Azad Co-operative Bank Ltd., Gadag V. ITO, Gadag

ITA 945/BANG/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5662 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 30-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASHAI
• Assessee Lawyers: ANAND L POTNIS
• Keywords: Business expenditure
• Section: 27; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 945/BANG/2010 ASSESSMENT YEAR : 2007-08 AZAD CO-OPERATIVE BANK LTD., GADAG 582 101. : APPELLANT VS. THE INCOME TAX OFFICER, WARD 1, GADAG. : RESPONDENT APPELLANT BY : SHRI ANAND L. POTNIS, C.A. RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI, ADDL. C IT(DR) O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE BANK I S DIRECTED AGAINST THE ORDER OF THE LD. CIT (A), HUBLI, IN ITA NO: 124/CIT (A), HBL/09-10 DATED: 21.4.2010 FOR THE ASSESSMENT YEAR 2007-08. 2. THOUGH THE ASSESSEE BANK HAD RAISED THREE GROUNDS IN ITS GROUNDS OF APPEAL, THE SUBSTANCE OF THE ISSUE IS CO NFINED TO THE EFFECT THAT THE AO HAD ERRED IN DISALLOWING THE CLAIM OF RS.32 .5 LAKHS BEING BUSINESS EXPENDITURE/LOSS U/S 37 OF THE ACT AND THA T THE CIT (A) HAD NOT ACCEPTED THE PLEA TO CONSIDER THAT THE DEPOSITS WITH THE KCC BANK AS IRRECOVERABLE AS THE SAID BANK HAD BECOME SICK. ITA NO.945/BANG/2010 PAGE 2 OF 10 3. BEFORE VENTURE TO ADDRESS TO THE GRIE VANCE OF THE ASSESSEE, THIS BENCHS ATTENTION WAS DRAWN TO THE FACT THAT THERE WAS A SLIGHT DELAY OF THREE DAYS IN INSTITUTING THIS APPEAL BY THE ASSESS EE BANK. THE ASSESSEE BANK (HENCEFORTH THE ASSESSEE) IN ITS PETITION AC COMPANIED BY AN AFFIDAVIT - THROUGH ITS MANAGER - REPRESENTED THAT ITS MANAGE R WAS UNDER TREATMENT FOR A WEEK FROM 21 ST TO 27 TH JULY, 2010 DUE TO INDISPOSITION WHICH CAUSED THE DELAY OF THREE DAYS IN PREFERRING THIS APPEAL W HICH MAY BE CONDONED AS THE DELAY WAS UNINTENTIONAL AND BEYOND ITS CONTROL ETC. 3.1. AFTER DUE EXAMINATION OF THE SUBMISSIO N OF THE ASSESSEE WHICH WAS SUPPORTED BY A MEDICAL CERTIFICATE, THE DELAY I S CONDONED AND THE REGISTRY WAS DIRECTED TO PLACE THE ASSESSEES APPEA L PAPERS ON RECORD. 4. REVERTING BACK TO THE MAIN ISSUE, IT WA S NOTED THAT DURING THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE HAD CLA IMED IN ITS RETURN OF INCOME A SUM OF RS.32.5 LAKHS - NON-RECOVERABLE DE POSITS AND INTEREST WITH KCC BANK AS BUSINESS EXPENDITURE U/S 37 OF T HE ACT. THE ISSUE, IN BRIEF, WAS THAT THE ASSESSEE, IN ACCORDANCE WITH TH E DIRECTIONS OF RBI, HAD KEPT DEPOSITS [THE AMOUNTS RECEIVED FROM ITS CUSTOM ERS] WITH THE KARNATAKA CENTRAL CO-OPERATIVE BANK LTD., DHARWARD (GADAG BRA NCH) - [KCC BANK]. IT WAS THE CASE OF THE ASSESSEE THAT SINCE THE SAID BANK HAD BECOME SICK, THE ASSESSEE WAS IN NO POSITION TO SALVAGE ANY AMOU NT EITHER FROM THE SAVINGS OR CURRENT ACCOUNTS AND, THUS, CLAIMED RS.3 2.5 LAKHS AS BUSINESS EXPENDITURE U/S 37 OF THE ACT TREATING THE SAME AS ILLIQUID DEPOSIT WITH THE SAID BANK. ITA NO.945/BANG/2010 PAGE 3 OF 10 4.1. AFTER EXAMINING THE PROS AND CONS OF THE ASSESSEES CONTENTIONS AS LAID OUT IN HIS IMPUGNED ORDER, THE AO HAD OBSER VED THAT AS PER THE REPORT OF THE RBI INSPECTORS WHO HAVE ADVISED THE A SSESSEE TO WRITE OFF A PORTION OF THE DEPOSITS OVER A PERIOD OF YEARS, THE ASSESSEE HAD CLAIMED THE DEDUCTION IN ITS COMPUTATION STATEMENT. HOWEVE R, THE ASSESSEE HAD NOT MADE ANY PROVISION IN ITS BOOKS OF ACCOUNT TO P REFER SUCH A CLAIM. BRUSHING ASIDE THE ASSESSEES STAND THAT ENTRY IN T HE BOOKS OF ACCOUNT WAS OF NO CONSEQUENCE AS THE CLAIM WAS NOT A BAD DEBT BUT A CLAIM OF DEDUCTION AS BUSINESS EXPENDITURE U/S 37 OF THE ACT , THE AO TOOK REFUGE U/S 37 OF THE ACT WHEREIN THE PROVISION MAKES IT CL EAR THAT THE ASSESSEE HAD TO MAKE A PROVISION IN ITS BOOKS OF ACCOUNT AND SINCE NO SUCH PROVISION WAS MADE IN ITS BOOKS, BUT, CLAIMED IN ITS COMPUTAT ION OF INCOME AS BUSINESS EXPENDITURE UNDER SAID SECTION, THE SAME WAS NOT ENTERTAINED. 5. AGGRIEVED, THE ASSESSEE TOOK UP THE ISS UE WITH THE LD. CIT (A) FOR SUCCOR. AFTER GIVING DUE WEIGHT-AGE TO THE ASSESSE ES CONTENTIONS AS WELL AS THE REASONING OF THE AO, THE LD. CIT (A) WAS OF THE VIEW THAT 4..HOWEVER, THE ISSUE WHICH ARISES FOR CONSIDER ATION IS WHETHER THE NON-RECOVERABLE PART OF SUCH DEPOSITS M ADE BY THE APPELLANT BANK TO THE KCC BANK LTD. AS PER THE RBI GUIDELINES IS AN ALLOWABLE BUSINESS EXPENDITURE U/S 37 OF THE ACT OR NOT. IN THE PRESENT CASE, THE APPELLANT BANK HAS CLAIMED A PART OF THE DEPOSITS I.E., RS.32.5 LAKHS OUT OF TOTAL DEPOSITS OF RS.280 LAKHS AS BUSINESS EXPENDITURE DURING THE YEAR UNDER CONSI DERATION FOR THE REASON THAT THE KCC BANK WITH WHOM THE DEPOSITS WERE MADE HAD BECOME SICK AND THE AMOUNT BECAME IRRECOVE RABLE. THE APPELLANT BANK HAS FILED THE COPIES OF CORRESPO NDENCE WITH THE KCC BANK, BUT NO CONCLUSIVE PROOF HAS BEEN SUBM ITTED BY THE APPELLANT BANK IN SUPPORT OF ITS CLAIM THAT THE SAID BANK HAS BECOME SICK. THE APPELLANT CONTENDED THAT THE RBI AUTHORITIES ADVISED THE BANK TO WRITE OFF THE AMOUNT DEPOSITED WITH KCC BANK WHICH IS STATED TO HAVE BECOME SICK. THE APPEL LANT, HOWEVER, HAS NOT FILED ANY PROOF WHETHER SUCH AMOUN T OF ITA NO.945/BANG/2010 PAGE 4 OF 10 RS.32,50,000/- OUT OF RS.280 LAKHS HAS BEEN WRITTE N OFF IN THE BOOKS. IN THE ABSENCE OF ANY ENTRY IN THE BOOKS IN THIS REGARD, THE AO IN HIS ORDER HAS RIGHTLY POINTED OUT THAT TO CLAIM BUSINESS EXPENDITURE U/S 37, PROVISION HAS TO BE ROUTED THRO UGH THE BOOKS OF ACCOUNT OF THE APPELLANT BANK. HOWEVER, THE APP ELLANT HAS NOT EXPLAINED THE SAME. IT IS ALSO NOT EXPLAINED A S TO ON WHAT BASIS A SUM OF RS.32.5 LAKHS ONLY, OUT OF TOTAL DEP OSITS OF RS.280 LAKHS HAS BEEN CLAIMED AS BUSINESS EXPENDITURE U/S 37 OF THE ACT. IF, ACCORDING TO THE APPELLANT BANK, THE ENT IRE DEPOSIT AMOUNT HAS BECOME IRRECOVERABLE DUE TO THE REASON T HAT KCC BANK LTD. HAS BECOME SICK, IN THAT CASE ENTIRE DEPO SIT AMOUNT BECOMES IRRECOVERABLE, THEREFORE, CLAIMING PART OF THE AMOUNT OF RS.32,50,000/- ONLY AS DEDUCTION AS BUSINESS EXPEND ITURE U/S 37 OF THE ACT, LEAVING THEREBY A SUBSTANTIAL AMOUNT OF DEPOSITS STILL LYING WITH THE KCC BANK LTD. IS AN INDICATOR THAT T HE LIABILITY OF KCC BANK LTD. HAS NOT CEASED AND THE KCC BANK LTD. IS STILL A CREDITOR TO THE APPELLANT BANK AND THE APPELLANT BA NK HAS THE LEGAL RIGHT TO RECOVER THE DEPOSITS FROM THE KCC BA NK. S. 37 OF THE ACT CLEARLY STIPULATES THAT THE EXPENDITURE INC URRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS ONLY CA N BE CLAIMED AS BUSINESS EXPENDITURE U/S 37. THE DEPOSITS MADE BY THE APPELLANT BANK WITH THE KCC BANK LTD. AS PER THE RB I GUIDELINES ARE NOT ALLOWABLE AS BUSINESS EXPENDITUR E WITHIN THE AMBIT OF S.37 OF THE ACT. THE APPELLANT BANK HAS N OT CLAIMED IT AS BAD DEBT ALSO AS THE SAME IS ALSO NOT COVERED BY THE PROVISIONS OF S.36(1)(III) OF THE ACT. SO FAR AS THE CLAIM OF THE APPELLANT, IT BEING A BUSINESS LOSS IS CONCERNED, IT IS SEEN THAT THE APPELLANT HAS NOT BROUGHT OUT A CASE AS TO HOW THE DEPOSITS A MOUNT WITH THE BANK HAS BECOME A LOSS TO THE APPELLANT WHEN TH E APPELLANT HAS NOT TAKEN ANY LEGAL RECOURSE TO RECOVER THE SAM E. THE APPELLANT BANK STATES TO HAD BEEN DEPOSITING THE AM OUNT WITH THE KCC BANK LTD/APEX BANK AS PER THE RBI GUIDELINES SI NCE INCEPTIONS, THEREFORE, SUCH CLAIM OF DEDUCTION OF P ART AMOUNT OF DEPOSITS OUT OF TOTAL DEPOSITS AS BUSINESS EXPENDIT URE AS PER THE CONVENIENCE OF THE APPELLANT BANK IN A PARTICULAR Y EAR IS NOT JUSTIFIED 5.1. DISTINGUISHING THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF CIT V. MYSORE SUGAR CO. LTD. [46 ITR 6 49 (SC)] ON WHICH THE ASSESSEE HAD PLACED RELIANCE; THE LD. CIT (A) HAD D ECLINED TO INTERFERE WITH THE FINDING OF THE AO ON THIS SCORE. ITA NO.945/BANG/2010 PAGE 5 OF 10 6. NOT SATISFIED WITH THE FINDING OF THE LD. CIT (A) CITED SUPRA, THE ASSESSEE HAS COME UP WITH THE PRESENT APPEAL. DU RING THE COURSE OF HEARING, SHRI ANAND L. POTNIS, THE LD. A.R HAD PUT FORTH HIS SPIRITED ARGUMENTS AT LENGTH, THE SUBSTANCE OF WHICH, ARE SU MMARIZED AS UNDER: - THAT THE ASSESSEE HAD KEPT RS.280 LAKHS AS DEPOSITS WITH KCC BANK IN ACCORDANCE WITH THE RBI GUIDELINES (TO MAINTAIN THE STATUTORY