TMI Blog2011 (9) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... o.21/Mum/2011. 2. In ground No.1 of its appeal, the Revenue has challenged the action of the learned CIT(Appeals) in deleting the addition of ₹ 3,99,318/- made by the AO on account of excess cash received at the cash counters of the branches of the assessee. 3. The assessee in the present case is a company which is engaged in banking business and leasing activity. The return of income for the year under consideration was filed by it on 01-11-2007. During the course of assessment proceedings, it was noticed by the AO that the excess cash received at the cash counters of the branches of the assessee company was shown as liability. Relying on the stand taken in the assessments for the earlier years on a similar issue, the excess cash of ₹ 3,99,318/- so received was treated by the AO as income of the assessee and the same was added to its total income. On appeal, the learned CIT(Appeals) deleted the said addition made by the AO following the orders of his predecessor as well as the Tribunal in the earlier years giving relief to the assessee on a similar issue wherein the excess cash received by the assessee was treated as its liability. 4. At the time of hearing be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, the learned CIT(Appeals) deleted the said disallowance made by the AO following the orders of his predecessors as well as the Tribunal in assessee s own case for the earlier years giving relief to the assessee on this issue. 7. At the time of hearing before us, the learned representatives of both the sides have agreed that this issue is squarely covered in favour of the assessee by the orders of the Tribunal in assessee s own case for earlier years consistently allowing relief to the assessee on this issue. Even the Hon ble Bombay High Court has upheld the decision of the Tribunal giving relief to the assessee on this issue for assessment years 2002-03, 2003-04 and 2004-05 holding that the provision made by the assessee on account of bad and doubtful debts to the extent of 10% of the advances made to F.C.I. through its rural branches was eligible for deduction u/s 36(1)(viia). Respectfully following the said decisions of Hon ble jurisdictional High Court, we uphold the impugned order of the learned CIT(Appeals) deleting the disallowance made by the AO on this issue and dismiss ground No.2 of Revenue s appeal. 8. In ground No. 3, the Revenue has challenged the action of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id order of the Tribunal in assessee s own case for earlier years, we uphold the impugned order of the learned CIT(Appeals) giving relief to the assessee on this issue and dismiss ground No. 3 of the Revenue s appeal. 11. In ground No.4, the Revenue has challenged the action of the learned CIT(Appeals) in deleting the addition of ₹ 95,48,979/- made by the AO on account of commission, exchange and discount including locker rent. 12. Upto assessment year 2001-02, income received from commission, exchange and discount including locker rent in advance was being offered to tax by the assessee on receipt basis by following cash system of accounting. In assessment year 2002-03, the assessee changed the said method and offered to tax income from commission, exchange and discount including locker rent on accrual basis. Accordingly such income received in advance was not offered to tax in assessment year 2002-03 and the same was shown on the liability side of balance sheet. This new method adopted by the assessee was subsequently followed in the succeeding years including the year under consideration. In the assessment completed for assessment year 2002-03, the AO rejected the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... locker rent was received for a period of upto three years and other charges are received for about six to nine months. The locker rent of one year alone ought to be treated as taxable income in the accounts for the particular year rather than the entire advance locker rent of the two subsequent years. The advance locker rent of the following two years was shown as income in the respective subsequent years. The finding of fact which was arrived at by the Commissioner (Appeals) was hat the change in the method of accounting was bonafide and it has been followed regularly and consistently in the subsequent assessment years. The changed method has been held to be a better method for preparing and presenting financial statements of income of the assessee. The Tribunal has, in appeal, also arrived at a conclusion that the change in the method of accounting is not determined to the interest of the Revenue. The Tribunal affirmed the finding of fact of the Commissioner (Appeals) that the change was bonafide and consistently followed after the year in which it was changed. This is a pure finding of fact of both the Commissioner (Appeals) and by the Tribunal. In the result, on the basis of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made u/s 14A by applying Rule 8D of the Income Tax Rules, 1962. 17. After considering the rival submission and perusing the relevant material on record, it is observed that the issue involved in these grounds raised by the assessee is squarely covered by the decision of Hon ble Bombay High Court in the case of DCIT vs. Godrej and Boyce Mfg. Co. Ltd. 328 ITR 81 wherein it was held that Rule 8D is applicable only from assessment year 2008-09 and prior to assessment year 2008-09, the quantum of disallowance to be made u/s 14A has to be determined by adopting some reasonable method. Keeping in view the said decision of Hon ble jurisdictional High Court, we set aside the impugned order of the learned CIT(Appeals) on this issue and restore the matter to the file of the AO with a direction to determine the quantum of disallowance of expenses to be made u/s 14A by adopting some reasonable method. As submitted by the learned counsel for the assessee, the decision of Cochin Bench of ITAT in the case of State Bank of Travancore vs. ACIT 195 Taxman 47 also has a direct bearing on this issue. The AO is, therefore, directed to take into consideration the said decision of the Tribunal whil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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