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TMI Blog2018 (5) TMI 1867X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income Tax (Appeals ) -10, Ahmedabad has erred both in law and on facts of the case in framing appellate order u/s.250 of the I.T. Act. for A.Y.2012.13 on 20-06-2016 (2) The learned CIT(A)-10 Ahmedabad has erred in confirming the following disallowance Particulars Amount Business Promotion Members' Gift Rs. 20,870 Payment towards scholarship to children of members Rs. 5,59,258 Payment to Nominee/ Legal Heirs of members Rs. 18,70,000 TOTAL Rs. 24,50,128 (3) The learned CIT(A) has erred in confirming the addition made of Rs. 9,50,000/- u/s.14Aof the I.T. Act. read with rule 8D(iii) of the IT. Rules, 1962 (4) The learned CIT (A) has erred in rejecting ground relating to initiation of penalty proceeding u/s. 271(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Co-ordinate Bench of the ITAT vide ITA No. 2614/Ahd/2011 dated 17/08/2016 in the case of the assessee for the assessment year 2008-09 has decided the identical issue in favour of the assessee. On the other hand, the Ld. DR has supported the order of the lower authorities. 6. We have heard the both sides and perused the material on record carefully. The assessing officer has disallowed the claim of the assessee in respect of expenditure debited to the P & L a/c pertaining to business promotion, members' gift, scholarship to children of members and payment to legal heirs of members. The assessing officer has disallowed the aforesaid expenses by following the decision of his predecessor on the ground that these expenses are nothing but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .5 Reliance is also placed in the case of CIT vs. Dascroi Taluka Coop Purchase & Sales Union Ltd, 126 ITR 413 of Hon'ble Gujarat High Court judgment, where it was held that the amount spent by the assessee-society on purchase of stainless steel utensils and other for the purpose of tour expenses of members was considered to be business expenditure within the meaning of Section 37 of the Act. 5.6 Considering to the above stated facts and circumstances, the volume of earning of the assessee bank are mainly made through its members. These expenses are incurred by the assessee bank to attract the members confidence and loyalty towards the bank in the prevailing competition so that the members place their deposits with the assessee bank a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it does not require any adjudication. The ground of appeal no. 2 is adjudicated along with ground of appeal of revenue. The ground no. 4 and 5 are of general nature, therefore, stand dismissed. ITA No. 2124/Ahd/2016 7. The revenue has raised following grounds of appeal:- "(1) That the ld.CIT(A) has erred in law and on facts in deleting the addition made by the AO on the issue of disallowance of amortized premium amounting to Rs. 2,10,11,715/-. (2) That the Id. CIT(A) has erred in law and on facts in restricting the addition to Rs. 9,50,000/- out of Rs. 42,65,343/- made by the AO on account of disallowance u/s 14A of the Act. On the fact and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e noticed that as per RBI guidelines dated 16th Oct, 2000, the investment portfolio of the bank is required to be classified under three categories viz. Held to Maturity (HTM), Held for Trading (HFT) and Available for Sale (ATS). Investment classified under HTM category needs to be marked to market and are carried at acquisition cost unless these are more than the face value in which case the premium should be amortized over the remaining period. Allowable of amortized expenses on premium on government securities has been provided u/s. 36(1)(ii) of the act and explained by CBDT vide instruction No. 17 of 2008 dated 26-11-2008. The Hon'ble High Court of Gujarat vide (2014) 43 taxmann.com 161 (Gujarat) in the case of CIT, Rajkot-II vs. Rajkot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccrued. However, in respect of addition of Rs. 9.5 lacs made under rule 8D(iii) he stated that assessee has not filed any submission, therefore, he has sustained the addition to the extent of Rs. 9,50,000/-in respect of administrative expenses. 13. We have heard the rival contentions and perused the material on record carefully. The second issue is pertained to the disallowance of expenses u/s. 14A r.w. Rule 8D of the act incurred towards the exempt income. The ld. CIT(A) has deleted the addition following the decision of his predecessors in the case of the asssessse as the asssessee has more interest free fund available than investment made in securities. We have also noticed that the assessee has its own funds as under:- Capital : Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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