-08 MADE AFTE R PROPER APPLICATION OF MIND BY THE AO AND ON DISCLOSURE OF ALL FACTS BY THE APPELLANT: IT IS SEEN THAT IN AY 2007-08 THE YEA R UNDER CONSIDERATION 19 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. ORDER U/S 143(3) DATED 24-12-2009 DISCUSSED IN PA RA 9 THE DEDUCTION ALLOWABLE U/S 36(1)(VII) & 36(1)(VIIA) AND HELD THA T PROVISION FOR BAD AND DOUBTFUL DEBT DEDUCTION U/S 36(1)(VIIA) SHOULD NOT EXCEED RS. 2,20,50,86,829/-. IN THE COMPUTATION OF IN COME IT WAS STATED AS UNDER: ASSESSED BUSINESS INCOME BEFORE CLAIM U/S 36( 1)(VIIA) RS. 811,49,76,353 LESS: DEDUCTION U/S 36(1)(VIIA) 10% OF RURAL ADVANCE ` RS. 1,69,81,40,688 7.5% OF TOTAL INCOME RS. 60,86,23,226 RS. 2,30,67,63,914 TO BE RESTRICTED UP TO RS. 220,50,86,829 RS.220,50,86,829 THIS SHOW THAT THE DEDUCTION WAS ALLOWED AFTER PROP ER APPLICATION OF MIND AND HAS BEEN ALLOWED BY THE DEPARTMENT IN ALL EARLIER SCRUTINY ASSESSMENTS, INCLUDING SUBSEQUENT ASSESSMENTS OF AY 2008-09, 2009- 10, 2010-11& 2011-12. ALL MATERIAL FACTS HAD BEEN DISCLOSED BY THE APPELLANT IN THE RETURN. THEREFORE THE REASSESSMEN T NOTICE CONSTITUTES ONLY CHANGE OF OPINION ON THE PART OF THE AO. 5. ACTION OF THE AO OF REASSESSMENT CONSTITUTES CHANGE OF OPINION AS PER APE COURT DECISION: FOLLOWING DECISIONS OF HONBLE SUPREME COURT RELIED UPON BY THE APPELLANT IN SUBMISSION DATED 16 -10-2012 DO NOT JUSTIFY REOPENING: 1. CIT VS. KELVINATOR OF INDIA LTD. 320 ITR 561/187 TA XMAN 312 (SC) THE CONCEPT OF CHANGE OF OPINION ON THE PART OF T HE ASSESSING OFFICER TO REOPEN AS ASSESSMENT DOES NOT STAND OBLI TERATED AFTER HT SUBSTITUTION OF SECTION 147 OF THE INCOME-TAX AT, 1 961, BY THE DIRECT TAX LAWS (AMENDMENT) ACTS, 1987 AND 1989. A FTER THE AMENDMENT, THE ASSESSING OFFICER HAS TO HAVE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, BUT THIS DOES N OT IMPLY THAT THE ASSESSING OFFICER CAN REOPEN AS ASSESSMENT ON M ERE CHANGE OF OPINION. THE CONCEPT OF CHANGE OF OPINION MUST BE TREATED AS AN IN-BUILT TEST TO HECK THE ABUSE OF POWER. HENCE AF TER APRIL; 1, 1989, 20 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. THE ASSESSING OFFICER HAS POWER TO REOPEN AN ASSESS MENT, PROVIDED THERE IS TANGIBLE MATERIAL TO COME TO THE CONCLUS ION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASON M UST HAVE A LINK WITH THE FORMATION OF THE BELIEF. 2. CIT VS. FORAMER FRANCE : 264 ITR 567(SC) SUPREME COURT AFFIRMED THE DECISION OF THE ALLAHABA D HIGH COURT IN THE CASE OF FORAMER V. CIT 247 ITR 463, WHEREIN IT WAS, INTER ALIA, HELD BY THE COURT IN THE CONTEXT OF THE PROVISIONS OF SECTION 147/148 OF THE ACT, AS AMENDED WITH EFFECT FROM 1.4 .1989, THAT THE REASSESSMENT CANNOT BE BASED ON A MERE CHANGE OF OP INION AND THAT THE LAW THAT AN ASSESSMENT COULD NOT BE REOPEN ED ON A CHANGE OF OPINION WAS THE SAME BEFORE AND AFTER THE AMENDMENT BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987. IN VIEW OF THE POINTS SUMMARIZED IN THIS PARA 5, TH E AO WAS NOT JUSTIFIED IN REOPENING THE ASSESSMENT AS ALL MATERI AL