Advance tax paid in Form-3 issued under the Direct Tax Vivad Se Vishwas Scheme - HELD THAT:- Today letter dated 19.07.2021 has been placed on record by Ms. Urvashi Dhugga, Sr. Standing Counsel for the respondents, as per which, it has been mentioned that after verification, it has been clarified that there was no wrong claim by the Assessee and credit for this challan has been given in AY 2007-08. It has further been mentioned that Form-3 earlier issued to the Assessee is proposed to be revised and a request mail has already been sent to cancel the earlier issued Form-3. Revised Form-3 giving credit of ₹ 57,26,440/- shall be issued as soon as the earlier Form-3 is cancelled. It is further mentioned that ITBA e-filing portal is not functioning and the process is likely to take some time.
In this view of the matter, nothing survives in the present writ petition, at this stage
Validity of resolution passed in EOGM - petitioner was removed as Director, by the said resolution - HELD THAT:- The removal of directorship of the Petitioner is inconsistent with the restriction provided under the Articles of Association. Therefore, the Petitioner has made prima facie case for grant of interim stay of resolution passed in EOGM dated 31.05.2021.
It is observed that Respondent No.2 has acted ultra vires of the powers conferred under Articles of Association. Therefore, this Bench is of the considered view that the implementation of the Resolutions passed in the board meetings on 12.03.2021, 31.03.2021, 06.05.2021 & 31.05.2021 have also been consequently stayed pending final disposal of the Company Petition - List this matter on 21.10.2021.
Allowability of bad debts and provision for bad debts - HELD THAT:- These questions are covered by the decision of the Supreme Court in Catholic Syrian Bank v. Commissioner of Income Tax [2012 (2) TMI 262 - SUPREME COURT] answering the question in favour of the assessee
Method of valuation of unquoted securities adopted - HELD THAT:- The question is covered against the Revenue and in favour of assessee by following the precedents in Commissioner of Income Tax v. Nedungadi Bank Ltd [2002 (11) TMI 29 - KERALA HIGH COURT] and Commissioner of Income Tax v. Lord Krishna Bank Ltd. [2010 (10) TMI 860 - KERALA HIGH COURT].
Claim of assessee under Section 36(1)(viia) - HELD THAT:- The extent to which the assessee is entitled to claim provision under Section 36(1)(viia) is again considered by the reported judgment of this Court in Lord Krishna Bank Ltd [2010 (10) TMI 860 - KERALA HIGH COURT] - we answer the issue in favour of Revenue and against the assessee
Permission for withdrawal of petition - Seeking release of detenue - HELD THAT:- The counsel for the petitioner seeks and is granted permission to withdraw the petition.
Maintainability of appeal - low tax effect - review petitioners submits that this Court on the basis of Circular No.3/2018 dated 20.8.2018 and Circular dated 8.8.2019 opined that monetary limit was enhanced up to ₹ 1 Crore in respect of the High Court - review is prayed for in the teeth of Para 10(e) of the Circular dated 20.8.2018, which reads as where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ED/DRI/ SFIO / Directorate General of GST Intelligence (DGGI) -
HELD THAT:- As observed by the assessing officer i.e. ACIT, Indore that the search and seizure operation was conducted by the Indore Tax Department and DG, Central Excise Intelligence, Indore which concluded that respondent is associated with Signet Group of Indore and was involved in organized activities of tax evasion, which led ultimately the addition made by the AO. Thus, Clause 10(e) aforesaid is attracted.
On more than one occasion, the Bench put a question to Ms. Mandlik when this scrutiny report was prepared and whether any such material in this regard is produced to show that such report falls within the ambit of Para-10(e) but no response is received by the Bench. Despite repeated query, learned counsel for the petitioners has not chosen to answer as to how the aforesaid falls within the ambit of review jurisdiction.
This is trite that the power of review is limited. Unless it is shown that there exists an error apparent on the record or any other ingredients which are in consonance with Order 47 Rule 1 CPC, interference in review jurisdiction cannot be made. Unfortunately no argument is advanced to bring the present matter within the ambit of principles analogous to Order 47 Rule 1 CPC. In absence thereof, the question of exercising the review jurisdiction does not arise. Review petitions fail and are hereby dismissed.
TP Adjustment of royalty - HELD THAT:- As these services are ultimately benefitting the assessee in terms of increasing its turnover, sales of the assessee is taken as the basis for allocation. This method is consistently followed by the assessee over the years and by the group companies world over.
