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2023 (2) TMI 844 - AT - Income TaxRevision u/s 263 by CIT - leave encashment being allowed to the assessee despite the same being not allowable under law - HELD THAT:- The issue of assessment order being erroneous on account of the Assessing Officer having allowed the assessee an otherwise ineligible claim of leave encashment amounting to Rs.9,63,399/-, we uphold the order of the Ld. Pr. CIT on account of the same. Provision for diminution in the value of investments - CIT’s finding that the assessee’s claim of provision for diminution in the value of investment was not in accordance with the RBI guidelines and CBDT circulars - HELD THAT:- Having noted the facts that the assessee’s claim was in accordance with RBI guidelines and CBDT notifications in this regard, he appears to have given frivolous reason for holding that they were not in accordance with the same. Even the judicial decisions relied upon by the learned Counsel for the assessee, being decision in the case of Rajkot Dist. Co. Op. Bank Ltd. [2014 (3) TMI 110 - GUJARAT HIGH COURT] clearly supports the case of the assessee. CIT clearly has no basis for finding the claim of the assessee of Provision in the value of investments to be not in accordance with law. We hold that the issue of the claim of the assessee of Provision in the value of investments was duly examined by the AO during assessment proceedings when the assessee had demonstrated the same to be in accordance with RBI guidelines, CBDT notifications and judicial decisions in this regard and the AO therefore had allowed the claim taking a plausible view on the matter. CIT has been unable to demonstrate how the claim was not allowable to the assessee. Therefore, we hold, there is no error in the Order of the AO allowing claim of provision for diminution in the value of investment - The order of the Ld. Pr. CIT holding so is accordingly set aside. Deduction on account of amounts routed not through the P&L account but through Rural Development Fund and Sahkar Prachar Fund (separate funds) - CIT has held that the Assessing Officer should have ascertained whether the amounts so paid could be categorized as incurred wholly and exclusively for the purposes of business of the assessee. Clearly, there is no finding by the Ld. Pr. CIT that this amount was not allowable to the assessee under Section 37(1) of the Act and it has been restored to the Assessing Officer for the purpose of determining the same. Moreover, as the facts demonstrate, the fund out of which the amount was paid related to advertisement fund of the assessee Co-operative bank bearing the name of Sahkar Prachar Fund and the amount of Rs.5,00,000/- had been paid for advertisement purposes only as per the facts noted by the Ld. Pr. CIT himself having been paid to souvenir for “Run For Unity”. Therefore, in the absence of any findings by the Ld. Pr. CIT of any reasons for the claim of deduction on account of the amount of Rs.5,00,000/- paid out of the Sahkar Prachar Fund being not allowable as per the provisions of Section 37(1) of the Act and facts not demonstrating otherwise, the assessment order clearly is not erroneous for having allowed this claim to the assessee. CIT’s order holding the assessment order erroneous on account of allowance of claim of amounts paid through Rural Development Fund and Sahkar Prachar Fund respectively is set aside. The order of the Ld. Pr. CIT passed under Section 263 of the Act is upheld only to the extent of the issue of claim of leave encashment allowed to the assessee while on the remaining issues the order of the Ld. Pr. CIT is set aside. - Decided partly in favour of assessee.
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