TMI Blog2020 (9) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... provision made on account of penal interest charged by RBI. No infirmity in the impugned order of Ld. CIT(A) allowing the claim of assessee for deduction on account of penal interest paid to RBI for non-maintenance of SLR and CRR including especially the provision made - Decided against revenue. - ITA No. 2987/PUN/2016 - - - Dated:- 9-9-2020 - SHRI P. M. JAGTAP , VICE PRESIDENT ( K / Z ) AND SHRI PARTHA SARATHI CHAUDHURY , JUDICIAL MEMBER Assessee by : Smt. Deepa Khare Revenue by : Smt. Kesang Y. Sherpa ORDER PER P. M. JAGTAP , VP This appeal is preferred by the Revenue against the order of Ld.CIT(A)-2, Aurangabad, dated 25.10.2016, whereby he allowed the claim of the assessee for deduction on account of penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of the assessee for deduction on account of penal interest charged by RBI for non-maintenance of SLR and CRR vide an order dated 22.03.2015 passed u/s 143(3) of the Act. 3. Against the order passed by the Assessing Officer u/s 143(3) of the Act, an appeal was preferred by the assessee before Ld. CIT(A), who entertained the claim of the assessee inter-alia, for deduction on account of penal interest charged by RBI for non-maintenance of SLR and CRR and also allowed the same on merit for the following reasons given in paragraph Nos.9 and 10 of his impugned order. 9. Sub-ground of Ground No.4 states that deduction of penal interest for non-maintenance of a SLR and CRR paid to the RBI should be allowed as a deduction. The claim for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n identical issue has been decided by the Hon ble Jurisdictional High Court in case of Bank of Baroda vide order dated 15.02.2011 in Income Tax appeal No.4169 of 2009. On the other hand the ld. DR has relied upon the orders of authorities below. 7.2 Having considered the rival submissions and careful perusal of record we note that this issue is covered by the decision of Hon'ble Jurisdictional High Court in the case of CIT vs. Bank of Baroda (supra), wherein the Hon'ble High Court has held as under :- The only question raised by the revenue in this appeal is whether the interest paid by the assessee for non-maintenance of the cash reserve ratio / statutory liquidity ratio as per Section 24 of the Banking Regulation Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee in respect of the amounts paid for shortfall in maintenance of CRR and SLR to the RBI is a legitimate business expenditure. This sub- ground of ground No.4 is allowed. 4. Aggrieved with the order of Ld. CIT(A), the Revenue has preferred this appeal before the Tribunal on the following ground: 1. On the facts and circumstances of the case, the Learned CIT(A)-2, Aurangabad erred in deleting entire addition of ₹ 7,03,26,586/- on account of penal interest paid to RBI whereas the assessee had actually incurred expenditure of ₹ 89,37,585/- only and for remaining amount of ₹ 6,13,89,000/- only provision has been created. 5. We have heard the arguments of both sides and perused the material available on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the assessee has submitted that the entire liability on account of penal interest charged by RBI for non-maintenance of SLR and CRR was accepted by the assessee bank and the same having been arisen and crystallized during the year under consideration, the Ld. CIT(A) was fully justified in allowing the claim of the assessee for deduction even on account of provision made on account of penal interest charged by RBI. Keeping in view this categorical assertion made by the Ld. Counsel for the assessee, which has remained undisputed or uncontroverted by the Ld. DR, we find no infirmity in the impugned order of Ld. CIT(A) allowing the claim of assessee for deduction on account of penal interest paid to RBI for non-maintenance of SLR an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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