The royalty payment is based on the agreement between the assessee and its parent company. The agreement is dated 15.12.2001. This issue of payment of royalty was subject matter the appeal be fore the Tribunal for the assessment year 2005-06 [2020 (12) TMI 723 - ITAT DELHI] Thus AO is directed to delete the addition made on account adjustment of royalty.
Tax withholding u/s 192 on Global Accounting Manager (GAM) expenses - AO considered these expenses as payment of salary to non-resident and accordingly held that the same is liable to withholding tax under section 192 of the Act. In the absence of tax withholding, AO disallowed the expense under section 40(a) - HELD THAT:- We find that this issue stands adjudicated by the Coordinate Bench of the Tribunal in taxpayer’s own case for AY 2005-06 [2020 (12) TMI 723 - ITAT DELHI] upheld the order passed by the ld. CIT (A) while deciding the issue in assessee’s favour has given a finding that the payments made by the assessee as GAM charges cannot be treated as payment of salary to non-resident but were in the nature of reimbursement of expenses and there fore assessee was not required to deduct TDS on such payments. - Decided in favour of assessee.
TDS on payment of lease rent charges do not fall in the category of FTS - HELD THAT:- payment of lease rent charges do not fall in the category of FTS. In the absence of any material change in the factual as for A.Y. 2005-06 [2020 (12) TMI 723 - ITAT DELHI] as well as the legal aspect of the assessee, we hereby hold that the disallowance made by the AO is directed to be deleted.
Capital Advance - Assessee purchased software for the purpose managing fixed assets database, cheque preparation software, MIS etc. which was returned due to operational deficiencies - HELD THAT:- The software was at first instance capitalized by the assessee in. its books of accounts and after returning the software, the Assessee had written off the advances paid to Softline considering the same to be irrecoverable.Subsequent to this, during the AY 2011-12, the Assessee received half of the advance written off from Softline which was duly offered to tax by the Assessee under the head ‘other income' in the profit and loss account as evident from schedule 11 of the signed financial statements for the AY 2011-12.
From the facts, it can be concluded that the expense went into drain by de fault and the assessee could recover 50% of the expenses paid. Since, the expenses involved pertain to the purpose of the business and not in the nature of any capital expenditure in real sense, the same can be treated as allowable revenue expenditure. The ground of the assessee is treated as allowed.
TDS u/s 194H - Disallowance u/s 40(a)(ia) - disallowing bank guarantee commission charges and cash management charges under section 40(a)(ia) of the act on basis of Notification No. 56 - 2012 dated 31.03.2012 and holding that TDS was deductible on such payments - HELD THAT:- The Co-ordinate Bench of ITAT Mumbai Benches, Mumbai in the case of Kotak Securities Ltd. [2012 (2) TMI 77 - ITAT MUMBAI] had held that there was no principal agent relationship between a bank issuing bank guarantee and the taxpayer and hence the payment though termed as commission was not covered under section 194H - Thus the ground of appeal is decided in favour of the assessee by the ld. CIT (A). The addition made by the AO is dismissed.
Education cess paid on the income tax - Whether an allowable deduction for computing total income given the fact that the same was not hit by the provisions of Section 40(a)(ii)? - HELD THAT:- Education Cess is not of the nature described in sections 30 to 36, Education Cess is not in the nature of capital expenditure, Education Cess is not personal expense of the Assessee, it is mandatory for it to pay Education Cess and for the purpose of computation of Education Cess, the Income ‘Tax’ is taken as the criteria for computational purpose. Thus, the expense of Education Cess is mandatory expenses to be paid but does not fall under capital expense and personal expenditure and hence may be allowed as deduction.
Keeping in view the provisions of the Act pertaining to Section 40(a)(ii) and Section 115JB, Circular of the CBDT No. 91/58/66- ITJ(19), the orders of Co-ordinate Benches of ITAT and judicial pronouncements of the Hon’ble High Court of Bombay and Hon’ble High Court of Rajasthan, we hereby hold that the assessee is eligible to claim the deduction of the ‘Education Cess’ as per the provisions of Section 37 of the Income Tax Act.