FACTS HAD BEEN DISCLOSED BY THE APPELLANT LIKE IN EARLIER YEAR WHE RE THE DEPARTMENT HAD ACCEPTED THE SAME AND THE ACTION OF THE AO CONS TITUTED ONLY CHANGE OF OPINION AS EARLIER DEDUCTION WAS ALLOWED AFTER PROPER APPLICATION OF MIND. 23.4 THE ABOVE FINDING ON FACT RECORDED BY THE LD. CIT(A) IS NOT CONTROVERTED BY THE REVENUE AND THE REVENUE COULD NOT CONTROVERT TH E FACT THAT INCOME DERIVED FROM INSURANCE COMMISSION, LEASE RENT HAVE BEEN CON SISTENTLY GROPED IN THE AUDITED ACCOUNTS SUCH AS INCOME HAS BEEN GROUPED AS BUSINES S INCOME AND THE REVENUE HAS NOT DISTURBED THE SAME. NO REASON IS GIVEN AS TO W HY IN THIS YEAR SUCH INCOME BECOMES INCOME FROM OTHER SOURCES. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. 24. GROUND NO. 2 IS READ AS UNDER:- DELETING THE ADDITION OF RS. 1,25,99,060/- (7.5% O F 2,87,37,353/- + 2,57,47,000+ 11,35,03,112) MADE BY DISALLOWING CLAI M OF DEDUCTION U/S 36(1) (VIIA) AS THIS DEDUCTION IS NOT FOR INCOME FROM OTH ER SOURCES. 21 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. 24.1 LD. CIT(DR) SUPPORTED THE ORDER OF THE ASSESSI NG OFFICER. 24.2 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A). 24.3 WE HAVE HEARD THE RIVAL CONTENTIONS, LD. CIT H AS GIVEN FINDING ON FACT BY OBSERVING AS UNDER:- 6. GROUND NO. 2 IS THAT THE AO ERRED IN REDUCING T HE CLAIM OF DEDUCTION U/S 36(1)(VIIA) BY RS. 1,25,99,060/- BY HOLDING THA T SUCH DEDUCTION IS ALLOWED WITH REFERENCE TO BUSINESS INCOME AND NOT T O TOTAL INCOME AND THEREBY NOT CONSIDERING THE INSURANCE COMMISSION IN COME OF RS. 2,87,37,353/-, LEASE RENTALS OF RS. 2,57,47,000/- A ND INTEREST ON INCOME TAX REFUND AMOUNTING TO RS. 11,35,03,112/- F OR THE CALCULATION OF DEDUCTION U/S 36(1)(VIIA). IT IS SEEN THAT THE ASSESSING OFFICER AS PER HIS DI SCUSSION AT PAGE 4-5 OF THE ORDER HELD THAT INSURANCE COMMISSIONER, LEASE R ENTAL AND INTEREST ON INCOME TAX REFUND ARE ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. FURTHER BY REFERRING TO SECTION 28, SEC. 36(1) AND CLAUSE (VIIA) OF SECTION 36(1) HE HELD THAT IT CANN OT BE THE INTENTION OF LAW TO ALLOW DEDUCTION IN RESPECT OF PROVISION FOR BAD AND DOUBTFUL BETS WITH REFERENCE TO THE TOTAL INCOME. ACCORDING TO HI M THE DEDUCTION /S 36(1)(VIIA) IS ALLOWABLE IN RESPECT OF ANY PROVISIO N FOR BAD AND DOUBTFUL DEBTS IN RELATION TO THE BUSINESS ONLY AND IT CANNO T BE ALLOWED WITH REFERENCE TO INCOME ASSESSABLE UNDER OTHER HEADS OF INCOME. ACCORDINGLY HE DISALLOWED CLAIM OF DEDUCTION U/S 36 (1)(VIIA) BY RS. 1,25,99,060/- (7.5% OF 2.87,37,353 + 2,57,47,000 + 11,35,03,112). 7. THROUGH WRITTEN SUBMISSION AND ARGUMENTS IT WAS STA TED THAT THE AO IS MISREADING SECTION 36(1) (VIIA) AS THE SECTION STAT ES THAT THE DEDUCTION IS TO BE LIMITED TO AN AMOUNT NOT EXCEEDING SEVEN AND ONE-HALF PER CENT OF THE TOTAL INCOME (COMPUTED BEFORE MAKING ANY DEDUCT ION UNDER THIS 22 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. CLAUSE AND CHAPTER VIA) AND AN AMOUNT NOT EXCEEDING TEN PERCENT OF THE AGGREGATE AVERAGE ADVANCE MADE BY