TMI Blog2018 (11) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... liability for the period 01/01/2014 to 31/3/2014 though, the quantification and crystallization of the amount comes later on when the revision is approved by the State Government. As decided in assessee's own case [2014 (8) TMI 1127 - ITAT JAIPUR] the liabilities have been created by statutory rule which assessee is bound to follow. This provision has been created for amicability with the employees and is for the commercial benefit of the assessee bank and is to be held as wholly and exclusively for the purpose of business. In this eventuality, the payment is even otherwise allowable U/s 37 of the Act. Any perceived method of calculation by the Assessing Officer cannot be held as a tool to disallow the assessee’s claim. The revenue’s interest is safeguarded by a fact that if at all there is any mistake in the calculation, the access are short calculation will be given suitable treatment in books of account in subsequent years. This being so in our considered view, the assessee is eligible for claim of PACS Manager Fund payment as expenditure. - decided in favour of assessee Disallowance u/s 14A - Held that:- CIT(A) has noted the fact that the assessee has not received any ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Accordingly, grounds No. 1 and 3 of the appeal are dismissed being not pressed. 3. Ground No. 2 of the appeal is regarding the disallowance of provision for wages. The assessee is a cooperative bank constituted under Rajasthan Co-operative Society Act, 2001. The assessee filed its return of income on 29/11/2014 declaring total income of ₹ 3,32,25,920/-. During the scrutiny assessment, the Assessing Officer noted that the assessee has made claim of ₹ 15,00,000/- lacs as provision for agreement in arrears which is an investment and not the actual payment to its employees. The Assessing Officer was of the view that only actual amount paid towards agreement arrear is an allowable deduction and no any provision to meet such future liability, accordingly, the Assessing Officer disallowed the claim of ₹ 15,00,000/- lacs and added to the income of the assessee. 4. The assessee challenged the action of the Assessing Officer before the ld. CIT(A), however, the ld. CIT(A) confirmed the disallowance made by the Assessing Officer on similar grounds. 5. Before us, the ld AR of the assessee has submitted that the assessee is a district level cooperative bank and revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties and perused the material available on the record. We proceed to decide the grounds raised by the assessee as under:- Apropos ground No. 2 in respect of group gratuity scheme policy from time to time thereof was paid to LIC. The disallowance has been made by lower authorities holding that the necessary registration of scheme was not obtained by the assessee, in our considered view, the controversy stands squarely covered in favour of the assessee by the Hon'ble Supreme Court judgment in the case of CIT Vs. Textool Co. Ltd. 263 CTR 257 (SC) wherein the similar payment made by the assessee directly to LIC for group gratuity fund was held to be allowable deduction U/s 36(1)(v) of the Act. This decision has been followed by the Delhi Bench of ITAT in the case of Keihin Penalfa Ltd. vs. ACIT vide ITA No. 4309/Del./2011 (supra), to which one us (learned J.M.) is a party. In view thereof, we are inclined to hold that the assessee is entitled to deduction of payment of gratuity to the LIC. Accordingly, ground No. 2 of the assessee is allowed. Apropos ground No. 3, there is no dispute on the facts that the amount of payment of arrears of salary in question was made conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon ble Supreme Court judgment in the case of Shri Venkata Satyanarayana Rice Mill Contractors Co. Vs. CIT (supra). In view thereof, this ground of assessee is also allowed. This issue was again considered by the Tribunal for the A.Y. 2009-10 vide order dated 24/05/2016 in ITA No. 515/JP/2013 in para 6.3 as under: 6.3 We have heard the rival contentions of both the parties and perused the material available on the record. This issue has been considered by the Coordinate Bench in assessee s own case for A.Y. 2008-09, which is squarely applicable on the facts and circumstances of the case for the year under consideration. Therefore, by respectfully following the order of the Coordinate Bench, we allow the assessee s appeal on this ground. Thus, the Tribunal has consistently decided this issue in favour of the assessee. Accordingly following the decisions of this Tribunal, we allow the claim of the assessee and delete the addition by the Assessing Officer on this account. 8. Now we take revenue s appeal, wherein the revenue has taken following grounds of appeal: On the facts and in the circumstances of the case, the ld CIT(A) gas erred in: (i) On the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the year in which no exempt income has been earned or received by the assessee. This decision of Special Bench of the Tribunal has been impliedly overruled by the decisions of High Courts in Shivam Motors P Ltd (All HC), CIT vs. Corrtech Energy Pvt. Ltd. (Guj HC), CIT vs. Delite Enterprises (Bom HC), CIT vs. Lakhani Marketing (P H HC), CIT vs. Winsome Textiles Industries Ltd. 319 ITR 204 (P H) where it has been held that when there is no exempt income and no claim for exemption, s. 14A and Rule 8D have no application and no disallowance can be made. In the following cases, the latest judicial opinion on this issue is more than amply clarified even after considering the CBDT circular- Income Tax Appellate Tribunal - Mumbai in the case of Tata Industries Ltd, Mumbai vs The Income Tax Officer, Ward-2 (3) (3), In ITA No.4894/Mum/2008 order dated 20 July, 2016 referred to Hon'ble Delhi High Court in the case of M/s Cheminvest Ltd. vs. CIT (2015) 61 taxman.com 118, wherein also the assessee had made strategic investments in subsidiaries/Group Companies for retaining control over them but has not received any dividend income from such investments; held that section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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