The Bombay High Court allowed the applicant to unconditionally withdraw their application after the court expressed disinclination to grant relief. The application was disposed of accordingly. (Case citation: 2021 (7) TMI 1285 - BOMBAY HIGH COURT)
Validity of reopening of assessment u/s 147 - adjudication be done by the High Court in a writ proceedings under Article 226 of the Constitution of India - petitioner made a submission that the regular assessment was made based on the materials, books of accounts and informations provided by the assessee and was concluded and the reopening of assessment proceedings were initiated on change of opinion and therefore, the petitioner has chosen to approach this Court - HELD THAT:- Mere violation of principles of natural justice is insufficient to entertain a writ proceedings under Article 226 of the Constitution of India, as every Writ Petition is filed based on one or the other ground stating that the principles of natural justice is violated or statutory requirements are not complied with or there is an illegality or otherwise. Thus, dispensing with an appellate remedy is to be granted cautiously in view of the fact that the very purpose and object of legislation providing an appellate remedy cannot be diluted nor the benefit be denied to the aggrieved person to exhaust the same. The statutory appellate authorities are the final fact finding authorities
Routine entertainment of a Writ Petition by dispensing with appellate remedy is not preferable and such an exercise would cause injury to the institutional hierarchy and the importance attached to such appellate institutions. The appellate institutions provided under the statute at no circumstances be undermined by the higher Courts. The appellate forums are the final fact finding authorities and more so, possessing expertise in a particular field.
Thus, the finding of such appellate forums would be a valuable assistance for the purpose of exercise of judicial review by the High Court under Article 226 of the Constitution of India. The High Court cannot conduct a roving enquiry with reference to the facts and circumstances based on the documents and evidences. Based on the mere affidavits filed by the litigants, the disputed facts cannot be concluded. Thus, the importance of fact finding by the appellate forums is of more value for the purpose of providing complete justice to the parties approaching the Court of law.
The point of delay may be an acceptable ground for the purpose of entertaining a Writ Petition. The practise of filing the Writ Petition without exhausting the statutory remedies are in ascending mode and such Writ Petitions are filed with a view to avoid pre-deposits to be made in statutory appeals and on the ground that the appellate remedies are time consuming.
This being the factum established, the petitioner is at liberty to prefer an appeal before the appellate authority having jurisdiction within a period of four weeks from the date of receipt of a copy of this order. In the event of filing any such appeal, the appellate authority is bound to adjudicate the same on merits and in accordance with law and by affording opportunity to the writ petitioner and dispose of the appeal as expeditiously as possible.
Exclusion of time period lapsed due to non-availability of records, assets, books of accounts and Covid-19 from the ongoing CIRP - section 19(2) of the I&B code, 2016 - HELD THAT:- The Applicant states that by way of present Application it seeks an exclusion of the intervening period from the commencement of CIRP i.e., from 05.11.2019 till the disposal of application filed under section 19(2) of I & B Code, 2016 filed on 07.12.2019.
This bench, after taking into consideration the facts and circumstances of the present case and following the law as laid down by the Hon'ble Apex court in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA & OTHERS [2019 (11) TMI 731 - SUPREME COURT], grants a period of 90 days so as to complete a total of 270 days, w.e.f 03.05.2020 i.e., date of completion of 180 days, to the Applicant for completing the CIRP of the corporate debtor in a time bound manner as per the provisions of the I & B Code, 2016.
Stay on proceedings - arrest of respondent - loan fraud - voter fraud - term of office of the Board of Directors of the Cooperative Bank - huge acrimony surrounding the elections - overlapping of the allegations relating to ‘loan fraud’ and ‘voter fraud’ - declaration of result of election - newly elected Board to take charge - preservation of CCTV footage of a particular period - HELD THAT:- It is obvious that the petitioner started a dispute first against the conferment of the title of Chairman Emeritus on the 1st Respondent and then they raised issues with regard to the proposed elections, first in a writ petition filed in February, 2020 and then in a writ petition filed in November, 2020. It is only thereafter that the allegations relating to loan fraud were raised by the petitioner Association. Apparently, the petitioner had the blessings of the powers that be, which is why a direction was issued on 22.01.2021 by the Hon’ble Minister, to the Commissioner of Police to register the complaints and report to the Government.
It was patently an election dispute which was sought to be converted to a criminal case. More often than not election disputes are fought on different turfs, such as polling booths, police stations and court rooms. Sometimes, persons who raise these disputes manage to camouflage their real motive by words clothed in high moral fiber and strong legal content. But unfortunately, the petitioner could not do it successfully in this case, as the election disputes came to the court first before the petitioner could fall back upon allegations of loan fraud. Fortunately, the High Court saw through the game. This is why the High Court in its impugned order, granted the extraordinary relief of stay of further proceedings including the arrest of Respondents 1 to 3 herein. The facts are so glaring and the background setting so shocking, that the High Court correctly found it to be a fit and proper case to grant interim reliefs to Respondents 13 herein.
