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2016 (1) TMI 135

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..... ence of remittance of TDS on the subject mentioned expenditure to the satisfaction of the Learned AO - Decided in favour of assessee by way of remand disallowance u/s 14A - whether could be added to the book profits u/s 115JB ? - Held that:- The provisions of section 115JB of the Act per se would not be applicable to the assessee bank for the Asst Year 2009-10 and hence there is no question of making any addition to the book profits u/s 115JB towards disallowance u/s 14A of the Act.- Decided in favour of assessee. Adoption of municipal value of property for the purpose of assessing rental income from property - Held that:- In the instant case, the Learned CIT(A) had adopted the municipal value of ₹ 20,44,361/- as the gross annual value and proceeded to compute the taxable income from house property on that basis. Against this , the assessee is not in appeal before us. Hence we find that the revenue should not be aggrieved at all in the instant case. In any case, the figures obtained from the website www.magicbricks.com cannot be treated as a reliable evidence. Hence we find no infirmity in the order of the Learned CIT-A.- Decided in favour of assessee. Expenditure .....

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..... rores as on 31.3.2009 which is very much available for making investment of ₹ 242.03 crores and hence it can safely be presumed that no part of borrowed funds were utilized for making investments yielding tax free income. Moreover, the Learned AO had not brought on record any nexus between borrowed funds and amount invested by assessee. There are plethora of judgements in favour of the assessee on the impugned issue. Hence the addition deleted by the Learned CIT(A) in respect of ₹ 13,10,65,100/- by invoking Rule 8D(2)(ii) of the Rules does not require any interference - Decided in favour of assessee. - ITA No. 1916/Kol/2012, ITA No. 113/Kol/2013 - - - Dated:- 30-12-2015 - Shri Mahavir Singh, Judicial Member And Shri M. Balaganesh, Accountant Member For the Appellant : Shri Soumitra Choudhury, Advocate, ld. AR For the Respondent : None appeared ORDER Shri M. Balaganesh, AM These appeals of the assessee as well as the revenue arise out of the order of the Learned CIT(A)-VI, Kolkata in Appeal No. 290/CIT(A)-VI/Cir-6/2011-12/Kol dated 26.10.2012 for the Asst Year 2009-10 passed against the order of assessment framed by the Learned AO u/s 143(3) of .....

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..... 69 / Mds / 2010 dated 3.8.2011 for Asst Year 2000-01 * Kurung Thai Bank vs JCIT reported in (2012) 49 SOT 12 (Mumbai Tribunal) * Union Bank of India vs ACIT in ITA No. 4702 to 4706 / Mum / 2010 for the Asst Years 2002-03 to 2006-07 * ICICI Lombard General Insurance Co Ltd vs ACIT reported in 2012- TIOL-690-ITAT-Mum in ITA No. 2398/ Mum / 2009 dated 10.10.2012 for the Asst Year 2003-04 * Bank of India vs Addl CIT reported in 2014 (5) TMI 929 in ITA No. 1498/Mum/ 2011 dated 9.4.2014 (Mumbai Tribunal) It was held by this tribunal that the provisions of section 115JB of the Act are not applicable in the case of the assessee bank and further held that the amendment brought in section 115JB of the Act read with Explanation 3 thereon by the Finance Act 2012 is applicable only with effect from Asst Year 2013-14 onwards in line with the Notes to Clauses of Finance Act 2012 . 3.3. Respectfully following the co-ordinate bench decision of this tribunal in the case of UCO Bank (supra), we also hold accordingly. Hence the ground no. 2 raised by the assessee in this regard is allowed. 4. The next ground to be decided in this issue is that whether in the facts an .....

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..... pletely arbitrary, unjustified and illegal. 5.1. We have heard the rival submissions and we have already held in ground no.2 hereinabove, that the provisions of section 115JB of the Act per se would not be applicable to the assessee bank for the Asst Year 2009-10 and hence there is no question of making any addition to the book profits u/s 115JB towards disallowance u/s 14A of the Act. Accordingly, the ground no. 4 raised by the assessee is allowed. 6. The other ground is with regard to charging of interest u/s 234 B and 234 D of the Act which is only consequential in nature and does not require any adjudication. 7. In the result, the appeal of the assessee in ITA No. 1916/Kol/2012 for the Asst Year 2009-10 is partly allowed. ITA No. 113 / Kol/2013 Departmental Appeal for A.Y 2009-10 8. The first issue to be decided in this appeal is with regard to adoption of municipal value of property for the purpose of assessing rental income from property. 8.1. The brief facts of this issue is that the assessee bank disclosed rental income from property let out and declared loss from house property to the extent of ₹ 54,502/- . The assessee submitted the details of .....

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..... ection 22, the annual value of any property shall be deemed to be- (a) the sum for which the property might reasonably be expected to let from year to year; or (b) where the property or any part of the property is let and the actual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable; or (c) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or receivable : The computation of annual value in accordance with the provisions of section 23 of the Act could be better understood in the following manner:- A = Actual rent received ₹ 15,062/- B = Fair Rent - ₹ 2,61,58,020/- C = Standard Rent Not Applicable and hence Rs Nil D = Municipal value - ₹ 20,44,361/- Annual Value (Z) = Higher of B or D = 2,61,58,020/- Expected Rent (Y) = Lower of Z or C = Nil Gross Annual Value = Higher of .....

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..... expenditure and we find no change in facts and circumstances of the case for the year under appeal with regard to the impugned issue warranting the department to take a different stand. This fact has not been controverted by the revenue before us. Though the principle of res judicata does not apply to income tax proceedings, in our opinion the principle of consistency cannot be given a go bye. Reliance in this regard is placed on the decision of the Hon ble Apex Court in the case of Radhasaomi Satsang reported in 193 ITR 321(SC) . Hence we find no infirmity in the order of the Learned CIT(A). Accordingly, the ground no. 2 raised by the revenue is dismissed. 9. The next ground to be decided in this appeal is as to whether disallowance u/s 40(a)(ia) of the Act could be made for violation of provisions of section 194A of the Act in respect of interest on matured deposits to the tune of ₹ 21,66,00,000/-. 9.1. The brief facts of this issue is that the Learned AO during the course of assessment proceedings observed that the assessee had provided for interest on matured term deposits to the tune of ₹ 21,66,00,000/- without deduction of tax at source. According to the as .....

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..... CRR) and Statutory Liquid Ratio (SLR) vide reference in DBOD.No. Ret.BC.22/12.01.001/2012-13 dated 2.7.2012 1.5. Demand Liabilities Demand liabilities of a bank are liabilities which are payable on demand. These include current deposits, demand liabilities portion of savings bank deposits, margins held against letters of credit / guarantees, balances in overdue fixed deposits, cash certificates and cumulative / recurring deposits, outstanding Telegraphic Transfers (TTs), Mail Transfers (MTs), Demand Drafts (DDs), unclaimed deposits, credit balances in the Cash Credit account and deposits held as security for advances which are payable on demand. Money at call and Short Notice from outside the Banking System should be shown against liability to others. 9.3.2. From the above meaning as clarified in RBI guidelines, it could be safely inferred that the once a term deposit gets matured, if the customer does not approach the bank for either withdrawing or renewing the matured term deposit, the bank cannot suffer interest applicable to the term deposits for the faults committed by the customer / depositor. Instead the banks are instructed by RBI to pay interest at the rat .....

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