LIQUIDITY RATIO) WHICH HAD BECOME SICK IN THE YEAR 2001-02; THAT THE SAID BANK HAD NEITHER HONOURED THE CHEQUES FOR WITH DRAWAL NOR REFUNDED THE DEPOSITS; - THE RBI INSPECTORS REPORT STATES TO WRITE OFF THE DEPOSITS WITH THE SAID BANK OVER A PERIOD OF TIME; THAT THE SAID BANK HAD NOT REFUNDED THE DEPOSITS AMOUNTS AND THE ASSESSEE WAS FORCED TO RENEW OUR DEPOSITS AS OTHERWISE THE ASSESSEE WILL NOT BE ELIGIBLE FOR ANY INTEREST ALSO; - THE RBI HAD ADVISED TO WRITE OFF THE DEPOSITS WITH THE SAID BANK OVER A PERIOD OF TIME AS IT WAS NOT POSSIBLE TO RECOVER TH E ENTIRE DEPOSITS AND, THUS, THE ASSESSEE HAD CLAIMED RS.32.5 LAKHS A S BUSINESS EXPENDITURE U/S 37 OF THE ACT - RELIES ON CASE LAWS: (I) CIT V. MYSORE SUGAR CO. LTD. 46 ITR 649 (SC) (II) CIT V. INDEN BISELERS 91 ITR 427 (MAD) (III) CIT V. INDEN BISELERS 181 ITR 69 (MAD) (IV) CHENAB FOREST CO. V. CIT 96 ITR 568 (J&K) (V) ACIT V. FOSECO INDIA LTD. (2009) 41A-BCAJ 161 (VI) ITO V. KARNATAKA CENTRAL CO-OP BANK LTD. 266 ITR 63 5 (KAR) (VII) KEDARNATH JUTE MFG. CO. LTD. V. CIT 82 ITR 363 (SC) (VIII) CBDT CIRCULAR NO.14 DT: 11.4.1955 6.1. ON HER PART, SMT. JACINTA ZIMIK VASAH AI, THE LD. D R PICKED UP A LEAF OUT OF THE LD. CIT (A)S FINDING TO DEFEND THE REVENUES STAND THAT A SUBSTANTIAL AMOUNT OF DEPOSITS WAS STILL LYING WITH THE KCC BANK WHICH WAS AN INDICATION THAT THE LIABILITY OF KCC BANK HAD NO T CEASED AND THE SAID BANK WAS STILL A CREDITOR TO THE ASSESSEE BANK AND THE ASSESSEE BANK HAD THE LEGAL RIGHT TO RECOVER THE DEPOSITS FROM THE DE POSITED BANK. IT WAS, ITA NO.945/BANG/2010 PAGE 6 OF 10 FURTHER, ARGUED THAT THE ASSESSEE HAD NOT BROUGHT O UT ANY CREDIBLE CASE AS TO HOW THE DEPOSITED AMOUNT HAD BECOME A LOSS TO TH E ASSESSEE AND, THEREFORE, THE LD. CIT (A) WAS WITHIN HIS DOMINION TO SUSTAIN THE STAND OF THE AO WHICH REQUIRES NO INTERVENTION BY THIS BENCH AT THIS STAGE. 7. WE HAVE DULY EXAMINED THE RIVAL SUBMISSI ONS, METICULOUSLY PERUSED THE RELEVANT CASE RECORDS AND ALSO THE EVID ENCES PRODUCED BY THE LD. A R DURING THE COURSE OF HEARING TO SUPPORT HIS CLIENTS STAND. 7.1. THE PRIME QUESTION WHICH DRAWS THE CRUCIA L ATTENTION, AS RIGHTLY HIGHLIGHTED BY THE LD. CIT (A) IN HIS FINDING UNDER CHALLENGE, IS THAT WHETHER THE NON-RECOVERABLE OF THE AMOUNTS DEPOSITE D WITH KCC BANK LTD. BY THE ASSESSEE IS AN ALLOWABLE BUSINESS EXPENDITUR E U/S 37 OF THE ACT? AS DESCRIBED SUPRA, THE ASSESSEE HAD CLAIMED A PART OF SUCH DEPOSITS, SAY RS.32.5 LAKHS OUT OF TOTAL DEPOSITS OF RS.280 LAKHS AS BUSINESS EXPENDITURE DURING THE YEAR UNDER DISPUTE. THE ASSESSEES SUCH A CLAIM WAS MAINLY BASED ON A REASONING THAT KCC BANK HAD BECOME SICK AND THE SAID AMOUNT BECAME IRRECOVERABLE. THE ASSESSEE WAS PURP ORTED TO HAVE BEEN INFLUENCED BY THE REPORT OF THE RBI INSPECTORS WHO HAVE ADVISED THE ASSESSEE BANK TO WRITE OFF A PORTION OF THE DEPOSIT S OVER A PERIOD OF YEARS ETC. FOR AN ARGUMENT SAKE WITHOUT YIELDING TO THE ASSESSEES CLAIM, IF THE ENTIRE DEPOSITS WITH THE KCC BANK BECAME IRRECOVERA BLE DUE TO THE REASON THAT THE SAID BANK HAD BECOME SICK ETC., THE ENTIRE SUM OF RS.280 LAKHS BECAME IRRECOVERABLE AND THE ASSESSEE SHOULD HAVE MADE A CLAIM OF DEDUCTION FOR THE ENTIRE SUM, IN STEAD AND RATHER S TRANGELY, IT HAD RESORTED TO CLAIM ONLY A SUM OF RS.32.5 LAKHS AS A DEDUCTIO N WHICH GOES WITHOUT ITA NO.945/BANG/2010 PAGE 7 OF 10 SAYING THAT THE LIABILITY OF KCC BANK HAD NOT CEASE D AND THE SAID BANK WAS WITHIN THE PARAMETER OF A CREDITOR TO THE ASSESSEE BANK AND, THUS, THE ASSESSEE WAS WELL WITHIN ITS LEGAL RIGHT TO RECOVER THE DEPOSITS AMOUNT FROM KCC BANK. OSTENSIBLY, NO LEGAL ACTION WAS CONTEMPL ATED TO RECOVER THE PUBLIC MONEY DEPOSITED WITH KCC BANK EXCEPT WRITING A FORMAL LETTER TO REFUND THE DEPOSIT AMOUNT ETC. WHICH WAS AN INDICAT OR THAT THE ENTIRE DEPOSITS HAVE NOT REALLY BECOME IRRECOVERABLE AS PO RTRAYED BY THE ASSESSEE. FURTHERMORE, THE ASSESSEE IN ITS REPLY D ATED 9.11.2009 [SOURCE: P 8 OF THE ASST. ORDER] TO THE AO HAD UNWITTINGLY A DMITTED THAT THE DEPOSITS WITH KCC BANK HAVE BEEN DULY RENEWED AFTER MATURITY , WHICH IMPLICITLY MAKES IT CLEAR, AS RIGHTLY ATTRIBUTED BY THE AO AT PARA 9 OF HIS IMPUGNED ORDER, THAT KCC BANK HAD NOT BECOME TOTALLY SICK AND LIQUIDATED AND THE DEPOSITS WITH IT WERE RENEWED FOR FURTHER PERIOD. THE ASSESSEE, IN ITS GROUNDS OF APPEAL BEFORE THE LD. CIT (A) [ON P.8 OF FORM NO.36] HAD UNAMBIGUOUSLY ACKNOWLEDGED THAT IN OUR CASE ALSO THE SAID BANK DID NOT REFUND OUR MONEY AND WE WERE FORCED TO RENEW OUR DEPOSITS AS OTHERWISE WE WILL NOT BE ELIGIBLE FOR ANY INTEREST ALSO . 7.2. REVERTING BACK TO THE ASSESSEES CLAIM OF RS.32.5 LAKHS AS BUSINESS EXPENDITURE U/S 37 OF THE ACT WHICH CLEARL Y SPECIFY THAT THE EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS ONLY CAN BE CLAIMED AS BUSINESS EXPENDITURE. AS A MATTER OF FACT, THE ASSESSEE HAD NOT BROUGHT ON RECORD ANY CLINCHING EV IDENCE TO JUSTIFY THAT THE DEPOSIT AMOUNTS WITH KCC BANK HAVE BECOME A LOS S OR RATHER IRRECOVERABLE WITHOUT MAKING AN ATTEMPT TO CONTEMPL ATE LEGAL RECOURSE TO ITA NO.945/BANG/2010 PAGE 8 OF 10 RECOVER THE SAID DEPOSITS. MOREOVER, NO PROVISIONS WHATSOEVER HAVE BEEN MADE IN ITS BOOKS OF ACCOUNT FOR SUCH AN EVENTUALIT Y. 7.3. LET US NOW TURN OUR ATTENTION TO THE JU DICIAL PRONOUNCEMENTS TO SOME OF WHICH, THE ASSESSEE HAD PLACED PROFOUND REL IANCE. (I) THE RULING OF THE HONBLE APEX COURT IN THE CA SE OF CIT V. MYSORE SUGAR CO. LTD. CITED SUPRA CAN NOT COME TO THE RESC UE OF THE ASSESSEE AS THE SAID RULING WITH DUE RESPECTS, WE WOULD LIKE TO POINT OUT THAT THE ISSUE BEFORE THE HONBLE COURT WAS ON A DIFFERENT FOOTING WHICH HAS NO RELEVANCE TO THE ISSUE ON HAND AND THUS, WE ARE IN TOTAL AGRE EMENT WITH THE LD. CIT (A) IN DISTINGUISHING THE CASE WITH THAT OF THE ISS UE ON HAND. (II) THE ASSESSEE RELIED ON YET ANOTHER RULING OF THE HONBLE APEX COURT IN THE CASE OF KEDARNATH JUTE MFG. CO. LTD. V. CIT REPORTED IN 82 ITR 363 (SC). THE ISSUE BEFORE THE HONBLE COURT WAS THE S ALES-TAX PAYABLE FOR THE DEMAND RAISED ON THE BASIS OF SALES MADE DURING THE ACCOUNTING YEAR AND THE ASSESSEE HAD DISPUTED THE LIABILITY TO PAY THE SALE-TAX AND NOT MAKING ANY PROVISION IN ITS BOOKS ETC., AFTER DELIBERATIN G THE ISSUE IN DEPTH, THE HONBLE COURT HAD RULED THAT THE ASSESSEE WAS ENTIT LED TO DEDUCT THE AMOUNT OF SALE-TAX ON THE BASIS OF LIABILITY INCURR ED AND THE ABSENCE OF ENTRIES IN THE BOOKS WAS NO BAR. WITH HIGHEST REGARDS, WE RECORD OUR CONSIDERED VIEW THAT THE RULING OF THE HONBLE COURT HAS NO RELEVANCE TO THE ISSUE ON HAND IN THE ESSENCE THAT THE PRESENT ASSESSEE HAD NOT INCURRED ANY EXPENDITURE WHATSOEVER WHOLLY AND EXCLUSIVELY FOR THE PURPOSE O F ITS BUSINESS TO PLACE SUCH A CLAIM U/S 37 OF THE ACT. IN FACT, THE DEPOS ITS WHICH THE ASSESSEE ITA NO.945/BANG/2010 PAGE 9 OF 10 PURPORTED TO HAVE BEEN MADE WITH KCC BANK HAVE NOT BECOME IRRECOVERABLE AS ALLEGED BY THE ASSESSEE SINCE, IN ITS OWN ADMISSION, THE DEPOSITS HAVE BEEN RENEWED FOR FURTHER PERIOD AND, THUS, THEY HAVE NOT BECOME IRRECOVERABLE AS PORTRAYED BY THE ASSESSEE. MOREOVER, THE ASSESSEE HAD NOT SHOWN THE WHOPPING SUM OF RS.32.5 LAKHS BEING BUSINESS EXPENDITURE IN ITS BALANCE SHEET, HOWEVER, FINDING A PLACE IN ITS COMPUTATION OF INCOME. 7.4. TAKING INTO ACCOUNT ALL THE FACTS AN D CIRCUMSTANCES OF THE ISSUE AS DELIBERATED UPON IN THE FORE-GOING PARAGRAPHS, W E ARE OF THE FIRM VIEW THAT THE ASSESSEES CLAIM OF RS.32.5 LAKHS BEING BU SINESS EXPENDITURE U/S 37 OF THE ACT WAS NOT AN ALLOWABLE DEDUCTION AND TH E AUTHORITIES BELOW WERE QUITE JUSTIFIED IN THEIR STAND WHICH REQUIRES NO INTERVENTION BY THIS BENCH, IT IS ORDERED ACCORDINGLY. 7.5. BEFORE PARTING WITH, WE HAVE DULY P ERUSED THE OTHER CASE LAWS ON WHICH THE ASSESSEE HAD PLACED ITS FAITH AND OF T HE CONSIDERED VIEW THAT THEY WERE DISTINGUISHABLE AND WERE NOT APPLICABLE T O THE FACTS OF THE ISSUE ON HAND. 8. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF APRIL, 2011. SD/- SD/- ( GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 8 TH APRIL, 2011. DS/- ITA NO.945/BANG/2010 PAGE 10 OF 10 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.