One of the interim prayers sought by the petitioner in the civil writ proceedings is for the conduct of a forensic audit. The said prayer is pending consideration. Allegations of the nature projected by the petitioner cannot be taken for their face value without a forensic audit and the court cannot go by the ipse dixit of the petitioner - It is completely wrong on the part of the petitioner to contend that the High Court was swayed by the pendency of civil writ proceedings. The High Court actually took note of the manner in which the color of the entire proceedings changed from February 2020 to February 2021 and it is in that background that the learned Judge took note of the pendency of civil proceedings and the overlapping of allegations.
The High Court was perfectly justified in granting interim protection to the Respondents 1 to 3 herein and in ensuring that the supremacy of the ballot is not sabotaged by the authority of the police. Hence the SLPs are dismissed.
Denial of natural justice - petitioner did not have adequate notice or fair opportunity to represent his case - HELD THAT:- As the petitioner’s matter had been adjourned to 21st February, 2020 on 07th February, 2020, yet this Court is of the view that the petitioner did not have adequate notice or fair opportunity to represent his case as neither the daily order-sheets nor the revised cause list had been uploaded on the website of the ITAT. Consequently, the impugned order dated 27th February, 2020 passed by the ITAT in Miscellaneous Application is set aside and the ITAT is directed to hear the said Miscellaneous Application afresh.
This Court is also of the view that non-publication of daily order- sheets as well as the revised cause list on the website by the ITAT results in inconvenience to the litigants in general and to the lawyers in particular.
This Court directs the ITAT to upload the daily order sheets and revised cause list on its website. System in this regard be put in place by the ITAT, if not already there, as expeditiously as possible, preferably, within three months.
Validity of assessment order - the argument raised is that it is only in the impugned order that the pages of the books relied upon have been indicated and the Assessing Authority did not at any point in time furnish the details of comparison and reconciliation of the details to the petitioner - HELD THAT:- Several notices have been issued by the Assessing Authority calling upon the petitioner to appear and collect the records sought for. Two such notices are dated 09.08.2017 and 27.08.2018 calling upon the petitioner to appear on 23.08.2017 and 11.09.2018 respectively to collect the records. There was no response. Finally to notice dated 16.07.2019 calling upon the petitioner to appear on 26.07.2019, the petitioner had appeared on 20.11.2019 and 03.12.2019 and received all documents. There is thus no question in my mind that the petitioner has delayed the matters substantially by not appearing before the Assessing Authority and taking the copies of documents that were being supplied and ultimately the exercise was completed only in the first week of December, 2019, despite the order of this Court having been passed in February, 2017.
The argument raised is that it is only in the impugned order that the pages of the books relied upon have been indicated and the Assessing Authority did not at any point in time furnish the details of comparison and reconciliation of the details to the petitioner. However, reconciliation of the difference in stock is an exercise that is to be undertaken by the assessee in explaining its position and in support of its returns and it is too much to expect the Assessing Authority to mark the relevant pages of the documents relied upon by him in support of the Departmental reconciliation - the petitioner has not made out any legal flaw, in the impugned order either on the aspect of violation of principles of natural justice or on merits, to warrant interference therein.
Seeking grant of anticipatory bail - substance of the allegation is that the Accused did not hand over the cheques due to the farmers for their lands taken over for the project and got the cheques released in the names of other persons thereby defrauding the company and misappropriating its fund - Section 438 of the Code of Criminal Procedure 1973 - HELD THAT:- An Appellate Court or a superior court can set aside the order granting bail if the court granting bail did not consider relevant factors.
There are serious allegations against the Respondent-Accused of a fraudulent misappropriation of amounts intended to be paid by the company to the farmers affected by the work of road widening being undertaken by the complainant. The FIR sets out details of the alleged acts of fraud and misappropriation of funds, as explained earlier. Having regard to the seriousness of the allegations no case for anticipatory bail was made out. The High Court has erred both in law and in its evaluation of the facts.
The orders granting anticipatory bail Under Section 438 to the Respondent-Accused shall accordingly stand set aside - Appeal allowed.
Seeking grant of anticipatory bail - smuggling - recovery of 248 kgs of poppy husk, 1 Kg 500 grams of opium and 199 Kgs khas khas - contraband item - stands of the State is that the petitioner was escorting the canter in which the contraband was present and he was assigned the duty of giving signal in case of presence of police on the way - HELD THAT:- The petitioner having involved on the basis of disclosure statement of co-accused namely Balbir and Rajinder is hit by the ratio of TOFAN SINGH VERSUS STATE OF TAMIL NADU [2020 (11) TMI 55 - SUPREME COURT] wherein it has been observed that the officers who are invested with powers under Section 53 of NDPS Act are the police officers within the meaning of Section 25 of the Evidence Act. Any confessional statement made before the police officer would be hit by Section 25 of the Evidence Act. Statement under Section 67 of NDPS Act cannot be used as a confessional statement in the trial of an offence under NDPS Act.
Addition u/s 68 - On-money received by the assessee - addition being 25% of on money plus accommodation entries - determination of profit element on the on-money receipts which has to be brought to tax - HELD THAT:- As per M/S. TULIP LAND & DEVELOPERS P. LTD. VERSUS DY. CIT, CENTRAL CIRCLE-6 (2) , MUMBAI [2021 (2) TMI 1170 - ITAT MUMBAI] it is not in dispute that the assessee had incurred certain business expenses out of such on-money which are kept outside the books of accounts. Hence, it will be just and fair that only the profit element embedded on any such undisclosed transaction could be brought to tax on an estimated basis. The assessee had already pleaded that onmoney transactions were offered by the assessee’s group concerns @12% of on-money receipts before the Hon’ble Income Tax Settlement Commission and the same has been accepted by the Settlement Commission. Hence, the data and information was indeed available with the ld. CIT(A) to have some rational basis to make profit estimation in the hands of the assessee herein by following 12% thereof from the order of Hon’ble Income Tax Settlement Commission. Accordingly, we direct the ld. AO to add only 12% of on-money receipts as undisclosed income of the assessee for the year under consideration.
TDS u/s 195 - Royalty - Treatment to receipts of assessee’s on account of sale of software to the Indian customers, as royalty - HELD THAT:- As relying on ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED [2021 (3) TMI 138 - SUPREME COURT] , we are of the view that Ld.CIT(A) erred in treating the receipts from sale of software with the support services as royalty.
Disallowance in respect of broken period interest - HELD THAT:- As both the leaned Counsels for the parties agreed that the identical issue raised in this ground by the assessee is now settled in favour of the assessee and against the Revenue by the decisions of the Tribunal rendered in assessee’s own case in assessment years 2008-09, 1996-97, 1995-96 and 1991-92. The relevant findings of the Tribunal in State Bank of India v/s DCIT [2020 (2) TMI 1350 - ITAT MUMBAI] Consistent with the view taken therein, we set aside the impugned order passed by the learned CIT(A) by allowing the ground raised by the assessee. We also observe that the appeal filed by the Revenue before the Hon'ble Jurisdictional High Court for the assessment year 1996-97, was also dismissed vide its order dated 1st August 2016. Thus, ground no.1, is allowed.
Deferred payment guarantee commission - HELD THAT:- As deduction for the deferred payment guarantee commission of the assessment year 1984-85 to 1989-90 and 1996-97. However, both the leaned Counsels for the parties conceded that that identical issue raised in this ground by the assessee is now settled in favour of the assessee and against the Revenue by the decisions of the Tribunal rendered in assessee’s own case in as 2000-01, 1984-85, 1996-97, and 1999-2000 - we set aside the impugned order passed by the learned CIT(A) by allowing the ground raised by the assessee - assessee also brought to our notice that the Assessing Officer has given effect to the order of the Tribunal and has allowed the deduction for deferred payment guarantee commission for the assessment year 1984-85 to 1989-90 and 1996-97. Consequently, the ground raised by the assessee is decided in favour of the assessee.
Disallowance on account of depreciation on securities - HELD THAT:- We have heard both the parties and perused the material on record including the case laws relied upon by the parties. Both the parties agreed before us that identical issue has been decided by the Tribunal and has allowed the claim of depreciation on securities in the assessment year 2000-01, 1996-97, 1997-98, 1998-99, 1999-00. Consistent with the view taken therein, we set aside the impugned order passed by the learned CIT(A) by allowing the ground raised by the assessee. Ground no.3, is allowed.
Disallowance in respect of payments for scientific research - HELD THAT:- Both the parties agreed before us that identical issue in respect of disallowance on account payments for scientific research is decided against the assessee and in favour of the Revenue by the decisions of the Tribunal rendered in assessee’s own case in assessment year 2000-01, 1997-98, 1998-99 and 1999-2000. Consistent with the view taken therein, we uphold the order of the learned CIT(A) by dismissing the ground raised by the assessee.
Disallowance for earning exempt income under section 10(15)(iv)(c), 10(15)(iv)(f), 10(15)(iv)(h), 10(23G) and 10(33) by applying provisions of section 14A - HELD THAT:- We notice that the provisions of rule 8D was introduced only from the assessment year 2008-09 and strictly the rules are not applicable in the current assessment year. However, following the findings of the Co-ordinate Bench decisions rendered in assessee’s own case which has directed the Assessing Officer to estimate the disallowance under section 14A of the Act at one percent of the exempt income. Keeping in view the consistency maintained by the Tribunal in assessee’s own case, we are also inclined to direct the Assessing Officer to estimate the expenditure under section 14A of the Act at the rate of one percent of the exempt income.
Depreciation on account of leased assets - HELD THAT:- As assessee submitted that the assessee has filed appeal against the order passed by the Tribunal, which has been admitted by the Hon'ble Jurisdictional, High Court and pending for hearing and yet no orders have been passed on merit. Keeping this in view and consistent with view taken by the Co-ordinate Bench of this Tribunal in assessee’s own case, we uphold the order of the learned Commissioner (Appeals) on this issue by dismissing the ground raised by the assessee. Ground no.6, is dismissed.
Treating the amount received from Cardif S.A. as revenue receipt - HELD THAT:- We cannot agree that it will fall under non-compete fee or restrictive trade practice. Rather it is towards offering the branch network for the establishment of insurance business. In the changing business scenario, the banking business has huge shift from the traditional banking business. RBI has taken note of it and we noticed that so many banks has established its own insurance business along with the banking business. Some of them has utilised their own brand name. But some of the banks have entered Joint Venture with the international big players in the insurance business.
In this case, the assessee has selected Cardif S.A. The international players will look for readymade establishment to establish their business. The assessee is providing its huge network facility to establish this new line of business along with its regular banking business. The assessee received the onetime premium towards this additional facilities and advantage which it was willing to offer to the other partner. Therefore, in the changing business module in the banking sector, it can only be treated as charges for facilitation offer or advantage for establishing the insurance business in India. Therefore, it cannot be said that it is for non-compete but it is for the advantage offered for the Joint Venture business. Therefore, we are inclined to sustain the addition made by the AO. Thus, ground no.7, raised by the assessee is dismissed.
Disallowance on account of road show, legal expenses and advertisement expenses incurred in connection with the issue of India Millennium Deposits under section 40(1) of the Act on account of non-deduction of tax at source under section 195 - HELD THAT:- We find that identical issue has been decided in favour of the assessee and against the Revenue by the decision of the Tribunal rendered in assessee’s own case in the assessment year 1999-2000 [2018 (9) TMI 2054 - ITAT MUMBAI] -It was also brought to our notice that the learned CIT(A) has also while decided the issue for the year under consideration has relied upon the order of the first appellate authority for the assessment year 1999-2000 holding that the facts of the issue are similar to the assessment year 1999-2000. Consistent with the view taken therein as aforesaid, we set aside the impugned order passed by the learned Commissioner (Appeals) and allow the ground raised by the assessee.
Write-off of bad debts under section 36(1)(vii) of the Act in respect of non-rural advances - HELD THAT:- We find that the issue for our consideration is identical to the issue decided by the Co-ordinate Bench of this Tribunal rendered in assessee’s own case wherein the Tribunal has decided the issue against the assessee and in favour of the Revenue in assessment year 2008-09. Consistent with the view taken therein as aforesaid, we uphold the order passed by the learned CIT(A) by dismissing the ground raised by the assessee.
Disallowance on account of doubtful debts under section 36(1)(viia) - HELD THAT:- As it appears, the issue for our consideration is identical to the issue decided by the Co-ordinate Bench of this Tribunal rendered in assessee’s own case wherein the Tribunal has decided the issue against the assessee and in favour of the Revenue in assessment year 2000-01, 1996-97, 1997-98, 1998-99 and 1999-2000. The learned Sr. Counsel for the assessee further brought to our notice that the assessee had also filed appeal against the order passed by the Tribunal for the assessment year 1996-97, wherein the Hon'ble Jurisdictional High Court vide its order dated 23rd August 2016 [2016 (8) TMI 1441 - BOMBAY HIGH COURT] has decided the issue against the assessee. Consistent with the view taken therein as aforesaid, we uphold the order passed by the learned CIT(A) by dismissing the ground raised by the assessee.
Disallowance in respect of provisions made on account of foreign offices - HELD THAT:- Tribunal in assessee’s own case [2020 (3) TMI 1374 - ITAT MUMBAI] wherein the Co-ordinate Bench Para-26 of its order has restored the issue to the file of the Assessing Officer directing him to decide the issue afresh after following the directions given in the order dated 31st January 2018 passed in assessee’s own case for the assessment year 1999- 2000. Consistent with the view taken therein, we set aside the order of the first appellate authority and restore the issue to the file of the Assessing Officer for deciding the issue afresh.
