TMI Blog2017 (5) TMI 1695X X X X Extracts X X X X X X X X Extracts X X X X ..... AN HIGH COURT] and had held that broken period interest is allowable as deduction. Following the same parity of reasoning, we hold that the assessee is entitled to the claim of broken period interest of ₹ 16,97,027/-. The ground of appeal No.1 raised by the assessee is thus, allowed. Disallowance of payment made on account of voluntary retirement of the employees - HELD THAT:- The issue arising before us is identical to the issue before the Tribunal in The Satara District Central Co.Op Bank Ltd. Vs. DCIT [2014 (12) TMI 1217 - ITAT PUNE] and following the same parity of reasoning, we hold that the ex-gratia payment made to the retiring employees in recognition of their services was profits in lieu of salary and is duly allowabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant by : Shri M.K. Kulkarni Respondent by : None ORDER Sushma Chowla, This appeal filed by the assessee is against the order of CIT(A)-4, Pune, dated 05.02.2015 relating to assessment year 2011-12 against order passed under section 143(3) of the Income-tax Act, 1961 (in short the Act ). 2. The assessee has raised the following grounds of appeal:- 1) On the facts, and circumstances of the case and in law the Ld.CIT(A)-4, Pune was not justified in confirming the addition of ₹ 16,97,027/- claimed as broken period interest made by the A.O. The issue is covered in favour of the assessee bank by the judgment of Hon'ble Jurisdictional Bombay High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 18.05.2016 in respect of first issue raised in the present appeal. In respect of other issues, reliance was placed on the ratio laid down by the Pune Bench of Tribunal in The Satara District Central Co.Op Bank Ltd. Vs. DCIT in ITA No.2537/PN/2012 and ACIT Vs. The Satara District Central Co.Op. Bank Ltd. in ITA No.2522/PN/2012, relating to assessment year 2009-10, order dated 30.12.2014. 4. Briefly, in the facts of the case, the assessee had filed the return of income declaring total income of ₹ 2,31,61,482/-. The case of the assessee was taken up for scrutiny. The Assessing Officer during the course of assessment proceedings noted that the assessee had claimed deduction of ₹ 16,97,027/- towards broken period i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poration Vs. CIT reported in 258 ITR 601 (Bom), which in turn, had distinguished the ratio laid down by the Hon'ble Supreme Court in Vijaya Bank Vs. CIT (supra) and the Hon ble High Court of Rajasthan in CIT Vs. Bank of Rajasthan Ltd. (supra) and had held that broken period interest is allowable as deduction. Following the same parity of reasoning, we hold that the assessee is entitled to the claim of broken period interest of ₹ 16,97,027/-. The ground of appeal No.1 raised by the assessee is thus, allowed. 9. The issue in ground of appeal No.2 is against the addition of ₹ 26,05,728/- by disallowing the payment made on account of voluntary retirement of the employees. 10. Brief facts relating to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service to the assessee bank. The said payments were not under any scheme of voluntary retirement formulated its assessee but were purely ex-gratia payments made in recognition of meritorious service given by the retiring employees. The assessee claimed the said expenditure to be allowable under section 37(1). The Assessing Officer on verification of the details noted that the amount was paid to 9 employees of the bank who retired from the service due to illness and consequently, the same was disallowed by the Assessing Officer. The CIT(A) on the other hand treated the said expenditure to be capital in nature as the services of the said employees resulted in long term benefit to the assessee and hence was not allowable as revenue expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal No.2 raised by the assessee is thus, allowed. 15. The ground of appeal No.3 raised by the assessee is against the addition of ₹ 3,40,185/-. The assessee had received refund of municipal tax receipts which was paid in the earlier years and the said refund was treated as capital receipt by the assessee. However, the Assessing Officer treated the same to be revenue in nature and made an addition in this regard. 16. The CIT(A) has upheld the said addition in the hands of assessee. 17. On perusal of record, it transpires that the assessee had claimed the deduction on account of municipal taxes on actual payment basis, in the earlier years, since the assessee was following mercantile system of account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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