TMI Blog2009 (8) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009, by following the decision of the Hon ble Supreme Court in the case of Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677 and in the case of CIT v. Vinay Cement Ltd. [2007] 166 Taxman 62 found that the amount of contribution paid to pension fund which is a recognised pension fund scheme within the time limit, i.e., before the due date of filing of the return of income is an allowable deduction. Hence, to be consistent with the findings of the Tribunal in assessee s own case, respectfully following the decisions of the Hon ble Supreme Court cited supra and the Tribunal decision on this issue for the assessment year 1999-2000, we set aside the orders of the authorities below and allow the claim of the assessee. 4. Coming to Ground No. 4, it is regarding the lease equalisation charges which was disallowed by the authorities below. We have considered the rival submissions and perused the material available on record. The above referred earlier Tribunal order in para 16, pg. 8, by following the decision of the Hon ble Supreme Court in the case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 as well as the decision of the Hon ble Uttaranchal High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... detail and the Tribunal has decided the issue in favour of the assessee. Respectfully following the above Tribunal decision and considering that the assessee-bank is following consistent and regular method of accounting system, we see no justification in interfering with the order of the CIT(A) on this issue of amortisation of premium on Government securities. The Revenue fails on this ground. 8. The last ground is on the allowance of payment of gratuity relating the assessment year 1999-2000. The provision towards payment of gratuity fund was made on 31-3-1999. It is the payment to the approved gratuity fund which was made on 31-12-1999, i.e., within the due date of filing of Income-tax return for this assessment year 2000-01. 9. We have heard the rival submissions and perused the material available on record. The Hon ble Supreme Court in the case of Allied Motors Ltd. ( supra ) held that it is an allowable deduction. The contribution made to provident fund before filing the return could not be disallowed under section 43B is the ratio laid down by the Hon ble Supreme Court in the case of Vinay Cements Ltd. ( supra ). Respectfully following the above decisions, we c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No. 346/Coch./08, the first issue is on the contribution to pension fund. The CIT(A) relied on the decision of the Hon ble Supreme Court in the case of Allied Motors (P.) Ltd. ( supra ) and the decision of the Hon ble Supreme Court in the case of Vinay Cement Ltd. ( supra ) wherein it was held that the amount paid as contribution to the pension fund within the time limit under section 43B is an allowable deduction. Respectfully following the above decisions, cited supra , we confirm the order of the CIT(A) by rejecting the ground of the Department. 15. The next issue is regarding the valuation of unquoted shares which resulted in loss by revaluation. The assessee has relied on the decision of the Hon ble Supreme Court in the case of United Commercial Bank ( supra ) wherein it was observed that if the valuation is found as per the guidelines of RBI, the Assessing Officer is directed to allow the deduction to that extent, it is in conformity with the RBI guidelines. Respectfully, following the decision of the Hon ble Supreme Court, cited supra , we find that there is no justification in interfering with the order of the CIT(A). Hence, we reject this ground of the reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the lease equalisation charges which we have decided already in favour of the assessee. 20. The other grievance of the assessee is on the issue of chargeability of interest under sections 234C and 234D. The ld. Counsel for the assessee submitted that the CIT(A) has not considered the issue, particularly Ground No. 6 in the Ground of Appeals wherein the assessee has challenged the chargeability of sections 234C and 234D interest. To that extent, we could not decide this issue as there is no deliberation on the issue of chargeability of sections 234C and 234D interest by the CIT(A), even though it was specifically raised in the grounds before the CIT(A). Therefore, we remit this issue of chargeability of sections 234C and 234D interest back to the file of the CIT(A) for proper adjudication on merits. As we have already decided the issue on lease equalisation charges in favour of the assessee and against the Department by following the earlier years Tribunal order, we set aside the order of the authorities below. Therefore, the assessee s appeal in ITA No. 406/Coch./07 is partly allowed. 21. Coming to the Department appeal in ITA No. 700/Coch./07 for the assessment year 2003 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) found that the assessee has consistently followed this method of accounting and the appreciation calculation by the Assessing Officer is erroneous which made the CIT(A) to delete the addition on account of appreciation and allowed deduction on account of depreciation. Under the above facts and circumstances of the case, we see no justification in interfering with the order of the CIT(A) on this issue. This issue is decided in favour of the assessee and against the Department. 25. Coming to the third issue, it is regarding deletion of addition being payment of pension otherwise than from the Pension Fund covered under section 36(1)( iv ) of the Act. The assessee-bank has made contribution to the approved Employees Pension Fund Account which was made as a provision for payment of pension on the basis of the actuarial valuation done at the end of the every financial year. The assessee deducted both the contribution to the pension fund and the pension paid directly to the retired employees. It is not disputed before us that the assessee has contributed to the pension fund based on actuarial valuation after deducting pension actually paid to the retired employees. Therefore, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation and deleting the disallowance being depreciation in respect of current category of investments. By following our earlier order on the same issue, we confirm the order of the CIT(A). This ground of the Revenue is dismissed. 30. Coming to the third issue as in Ground No. 4, it is regarding deletion of disallowance of payment of pension otherwise than from the Pension Fund covered under section 36(1)( iv ) of the Act. It is a direct payment of pension. The decision of the Hon ble Supreme Court in the case of T. Stanes Co. Ltd. v. CIT [1991] 188 ITR 237 is directly on the issue. Respectfully, following the above decision, we confirm the order of the CIT(A) who held that it is an allowable business expenditure under section 37. Hence, this Revenue ground is dismissed. 31. Coming to the fourth issue as in Ground No. 5, it is the deletion of disallowance being the amortisation of the premium on account of purchase of permanent category of investments. The ITAT, Cochin Bench in ITA No. 126/Coch./04 dated 19-9-2005 in the case of South Indian Bank Ltd. ( supra ) by relying on its own decision in ITA No. 36/Coch./01 for the assessment year 1996-97 has decided the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, it is regarding the valuation of investments in accordance with the provisions of prudential norms issued by the Reserve Bank of India. The assessee-bank was consistently following proper system of accounting for crediting the interest on securities. However, the broken period interest is an allowable deduction. As per the decision of the Hon ble Kerala High Court in the case of CIT v. South Indian Bank Ltd. [2000] 241 ITR 374, the Hon ble High Court held that such interest paid for purchase of Government securities and Bonds is a deductible business expenditure. Therefore, on this ground, the assessee succeeds. 37. The only ground which was in favour of the Department is regarding the valuation of unquoted investments which we have decided against the assessee and the reasons given by the ld. Commissioner is quite justified. The ld. Commissioner found that the value of unquoted shares in the current category of investments were taken as zero value. Since the assessee is unable to furnish the real market value of such shares, the face value of such shares were to be adopted as followed in the assessment year 1997-98. However, the assessee maintained the argument by relyi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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