Levy of interest under section 234D - HELD THAT:- This issue covered against the assessee and in favour of the Revenue by the decision of the Hon'ble Jurisdictional High Court in CIT v/s Indian Oil Corporation Ltd. [2012 (9) TMI 517 - BOMBAY HIGH COURT] wherein the Hon’ble Court has decided identical issue in favour of the Revenue and against the assessee.
Deduction for write-off of the bad debts under section 36(1)(vii) - HELD THAT:- Tribunal rendered in assessee’s own case as well as the decision of the Hon'ble Supreme Court in Vijaya Bank [2010 (4) TMI 46 - SUPREME COURT] relied upon by the learned Counsel for the assessee, both the parties agree before us that identical issue has been decided by the Tribunal in assessee’s own case for the assessment year 1996-97 [2014 (1) TMI 1887 - ITAT MUMBAI], 1997-98, 1998-99, 1999- 2000 [2018 (9) TMI 2054 - ITAT MUMBAI] 2000-01 [2020 (3) TMI 1374 - ITAT MUMBAI], 2008-09 [2020 (2) TMI 1350 - ITAT MUMBAI] wherein the Tribunal has restored the issue to the file of the Assessing Officer adjudication afresh.
Recovery of bad-debts written-off should not be liable to tax under section 41(4) of the Act as the assessee had not claimed deduction under section 36(1)(vii) - HELD THAT:- Tribunal following the order 3rd January 2014, passed in assessee’s own case for the assessment year 1996-97 [2014 (1) TMI 1887 - ITAT MUMBAI] restored the issue to the file of the Assessing Officer and directed him to decide the controversy afresh by giving an opportunity of being heard to the assessee in accordance with law by following similar guidelines as given by the Tribunal in the aforesaid misc. application.
Addition on account of payment made to various schools for reservation of seats for children of the Officers of the Bank - HELD THAT:- The Tribunal in assessee’s own case in State Bank of India [2020 (2) TMI 1350 - ITAT MUMBAI] for the A.Y. 2008-09, has decided this issue in favour of the assessee and against the Revenue.
Allowing the taxing of interest on securities on due basis - HELD THAT:- Tribunal in assessee’s own case in State Bank of India v/s DCIT [2020 (2) TMI 1350 - ITAT MUMBAI] order dated 3rd February 2020, for the A.Y. 2008- 09, has decided this issue in favour of the assessee and against the Revenue.
Addition of net unrealized appreciation on account of change in accounting Policy of investments in the HFT category of income - HELD THAT:- DBOD circular guidelines clearly indicate that bank should not book the unrealized gain as profit or IFT. It is in fact the most Prudent method of accounting. Further, the banks are required to Prepare the financial statements only based on the guidelines and master circular. The whole financial results depend upon the master circular guidelines i.e., the guidelines on provision, valuation of investment, recording of bad debts, etc. The financial records and results depend upon the above uniform guidelines, across the banks. Therefore, the financial assets and liabilities are valued only based on the above master circular. The status of valuation will keep changing year on year. Therefore, there will be up and down on the book result of the banks, which will iron out over the period. It is not expected to revalue the opening and closing stock every year, which will give absurd results. This aspect was already considered by the RBI and the judiciary in the past. It was explained clearly in the decision of the Hon‘ble Karnataka High Court in CIT v/s Corporation Bank Ltd. [1988 (8) TMI 90 - KARNATAKA HIGH COURT] The bank’s financial results are completely different from the regular business results since they are bound by the guidelines of the RBI and the new method of valuation adopted by the banks, henceforth applied on a permanent basis in the later years. Therefore, the contention of the tax authorities are not proper and not as per judicial precedence. Accordingly, the ground raised by the assessee is allowed.
Disallowance of payment made to Federal Reserve Bank of New York and State of New York Banking Department due to the payment being penal in nature - HELD THAT:- The law of allowability of penalty is fully settled by the Hon‘ble Supreme Court in CIT v/s Ahmedabad Cotton Manufacturing Co. Ltd. [1993 (10) TMI 1 - SUPREME COURT] wherein it is held that as per Explanation to section 37, the expenditure incurred for any purpose which is an offence or which is prohibited by law is to be treated to have not been incurred for the purpose of the business and, hence, the payment which is punitive is not allowable. In case the Payment is compensatory in nature, the same is to be allowed. In the given case, the penalty was levied on the non-compliance of accounting procedure and reporting requirements. These are mere infringement of certain rules governing the banking sector. These cannot be treated as punitive in nature. Therefore, these can be classified under compensatory in nature. Therefore, we are inclined to allow these expenses as business expenditure. Hence, the ground no.9, raised by the assessee is allowed.
