TMI Blog2023 (2) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. Disallowance of ceremony expenses - AO had disallowed ceremonial expenditure on the ground that it is not related to the business purpose of the assessee or exclusively for commercial expediency in functioning of the assessee s business - HELD THAT:- These functions give a moral boost to the working efficiency of the employees. At the same time, they cannot be expected to contribute for these functions. The expenses for the ceremony and functions are borne by the assessee and in so much as they are intrinsically weaved within the basic functioning of the assessee's business, hence should be allowable as business expenses. CIT(A) of his order while providing relief on this issue to the assessee directed the AO to delete the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court? 2. Whether on the facts and circumstances of the case and in law, the Id. CIT(A) has erred in giving relief to the assessee on the issue of disallowance of ceremony expenses wherein assessee failed to substantiate that the expenses were incurred 'wholly and exclusively for the purpose of business? 3. For these and such other reasons as may be urged at the time of hearing, the order of the CIT(A) may be vacated and that of the Assessing Officer be resorted. 4. The appellant craves, leave to add, amend, alter or delete any of the above grounds of appeal during the course of appellate proceedings before the Hon'ble Tribunal. 2. In the first ground, the Revenue is aggrieved with the relief given to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank. Observing, that the co-operative banks from where the assessee was in receipt of interest income were not cooperative societies, the Pr. CIT was of the view that the interest income earned on such investments/deposits would not be eligible for deduction under Sec. 80P(2)(d) of the Act. 8. After necessary deliberations, we are unable to persuade ourselves to concur with the view taken by the Pr. CIT. Before proceeding any further, we may herein cull out the relevant extract of the aforesaid statutory provision, viz. Sec. 80P(2)(d), as the same would have a strong bearing on the adjudication of the issue before us. 80P(2)(d) (1). Where in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with effect from 01.04.2007, the provisions of Sec. 80P would no more be applicable in relation to any co-operative bank, other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. However, at the same time, we are unable to subscribe to his view that the aforesaid amendment would jeopardize the claim of deduction of a co-operative society under Sec. 80P(2)(d) in respect of its interest income on investments/deposits parked with a co-operative bank. In our considered view, as long as it is proved that the interest income is being derived by a co-operative society from its investments made with any other co-operative society, the claim of deduction under the aforesaid statutory provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received by assessee from Co-operative Banks which was stated to be against provision of section 80P(4) of the Act. In the judgment, the Hon ble Jurisdictional Tribunal took the view that interest received by Co-operative Society from Co-operative Bank is eligible for deduction u/s 80P(2)(d). Appellant in that case is also a sugar co-operative like that of present assessee. The above decision of Hon ble ITAT is squarely binding on me. Therefore, it is held that interest and dividend income earned by assessee from Co-operative bank is treated as eligible for deduction u/s 80P(2)(d) of the Act. 5. In the above stated order of the Tribunal (supra), the view taken was that the interest received by the co-operative society from co-operativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses. The learned CIT(A) at para 8.3 of his order while providing relief on this issue to the assessee directed the Assessing Officer to delete the addition stating that such kind of functions create harmony amongst the workers and management. These ceremonies are required to be performed on account of tradition and to certain extent as compulsion since these functions are followed in every sugar factory. The expenses have to come from the account of assessee only. It cannot be expected to be collected from the employees. These expenses take the colour and character of business expenses. We are in conformity with the finding of learned CIT(A) and the same is upheld. Ground No.2 of Revenue is dismissed. 7. Ground Nos.3 and 4 are gener ..... X X X X Extracts X X X X X X X X Extracts X X X X
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