THE RURAL BRANCHE S OF SUCH BANK. 8. IT IS SEEN THAT SECTION 36(1)(VIIA) PROVIDES FOR TH E DEDUCTION OF 7.5% OF THE TOTAL INCOME, AND THE SAME IS REPRODUCED AS UND ER:- 36(1)(VIIA) IN RESPECT OF ANY PROVISION FOR BAD AN D DOUBTFUL DEBTS MADE BY- (A) A SCHEDULED BANK NOT BEING A BANK INCORPORATED BY O R UNDER THE LAWS OF A COUNTRY OUTSIDE INDIA] OR A NON- SCHEDULE D BANK OR A CO- OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CR EDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOP MENT BANK] , AN AMOUNT NOT EXCEEDING SEVEN AND ONE-HALF PER CENT OF THE TOTAL INCOME ( COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER VIA) AND AN AMOUNT NOT EXCEEDING TEN PE R CENT OF THE AGGREGATE AVERAGE ADVANCE MADE BY THE RURAL BRANCHE S OF SUCH BANK. (EMPHASIS SUPPLIED) FROM THE USE OF WORD TOTAL INCOME AND COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER VIA IN THE SECTION MAKES IT CLEAR THAT DEDUCTION TOWARDS PROVISION FOR BAD A ND DOUBTFUL DEBTS IS ALLOWABLE WITH REFERENCE TO THE TOTAL INCOME AND NO T WITH REFERENCE TO THE BUSINESS INCOME ALONE. FURTHER HONBLE SUPREME COURT IN CASE OF PADMASUNDARA RAO AND OTHER VS. STATE OF TAMIL NADU 255 ITR 147 HELD THAT THE COURT CANNOT READ ANYTHING INTO A STA TUTORY PROVISION WHICH IS NOT MENTIONED. THE AO IN THE PRESENT CASE HAS TRIED TO INTERPRET THE LAW WHICH IS NOT TENABLE AS PER THE P LAIN AND SIMPLE READING OF THE LAW. TOTAL INCOME MEAN ALL INCOME. INCOME FROM INSURANCE COMMISSION, INTEREST ON INCOME TAX REFUND AND LEASE RENTAL ARE INTEGRAL PART OF BANKING ACTIVITIES AS PER THE SECTION 6(1) OF THE BANKING REGULATIONS ACT, 1949. IN THE PAST YEARS D EDUCTION U/S 36(1) (VIIA) HAS BEEN ALLOWED TO THE APPELLANT WITH REFER ENCE TO THE TOTAL INCOME AND NOT WITH REFERENCE TO THE BUSINESS INCOM E. THEREFORE THE DISALLOWANCE MADE BY THE AO OUT OF THE DEDUCTION AL READY ALLOWED U/S 36(1)(VIIA) IS NOT AS PER LAW. THEREFORE, ON MERIT S ALSO THE 23 ITA NOS. 921/JP/2009, 41/JP/2010, 299/JP/2014 & 28/ JP/2013. STATE BANK OF BIKANER & JAIPUR, JAIPUR. DISALLOWANCE MADE BY THE AO IN RE-ASSESSMENT UNDER APPEAL IS NOT MAINTAINABLE AND IS DIRECTED TO BE DELETED. 24.4 THE ABOVE FINDING IS NOT CONTROVERTED BY THE R EVENUE, THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE FINDING OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THUS, THIS GROUND OF REVENUES APPEAL IS DISMISSED. 25. IN THE COMBINED RESULT, APPEALS OF THE ASSESSEE IN ITA NOS. 921/JP/2009 IS PARTLY ALLOWED & ITA NO. 299/JP/2014 IS ALLOWED AND THE APPEALS OF THE REVENUE IN ITA NO. 41/JP/2010 & 28/JP/2013 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT TUESDAY, THE 29 TH DAY OF AUGUST 2017. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 29/08/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- STATE BANK OF BIKANER & JAIPUR, J AIPUR. 2. THE RESPONDENT- ACIT, CIRCLE-6, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 921/JP/2009, 41/JP/2010, 29 9/JP/2014 & 28/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR