9911796707
TMI Blog2018 (11) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... ss, further, CIT(A) erred by sustaining the same. The disallowance sustained is unjustified, illegal or excessive. 4. Under the facts and circumstances, the ld. A.O. has erred by initiating penalty proceeding under Section 271(1)(c) of the Income Tax Act, 1961. 5. That the appellant craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing." 2. At the time of hearing, the ld AR of the assessee has stated at bar that the assessee does not press grounds No. 1 and 3 of the appeal and the same may be dismissed as not pressed. The ld DR has raised no objection if grounds No. 1 and 3 of the appeal are dismissed as not pressed. 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 Rs. 3,32,25,920/-. During the scrutiny assessment, the Assessing Officer noted that the assessee has made claim of Rs. 15,00,000/- lacs as provision for agreement in arrears wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proved by the government w.e.f. 01/01/2014. Once the revision of wages has to be w.e.f. 01/01/2014 and there cannot be any gap between expiry of the last revision and the new revised wages then the said liability to pay the revised wages is an actual and ascertain 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. The Tribunal in assessee's own case for the A.Y. 2008-09 in ITA No. 1032/JP/2011 vide order dated 14/08/2014 has considered and held in para 17 as under: "17. We have heard the rival contentions of both the parties 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Our views are fortified by the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... co-operatives attached with it. The reference to the clarificatory circular is made but the A.O has not identified the nexus between interest free funds and interest bearing funds being utilized for the investments made. The Income Tax Appellate Tribunal , 'B' Bench, Chennai in the case of Assistant Commissioner of Income Tax, Company Circle-I(2), Chennai Vs Mr. M. Baskaran I.T.A. No. 1717/Mds/2013 (Assessment Year: 2009-10) held as under- No doubt in Cheminvest Ltd vs. ITO 121 ITD 318 (SB) the Special Bench of the Tribunal has held that disallowance u/s 14 A can be made even 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 opini ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
