TMI Blog2011 (7) TMI 1215X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance of ₹ 2.97 lakhs on account of sale of old newspapers. 4. On appeal, before the ld. CIT(A), the assessee submitted that the old newspapers were either used by the assessee itself or brought to sale at periodical intervals. The sale receipts, if any, were accounted for in the books of account. Therefore, the addition made by the Assessing Officer should be deleted. 5. The ld. CIT(A), after considering the submissions of the assessee observed that it was the duty of the assessee bank to furnish details regarding sale of old newspapers and since this was not done by the assessee, therefore, disallowance made by the Assessing Officer was fully justified. 6. At the time of hearing, both the parties before us agreed that the matter should be remanded back to the file of the Assessing Officer to verify if the sale proceeds of old newspapers was shown by the assessee in its books of account or not. We, therefore, set aside the orders of the lower authorities and restore the issue back to the file of the Assessing Officer for adjudicating the issue afresh after verification of the details and accounts of the assessee; whether the assessee has shown the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of provision for depreciation on investments written back and offered for assessment by the bank. 14. At the time of hearing, the ld. A.R. submitted that he is not pressing this ground of appeal. Therefore, this ground of appeal of the assessee is dismissed for want of prosecution. 15. Ground Nos. 1 and 2 in Assessment Years 2006-07 and 2007-08 are directed against the order of the ld. CIT(A) confirming the addition of ₹ 70,634/- in Assessment Year 2006-07 and ₹ 66,931/- in Assessment Year 2007-08 towards locker rent on accrual basis. 16. Brief facts of the case are that the assessee had shown locker rent income on receipt basis in the return of income. The Assessing Officer, while making assessment, considering the income from locker rent on accrual basis which is regularly followed method of assessee made addition of ₹ 70,634/- in Assessment Year 2006-07 ₹ 66,931 in Assessment Year 2007-08. 17. In appeal, the ld. CIT(A) confirmed the addition made by the Assessing Officer. 18. The ld. A.R. of the assessee submitted that the assessee was regularly following the method of accounting for locker rent on receipt basis and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue expenditure and should be allowed to the assessee. The ld. CIT(A) held that the amount was donation in charity and was for non business purposes. Therefore, the same cannot be allowed and confirmed the action of the Assessing Officer. 24. Before us, the ld. A.R. reiterated the submissions made before the lower authorities and also filed letter dated 15.10.2001 copy of which is placed on record from Ishwar School for Handicapped Persons wherein it was stated that the amount of ₹ 5 lakhs was paid towards Exhibiting/Advertising the bank s name in the school building yet to be construction for school. 25. The ld. D.R. supported the orders of the authorities below. 26. After considering the rival submissions, we find that in the instant case, the disallowance for deduction of ₹ 5 lakhs paid to Ishwar School for Handicapped Persons was made by the Assessing Officer as the same was not allowable u/s 80G of the Act and was confirmed by the ld. CIT(A) on the ground that donation and charity done by the assessee were not for business purposes of the assessee. The ld. A.R. of the assessee has filed a letter dated 15.10.2005 from Ishwar School for Hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Assessment Year 2002-03, Ground No. 2 in Assessment Year 2004-05, Ground No. 2 in Assessment Year 2005-06 and Ground No. 2 in Assessment Year 2006-07 are directed against the order of the ld. CIT(A) in deleting the addition of ₹ 27,19,09,845/- in Assessment Year 2007-08, ₹ 28,13,95,360/- in Assessment Year 2002-03, ₹ 4,78,50,242/- in Assessment Year 2004-05, ₹ 9,33,17,162/- in Assessment Year 2005-06 and ₹ 15,98,84,207/- in Assessment Year 2006-07 on account of broken period interest and allowing the same as Revenue expenditure. 31. Brief facts of the case are that the Assessing Officer made addition towards broken period interest stating that the issue was discussed extensively in earlier assessment orders with examples. Following the same, in the current Assessment Year also, expenses need to be capitalized and assessee s claim irrespective of the manner in which it is accounted for under commercial principles cannot be considered for I.T. purposes in view of the decision of the Hon'ble Supreme Court in the case of Tuticorn Alkaline Chemicals and Fertilizers Limited reported in 227 ITR 172. 32. On appeal, the ld. CIT(A), followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) vacated the disallowance following the decision of the Hon'ble Jurisdictional High Court in assessee s own case reported in 291 ITR 144 where it was held that claim of bad debts in relation to non rural branches of the assessee bank is allowable without first setting off against the provision already allowed u/s 36(1)(viia) when no distinction between advance relating to non rural and rural has been made in section 36(1)(viia) of the Act. 38. At the time of hearing, the ld. D.R. fairly conceded that this issue is covered in favour of the assessee by the order of this Tribunal in assessee s own case in Assessment Year 2003-04 vide consolidated order dated 30.10.2009 in ITA Nos. 1485 and 1507/Mds2007. We find that the Tribunal in that year has held as under: Similar question had come up before the Hon'ble Jurisdictional High Court in assessee s own case wherein the High Court held that the bank will be entitled to the deduction of the entire bad debt relating to advances made by the urban branches written off in the books and also the difference between the amount written off in the books relating to advances made by the rural branches during the previous year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that claim of bad debts in relation to non rural branches of the assessee bank is allowable without first setting off against the provision allowed u/s 36(1)(vii) when distinction between advance relating to non rural and rural has not been made in section 36(1)(viia) of the Act. 42. The ld. D.R. very fairly conceded that in view of the decision of the Hon'ble Jurisdictional High Court in assessee s own case in favour of the assessee, the Revenue s appeal on this ground has to be dismissed. Therefore, this ground of appeal of the Revenue is dismissed in both the years. 43. Ground No. 4 of the appeal of the Revenue in Assessment Year 2007-08, Ground No. 3 in Assessment Year 2005-06 and Ground No. 7 in Assessment Year 2006-07 are directed against the order of the ld. CIT(A) in deleting the depreciation on investments to the extent of ₹ 25,12,31,330/- in Assessment Year 2007-08, ₹ 15,32,06,000/- in Assessment Year 2005-06 and ₹ 16,29,47,730/- in Assessment Year 2006-07. 44. Brief facts are that the Assessing Officer made addition towards depreciation on investments on the ground that the assessee has admitted different methods of valuation fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years under consideration. 51. Ground No. 6 of the appeal of the Revenue in Assessment Year 2007-08, Ground No. 7 in Assessment Year 2004-05 and Ground No. 9 in Assessment Year 2006-07 are directed against the order of the ld. CIT(A) in deleting the addition on account of cessation of liability of ₹ 28,87,925/- in Assessment Year 2007-08, ₹ 15,84,884/- in Assessment Year 2004-05 and ₹ 34,96,110/- in Assessment Year 2006-07 on account of stale drafts. 52. Briefly stated, the facts of the case are that the Assessing Officer made addition towards cessation of liabilities on stale drafts stating that though in Assessment Year 2001-02 the Tribunal has held that the same is not to be assessed as income of the assessee, but as the matter has not reached finality, he added the same to the income of the assessee. 53. On appeal, the ld. CIT(A), following the decision of the Tribunal in assessee s own case for Assessment Years 2001-02 and 2002-03, allowed the claim of the assessee towards stale drafts. 54. At the time of hearing, the ld. D.R. merely relied upon the order of the Assessing Officer. He could not point out any specific error in the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 1,44,042/- was already offered by the assessee bank in computation of income u/s 43B of the Act and therefore, there was no need for making addition. 60. After going through the order of the Assessing Officer, it is observed that the Assessing Officer has made disallowance of ₹ 4,05,857/- on account of provision for books. The ld. CIT(A) has allowed deduction as payment on account of bonus. It is unfortunate that the ld. D.R. as well as the ld. A.R., at the time of hearing, could not tell us whether the disallowance was for bonus or provision for books. As facts are not clear, we are unable to adjudicate the issue. Hence we restore the matter back to the file of the Assessing Officer to adjudicate the issue afresh after bringing on record the entire facts of the issue and after allowing proper opportunity of being heard to the assessee. This ground is allowed for statistical purposes. 61. Ground No. 5 of the appeal of the Revenue in Assessment Year 2005-06 and Ground No. 6 in Assessment Year 2006-07 are directed against the order of the ld. CIT(A) in allowing the claim of depreciation of ₹ 2,79,74,150/- in Assessment Year 2005-06 and ₹ 2,00,56,900/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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