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TMI Blog2017 (12) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 2009-10 on 23.09.2009 declaring a total income of Rs. 25,81,09,183/-. The Assessing Officer passed an order under section 143(3) on 23.11.2011 determining the total income of Rs. 29,70,86,510/- inter alia making additions on account of Bakshis & Tips, fraudulent withdrawals, provisions for gratuity, disallowance of interest paid on securities purchased as investments etc. Dismiss the appeal of the assessee. Aggrieved, the assessee is before us on the following grounds: 1. For that on the facts of the case, the order passed by the Ld. CIT(A) is completely arbitrary, unjustified and illegal. 2. For that on the facts of the case, the Ld. CIT(A) was wrong in not considering the fact that Rs. 3,24,905/- as Baksis & Tips ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unjustified and illegal. 7. For that on the facts of the case, the Ld. CIT(A) was wrong in confirming the addition of the A.O. Rs. 22,00,000/- shown as liability created in assessment year 2007-08 and it has no impact in the present year's profit & loss a/c, therefore, the order passed by the Ld. CIT(A) is completely arbitrary, unjustified and illegal. 8. For that on the facts of the case, the Ld. CIT(A) was wrong in dittoing the order of the A.O. and confirming the disallowance as provision for gratuity amounting to Rs. 3,50,000/-, although the said amount has been paid before the date of filing of return u/s 139(1), therefore, the order passed by the Ld. CIT(A) is completely arbitrary, unjustified and illegal. 9. For that on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities below as well as the case law cited, we hold as follows. 5. Ground no 1 is general in nature. 6. Ground no 2 and 3 is against the disallowance of expenditure of an amount paid as Tips & Baksis by the bank to casual workers on festive occasion. The assessee submits that these payments were made to casual workers like water boys, canteen boys, security staffs etc. during annual festivals like Durga Puja and Eid. It was submitted that the payment is in the nature of ex-gratia/bonus. The break-up of these payments, as made by different branches of the bank was given. These payments were authorised by appropriate resolutions of the Board of Director of the bank. The Assessing officer as well as the Ld. CIT (A) did not allow this expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting Standard (AS-13) by ICAI. 11. The premium amount of 42,27,000/- was amortised over the remaining period for which the security was held, as this was acquisition as 'Held to Maturity' (HTM). The Ld. A.O. disallowed this amortisation of the premium on the ground that the liability has not crystallised during the year. This was upheld by the ld. CIT(A). This also demonstrates that the Ld. CIT(A) as well as the A.O. could not understand the facts of this issue and nature of the claim of the assessee. 12. On a careful consideration of the arguments, we find that the CBDT vide its instruction no 17/2008 dated 26.11.2008 has stated as follows: "As per RBI guidelines dated 16th October 2000, the investment portfolio of the banks is requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the earlier assessment years and no provision was made in this year. Under these circumstances we failed to understand as to how an addition can be made during the year. The A.O. on the one hand observes that the said amount is debited to the profit and loss account in the impugned assessment year 2009-10 and on the other hand makes an addition of a provision made for fraudulent withdrawals in the earlier year without any change in the facts and circumstances of the case. Such addition cannot be sustained. Hence we delete the said addition and allow ground no 5, 6 and 7 of the assessee. 17. Ground no 8 is against the disallowance of Rs. 3,50,000/- on the ground that the assessee has made a provision for gratuity. The assessee submits tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that surplus fund are parked in Govt. Securities as investments. He was of the view that the interest in question should be capitalised and the purchase and sale of these securities would result in short term and long term capital gains. In other words, the pre acquisition interest as per the Ld. A.O. is cost effect position of the security and cannot be allowed as revenue expenditure. 21. The Assessing Officer took a contrary view on pre-acquisition interest received on sale of securities. He did not disturb the accounting of the assessee, wherein pre acquisition interest received on sale securities was disclosed as income being revenue in nature. 22. This action of the A.O. is contradictory and hence is not correct. If pre acquisitio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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