TMI Blog2011 (12) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... Adv.-AR ORDER Per Sanjay Arora, AM: These are a set of two cross Appeals, i.e., by the assessee and the Revenue, in respect of the assessments for two consecutive years, being A.Y. 2005-06 and 2006-07, contesting the impugned orders by the first appellate authority, partly allowing the assessee s appeals directed against the assessments under section 143(3) of the Incometax Act, 1961 ( Rs.the Act hereinafter) vide separate orders of even date, i.e., 21-11-2008. The appeals for the two years raising common issues, were taken up for hearing together and are being disposed of by a common, consolidated order. Asstt.Year 2005-06 (Assessee s appeal in I.T.A. No. 93/Coch/2009) 2. The first issue in this appeal is with reference to the disallowance in the sum of Rs.59,22,784/-by applying s. 14A of the Act, with the impugned expenses including the purchase cost of interest-free securities, as also the proportionate share of administrative expenses, i.e., Rs.58,641/-. It was the common contention of the parties during hearing before us that though the matter stands decided in the assessee s favour by the tribunal in the assessee s own case for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ands delineated at para 16 to 22 of the assessment order, making a reference to the decisions by the higher courts of law, including the apex court. The ld. CIT(A) did not render any decision in the matter in view of the fact that the matter was already before the AO in respect of the immediately two preceding years (A.Y.2003-04 and 2004-05) for being decided in terms of the directions by the ITAT vide its order dated 20-08-2007 (Annexure B). It was, accordingly, held that the matter be likewise restored back to the file of the AO for the current years as well. Further, the ld.AR during hearing sought to press into service the decision in the case of CIT vs. Ranbaxy Laboratories Ltd. 334 ITR 341(Del.). The matter having been already examined by the tribunal, and restored back to the file of the AO, with directions, we only consider it fit and proper that the matter be likewise restored back to the file of the AO, who shall decide the same afresh in accordance with law, relying on the decisions by the higher courts as well as by the tribunal that may come to, or are brought, to his notice, of course, after affording due opportunity of representation to the assessee in this regard. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, we may advert to para 10 11 of the tribunal s order in the case of South Indian Bank Ltd. vs. ACIT (supra) for A.Y.1998-99 (supra) dated 13-02-2002 (Ann. C to PB). We accordingly have no hesitation in confirming the said deletion by the ld. CIT(A). We decide accordingly. 8. The second issue in the Revenue appeal relates to the disallowance of the assessee s claim in respect of write off of bad debts relating to its non-rural branches, in the sum of Rs.1,57,56,437/-. The ld. CIT(A) deleted the disallowance following the decision by the hon ble jurisdictional high court in the case of South Indian Bank Ltd. v. CIT (reported in 262 ITR 579 (Ker)). Though the same has since been overruled by the Full Bench decision by the hon ble jurisdictional high court in the case of the same assessee [in CIT vs. South Indian Bank Ltd. (2010) 326 ITR 124 (Ker.) (FB)], so that the issue stands decided in favour of the Revenue, and apparently covered against the assessee, we shall in view of the assessee s specific case as raised before us, are obliged to advert to the facts of the case. 9. The basis of the AO s denial of deduction to the assessee was that in his view allowing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te off for the current year, is to be seen only with reference to the provision as made for the current year only. The language of the provision to s. 36(1)(vii) being clear, in fact, there is no other construction that emanates out of a harmonious and co-joint reading of the three provisions. Therefore, it is not only the write off for the current year ( ₹ 157.56 lakhs) by which the provision account has to be reduced, but also as that claimed for the earlier years as well, i.e., while reckoning any deduction u/s. 36(1)(vii) of the Act. The Revenue, thus, succeeds on this count. We decide accordingly. 10. The third issue arising in the Revenue s appeal is in respect of loss on amortization of the premium paid on the purchase of government securities, disallowed in the sum of Rs.403.29 lakhs. The ld. CIT(A) deleted the same on the basis of the decision by the tribunal in the assessee s own case for A.Y. 2003-04 (in I.T.A. No. 394/Coch/2006 dated 27-09-2007). The ld. CIT(A) has also given a clear finding that no depreciation in respect of these securities is being claimed by the assessee. 11. The assessee before us has placed on record the decision relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appeal is in respect of the disallowance of pension payment to the retired employees in the sum of Rs.2,09,17,554/- (refer para 13 of the assessment order). The facts and circumstances of the case, as well as the respective cases of both the parties, is the same as for A.Y. 2005-06, adjudicated by vide para 4 of this order (in ITA No. 93/Coch/2009). As such, our decision for the said year would be equally valid and apply with equal force for this year as well. We decide accordingly. 16. The third issue and the final issue in the assessee s appeal against the impugned order is in respect of levy of interest u/s. 234B of the Act in the sum of Rs.1,11,27,840/-. The basis of the assessee s objection, which found acceptance by the ld. CIT(A), is that the liability to interest arose only consequent to the regular assessment, and which it is claimed could not be anticipated earlier; it filing a return of income for the year. 17. We are unable to find any merit in the assessee s case, particularly in view of the settled position that interest u/s. 234B is compensatory and, thus, mandatory, even as clarified by the apex court time and again (refer CIT vs. Anjum S. Ghaswala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06 (vide para 9 of this order), and which would equally apply for the current year as well; the facts and circumstances as well as the respective cases of both the parties being the same. We decide accordingly. 21. The third issue arising in the present appeal, is in relation to loss on amortization premium on the purchase of government securities, disallowed in the sum of Rs.7,37,21,374/-. This has been the subject matter of our adjudication which we have already considered while deciding the Revenue s appeal for A.Y. 2005-06 (vide para 10 of this order), and which would equally apply for the current year as well; the facts and circumstances as well as the respective cases of both the parties being the same. We decide accordingly. 22. The fourth issue by the Revenue is in respect of the provision for leave encashment liability, disallowed in the sum of Rs.1,27,74,500/- by the AO in view of the non obstante clause of s. 43B(f) of the Act. During the hearing, it was conceded by the ld. AR that the matter stands decided by the tribunal in the case of South Indian Bank Ltd. (in I.T.A. No. 935/Coch/2008 dated 31-05-2011 for A.Y. 2005-06). The copy of the said orde ..... 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