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TMI Blog2013 (6) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as incurred for the purpose of business. 2. That the ld. CIT(A) has erred in law and on facts in replying on the judgment in the case of Karjan Co.op Cotton Sales (199 ITR 17) in which the assessee was involved in ginning/pressing of cotton solely supplied by farmers/members to whom gifts were distributed. The facts of this judgment are not comparable to the assessee who is in banking business." 3. The Assessing Officer while making disallowance of Rs. 15,83,750/- on account of gifts distributed to the share holders has observed as under:- "On going through the P & L A/c, the assessee has debited general meeting expenses of Rs. 25,00,000/- (Appendix-IV). The analysis of above expenses, it was seen that the assessee bank has gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 750/-." The contention of the assessee is not acceptable, because the assessee is a bank and the nature of business of the assessee is banking business. The assessee's argument could not be accepted that the expenditure was incurred simply for keeping alive good image among members, for generating goodwill and for ensuring continuity of business with members and also to maintain cordial relation with staff members. The assessee has relied upon the judgment of the Hon'ble Guj. High Court in the case of CIT v/s. Dacroi Taluka Co. Union Ltd. and Karanjan Co. Op Cotton Sales v/s CIT (Gujrat) (199/ITR/17). The judgment of the jurisdictional High Court is not applicable in this case. The fact of this case is totally different. Since the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing to the assessee-society and for getting if marketed through it, such presents were found necessary for augmenting and maintaining the business prospects of the society. The assessee-society further submitted that in the days of keen competition, it was absolutely necessary for the assessee to maintain goodwill amongst its members and to lure them to continue to do their business with the society. The assessee also argued that income from the work of ginning and pressing the cotton of the members and from marketing the same was the only source of income for the society and for earning this income and for ensuring the some over future years, this type of expenditure was found to be a prudent act of management on the part of the asses so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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