TMI Blog2023 (3) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... terest paid to unregistered firm. As per the bylaws of the assessee, unregistered firm and minor are not eligible to be members. As per proviso to section 194A exemption is granted only to the members in case of co-operative societies. In the case of the assessee, it is an admitted fact that minors and unregistered firms cannot become members of the society. Thus, assessee had paid interest to minor and unregistered firms who were not members of the assessee. This is violation of section 194A - we are of the opinion that the AO has rightly invoked provisions of section 40(a)(ia) of the Act and disallowed interest paid to minor and unregistered firm hence, the said addition is confirmed. Decided against assessee. - ITA No.180/PUN/2020 - - - Dated:- 17-3-2023 - Shri S.S.Godara, Judicial Member And Dr. Dipak P. Ripote, Accountant Member For the Assessee : Shri Kishor Phadke AR For the Revenue : Shri M.G.Jasnani DR ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income Tax(Appeals)-7, Pune dated 15.12.2017 emanating from assessment order dated 19.12.2016 under section 143(3) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt expenditure being for non-business purpose: Rs. 91.200/- 4.1 P L a/c of the assessee, was debited on a/c of expenditure under the head Advertisement expenses at Rs.91,200/-. On verification of such expenses and advertisement given in the print media vis-a-vis business exigencies of such advertisement expenses, it is seen that the same is not for the purpose of business and thus, are not deductible u/s 37(1) of the Act. The details are given as under: Date Particulars Amount 01 16.09.2013 Death condolence of Mr. Kalyanrao Gujar 79,200/- 02 04.03.2014 Death condolence of Mr. Rambhau Tupe/Shreerang Kadam 12,000/- Total 91,200/- 4.2 On discussion with the AR of the assessee, he agreed that the business expediency of such expenditure to the above extent cannot be substantiated and as such, an amount of Rs 91,200/- is being disallowed u/s 37(1) of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gratulating Mr. Ajit Pawar. The appellant has not demonstrated that how this advertisement on print media is for attracting more customers specially when these persons are not related to the banks. Further, during the assessment proceedings the appellant could not prove business expediency of such expenditure. The contention of the appellant that expenditure is every nominal does not lead to conclusion that expenditure is allowable. Moreover, the appellant has admitted during the assessment proceedings that business expediency of such expenditure cannot be substantiated. In other words, the appellant has agreed for additions of Rs.1,27,500/-. Now at the appellate proceedings the appellant is contending the addition though agreed during the assessment proceedings. 13. Thus, the expenditure incurred on the birthday / victory day celebration qua the erection of Flexies of the politicians, is not an allowable expenditure u/s 37 of the Act. In our considered opinion, the orders of the Assessing Officer / CIT(A) are fair and reasonable. They do not call for any interference. Accordingly, ground 3 of the assessee is dismissed. 8. During the hearing before us, the ld.AR could no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o assessment year 2010-11, wherein the order is dated 29.05.2015 but decision of the Hon ble High Court of Kerala on the issue is dated 03.04.2014 was neither relied upon nor brought to the knowledge of Tribunal and the issue was decided against assessee. The issue raised in the present appeal stands fully covered by the decision of the Hon ble High Court of Kerala (supra) though not the jurisdictional High Court, but the only decision available on the said issue squarely binds the Tribunal and hence, applying the said ratio, we hold that the assessee is entitled to the claim of deduction under section 36(1)(viia) of the Act to the extent of 7.5% of total income. The assessee co-operative bank do not have any rural branches, hence is not entitled to the second part claim of 10% of advances made by rural branches. The deduction is allowable with a rider to satisfy the provisions of said section i.e. making a provision to that extent in the books of account. The first issue which is raised in the case of different cooperative banks stands decided in favour of assessee. 9. From the above it is clear that the assessee without rural branches / advances, is entitled to deduction u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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