M/s. Karur Vysya Bank Ltd., Karur V. ACIT, Trichy

MA 205/CHNY/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1353 (ITAT-CHENNAI)
• Duration Of Justice: 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 23-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: N QUADIR HOSEYN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI [BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMB ER AND SHRI S. S. GODARA, JUDICIAL MEMBER] M.P.NO.205/MDS/2013 [IN I.T.A.NO.931/MDS/2011] ASSESSMENT YEAR : 2006-07 M/S THE KARUR VYSYA BANK LTD ERODE ROAD KARUR 639 002 VS THE ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE I TRICHY [PAN AAACT 3373 J ] (APPELLANT) (RESPONDENT) PETITIONER BY : SHRI N. QUADIR HOSEYN, ADVOCATE RESPONDENT BY : SHRI S. DASGUPTA, JCIT DATE OF HEARING : 10-01-2014 DATE OF PRONOUNCEMENT : 10-01-2014 O R D E R PER S.S.GODARA, JUDICIAL MEMBER THE INSTANT PETITION U/S 254(2) OF THE INCOME-TA X ACT, 1961 (IN SHORT THE ACT), HAS BEEN FILED BY THE ASSESS EE SEEKING MODIFICATION/RECTIFICATION OF THE ORDER DATED 17.1. 2013 PASSED BY THE TRIBUNAL. 2. IN THE COURSE OF HEARING, THE CONTENTION OF THE AS SESSEE IS THAT WHILST UPHOLDING THE DISALLOWANCE OF ` 4,13,43,888/- MADE BY THE M.P.NO.205/13 :- 2 -: ASSESSING OFFICER AND AFFIRMED BY THE CIT(A) PERTAI NING TO EX-GRATIA PAYMENTS MADE TO ITS EMPLOYEES, THE TRIBUNAL DID NOT CONSIDER THE CASE LAWS PLEADED IN THE GROUNDS. 3. THE REVENUE SUPPORTS THE ORDER OF THE TRIBUNAL TO SUBMIT THAT NO INTERFERENCE U/S 254(2) OF THE ACT IS CALL ED FOR. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. IT EMANA TES TO US THAT WHILST DECIDING THE ASSESSEES APPEAL FOR ASS ESSMENT YEAR 2006- 07, WE HAD CONFIRMED THE IMPUGNED DISALLOWANCE BY H OLDING THAT THE PAYMENTS IN QUESTION ARE NOTHING BUT BONUS WHICH IS ONLY AN APPROPRIATION OF THE PROFITS. A PERUSAL OF THE PLE ADINGS RAISED BY THE ASSESSEE IN ITS GROUNDS REVEALS THAT IT HAD ALSO QU OTED VARIOUS CASE LAWS IN SUPPORT OF THE ARGUMENTS. ADMITTEDLY, THE SAME HAVE NOWHERE BEEN TAKEN UP IN THE ORDER SOUGHT TO BE MODIFIED/RE CTIFIED. ACCORDINGLY, TO THIS LIMITED EXTENT, WE RECALL OUR ORDER TO RE-EXAMINE THE ASSESSEES CONTENTIONS ON MERITS. 5. COMING TO THE DISALLOWANCE ON MERITS, THE ONLY REAS ON STATED RIGHT FROM ASSESSING OFFICER TILL THE TRIBUNAL HA S BEEN THAT THE PAYMENT OF EX-GRATIA AMOUNTS TO BONUS IN THE NATURE OF APPROPRIATION OF PROFITS. FROM THE CASE LAW QUOTED BY THE ASSES SEE [1994] 208 ITR M.P.NO.205/13 :- 3 -: 1002(CAL) CIT VS NATIONAL ENGINEERING INDUSTRIES LT D. IT TURNS OUT THAT SUCH A PAYMENT IS ALLOWABLE AS EXPENDITURE. THERE FORE, THE ASSESSEES CORRESPONDING GROUND IN THE APPEAL IS D ECIDED AGAINST THE REVENUE AND THE DISALLOWANCE IN QUESTION IS DELETED . 6. THE ASSESSEES MISCELLANEOUS PETITION IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 10 TH OF JANUARY, 2014, AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (S. S. GODARA) JUDICIAL MEMBER DATED: 10 TH JANUARY, 2014 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR