TMI Blog2010 (12) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld. CIT(A) has erred in deleting the addition of ₹ 1,23,38,110/- made on account of disallowance u/s 14A of the Income Tax Act. 3. The Ld. DR had moved an application for adjournment as the CIT DR was on leave today. The said adjournment application has been rejected in view of the adjournment being sought by the Revenue time and again. The Ld. AR for the assessee at the outset pointed out that the issues raised in the grounds are covered by the earlier order of the Tribunal in assessee s own case in ITA No. 435/Chandi/2009 relating to assessment year 2006-07. 4. We have heard the rival contentions and perused the records. We find that the issue raised in ground No.1 regarding allowance of deduction u/s 80P(2)(a)(i) of the Act of interest income earned on surplus funds in accounts amounting to ₹ 1,22,73,385/- is covered by the order of the Tribunal in ITA No. 435/Chandi/2009 relating to assessment year 2006-07 dated 24.9.2009 in assessee s own case. The Tribunal has adjudicated the issue vide paras 7 8 of its order and the Tribunal upholding the order of CIT(A) dismissed the ground of appeal raised by the Revenue by observing as under:- 7. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks. The income from such deposits, in our considered opinion, can be said to be attributable to the business of providing credit facilities, so as to fall within Section 80P(2)(a)(i) of the Act. In our view, CIT(Appeals) made no mistake on this score also. Hence, on this Ground, the Revenue has to fail. 8. Respectfully concurring with the aforesaid precedent, decision of the CIT(Appeals) is upheld and Revenue fails on this aspect also. 5. The issue raised in the present ground is idential to the issue raised before Tribunal in earlier year. Accordingly, following the earlier order of the Tribunal (supra) in assessee s own case, we dismiss the ground of appeal No. 1 raised by the Revenue. 6. The issue raised by the Revenue in ground No. 2 is with regard to the action of the CIT(A) in holding disallowance of provisions of NPA is eligible for deduction u/s 80(P)(2) (a)(i) of the Act. . We find that this issue has also been deliberated upon by the Tribunal vide paras 5 6 of its order dated 24.9.2009 and the Tribunal in turn following the precedent and relying on its earlier order dated 25.3.2009 in ITA No. 120/Chandi/2007 and others for assessment year 1998-99 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same claim was held as eligible for benefit u/s 80P(2)(a)(i) of the Act for the reason that even the defaulted interest, was also earned from the business of providing credit facilities to its members. Therefore, on this aspect, we find no justifiable grievance for the Revenue and the Revenue fail on this aspect. 6. In view of the aforesaid discussion, as the facts and circumstances are identical in the year under consideration, following the precedent, the order of the CIT(Appeals) on this aspect is also hereby affirmed. As a result, on this Ground also, the Revenue fails. 7. Following the aforesaid precedent, we are in conformity with the order of CIT(A). The ground of appeal No. 2 raised by the Revenue is dismissed. 8. The grievance of the Revenue vide ground No.3 is in respect of allowance of claim of ₹ 1,83,87,962/- being interest on GPF by accepting the additional evidence without affording opportunity as required under Rule 46A(3). We find that the issue is covered by the order (supra) of the Tribunal vide paras 17 18 of its order dated 24.9.2009. 9. In similar issue raised before the Tribunal in assessee s own case in ITA No. 435/Chand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income tax, Patiala. Therefore, the assessee is liable for deductions. Since the assessee is not utilizing employees fund/pension/gratuity funds, the additions cannot be made u/s 43B read with section 2(24)(x). Therefore, Ground No. 3,4 5 of the assessee are allowed. 22. The CIT(Appeals) has also reproduced the submissions taken by the assessee before him. It is evident there from that the assessee submitted copies of the orders of the Regional Provident Fund Commissioner and the orders passed by the Commissioner of Income-tax Patiala giving approval to the Pension Scheme and to the Employees GPF. It was further submitted that the Trust has been created for the two funds, wherein the entire amount and any income created thereon was deposited and the assessee does not use any part of the funds. Separate GPF Account and Balance sheet of the Trust are prepared, which were filed before the CIT(Appeals). Under such background, the CIT(Appeals) deleted the addition in the assessment year 2002-03. The same has been followed by the CIT(Appeals) in this year. 23. We have examined the reasoning made out by the CIT(Appeals) in the assessment year 2002-03, since in this ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 2007-08 and I find from the letter of approval of GPF and Pesnion Fund by CIT (Patiala) as well as the trust deed balance sheet that separate accounts have been maintained and the assessee was not utilizing these funds for its own benefit. As such, this ground of appeal is also allowed. 12. The Revenue is aggrieved by the above said findings of CIT(A) in view of the additional evidence not being confronted to the Assessing Officer. We find merit in the plea of the Revenue and are of the view that the said evidence has not been confronted to the Assessing Officer. The CIT(A) before admitting any fresh evidence is bound to confront the same to Assessing Officer in view of provisions of Rule 46A of I.T. Rules. In the interest of justice and in view of the earlier order of the Tribunal, we remit this issue back to the file of Assessing Officer to decide the same in line with directions of Tribunal in Para 23 of order dated 24.9.2009. A reasonable opportunity of hearing shall be provided to the assessee. The Ground No.3 raised by the assessee is allowed for statistical purposes. 13. The issue raised in ground No.4 is against deletion of addition made on a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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