Deduction for write-off of the bad debts under section 36(1)(vii) - HELD THAT:- As in the light of the decisions of the Tribunal rendered in assessee's own case as well as the decision of the Hon'ble Supreme Court in Vijaya Bank v/s CIT [2010 (4) TMI 46 - SUPREME COURT] relied upon by the learned Counsel for the assessee, both the parties agree before us that identical issue has been decided by the Tribunal in assessee’s own case for the assessment year 1996-97, 1997-98, 1998-99, 1999-2000, 2000-01, 2008-09, wherein the Tribunal has restored the issue to the file of the Assessing Officer adjudication afresh.
Recovery of bad-debts written-off should not be liable to tax under section 41(4) of the Act as the assessee had not claimed deduction under section 36(1)(vii) - HELD THAT:- As restored the issue to the file of the Assessing Officer and directed him to decide the controversy afresh by giving an opportunity of being heard to the assessee in accordance with law by following similar guidelines as given by the Tribunal in the aforesaid misc. application. Consistent with the view as aforesaid, we set aside the order passed by the learned Commissioner (Appeals) and restore the issue to the file of the Assessing Officer with similar direction. We order accordingly. Additional ground no.2, raised by the assessee is allowed for statistical purpose.
Treatment of income earned from foreign branches i.e., whether or not the income earned is liable to be taxed in India - HELD THAT:- Tribunal in assessee’s own case for the assessment year 1996-97, 1997-98, 1998-99, 1999-2000, 2000-01 and 2008-09, wherein the Tribunal following the order 3rd January 2014, passed in assessee’s own case for the assessment year 1996-97 [2014 (1) TMI 1887 - ITAT MUMBAI] restored the issue to the file of the Assessing Officer and directed him to decide the controversy afresh by giving an opportunity of being heard to the assessee in accordance with law by following similar guidelines as given by the Tribunal in the aforesaid misc. application. Consistent with the view as aforesaid, we set aside the order passed by the learned Commissioner (Appeals) and restore the issue to the file of the Assessing Officer with similar direction.
Disallowance on account of staff welfare expenses, disallowance of deduction on account of loss in respect of amortization of securities held in HTM category and taxing of interest on securities - HELD THAT:- As identical issue has also been decided by in assessee’s own case for the assessment year 2001-02, vide Para-44 of this order, wherein, the issue has been decided in favour of the assessee and against the Revenue
Similar matters are listed today at 02.00 PM before a Three-Judge Bench presided over by Hon’ble Sh. Justice A. M. Khanwilkar in Court - tag the instant matters along with the abovementioned matter and the paperbooks to be sent to Court immediately.
Continuation of an adjudication pursuant to a provisional attachment order - sub-section (1) of Section 5 of the Prevention of Money Laundering Act, 2020 - HELD THAT:- This Court is of the view that the order of the Hon’ble Supreme Court in IN RE COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (5) TMI 564 - SC ORDER] has clearly extended the time for all pending proceedings both judicial and quasi-judicial by reason of the order dated 27th April, 2021. The first order was made on 6th May, 2020. The period of 180 days, therefore, did not expire and the time limit for adjudication of 180 days may be deemed to have extended.
This Court is not inclined to stay the proceeding before the adjudicating authority - Let affidavit-in-opposition be filed to the writ application within a period of four weeks from date. Reply, if any, be filed within one week thereafter.
Revision u/s 264 - HELD THAT:- As respondent has dismissed the petitioner’s revision petition without giving any reason on merits, except stating that the petition was premature, as according to the learned Commissioner, the Revenue still had time to file an appeal against judgment in the case of M/s Giesecke and Devrient India Pvt. Ltd.[2020 (10) TMI 750 - ITAT DELHI].
As it is apparent that the learned Commissioner has neither applied its mind to the controversy at hand nor passed a reasoned order. Accordingly, the impugned order dated 31st March, 2021 is set aside and the matter is remanded back to the respondent-PCIT, Delhi-7 for passing a reasoned order within six weeks after giving an opportunity of hearing to the petitioner. This Court clarifies that it has not expressed any opinion on merits of the controversy. All rights and contentions of the parties are left open. In the event the petitioner is aggrieved by the decision of the respondent, it shall be open to the petitioner to file appropriate proceedings in accordance with law, if permissible.
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