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2023 (1) TMI 1227 - AT - Income TaxAdditions on account of special reserve - amount transferred to the capital reserve account - AR submits that the amount transferred to capital reserve fund represents the entrance fees collected from its shareholders, unclaimed deposit represents capital receipts, cannot be taxed as “income” - HELD THAT:- We are of the considered opinion that the entrance fees or subscription fees received by the members is on capital account does not form part of the revenue receipts. Similarly, as regards to the old balance of DD payable to sundry creditors, there is no cessation of liability and mere write off of the DD payable to sundry creditors etc and never the unilateral act on the part of the appellant by writing off of the amount and credit to Profit & Loss Account neither amount to cessation of liability or income. In the circumstances, we direct the Assessing Officer to allow this ground of appeal no.1. Allowability of deduction u/s 36(1)(viii) - The appellant bank had derived income on lending money for the purpose of purchase & construction of houses. There is no dispute that the appellant is specified entity being the cooperative bank as per sub-clause (4) of section 36(1)(viii) of the Act. The term “long term finance” has been defined under clause (h) to mean any loan or advance provided for a period for not less than 5 years. We do not perceive any distinction between term “development of housing in India” and “purchase & construction of housing in India for residential purposes. Thus, we are of the considered opinion that the claim made by the appellant clearly falls within the exemption under the provisions of section 36(1)(viii) of the Act and the assessee bank is entitled for deduction. Accordingly, the ground of appeal no.2 stands allowed.
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