Bombay High Court
The Pr. Commissioner Of Income Tax-4 vs Pune District Central Co-Op Bank Ltd on 3 December, 2018
Author: M.S.Sanklecha
Bench: Akil Kureshi, M.S.Sanklecha
S.R.JOSHI itxa-573-2016.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO. 573 OF 2016
The Pr. Commissioner of Income Tax-4, Pune .. Appellant.
v/s.
Pune District Central Co-op Bank Ltd., .. Respondent.
Mr. Tejveer Singh, for the Appellant.
CORAM: AKIL KURESHI &
M.S.SANKLECHA, JJ.
DATE : 3rd DECEMBER, 2018.
P.C:-
This Appeal under Section 260-A of the Income Tax Act, 1961 (the Act), challenges the order dated 28th November, 2015 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order dated 28th November, 2014 is in respect of Assessment Year 2009-10.
2 The Revenue urges the following questions of law for our consideration:
"(a) Whether on the facts and in the circumstance of the case and in law, the Tribunal was justified in allowing the assessee's claim by holding that the disallowance of Rs.1,94,73,302/-
made by the Assessing Officer claimed as amortization of premium expenditure for HTM securities by payment of premium over and above the face value of such securities?
(b) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the addition of Rs.1,31,60,000/-made by the Assessing Officer on 1 of 4 ::: Uploaded on - 07/12/2018 ::: Downloaded on - 28/12/2018 23:02:55 ::: S.R.JOSHI itxa-573-2016.odt account of contribution to Rajya Swarga Sewa Nidhi without appreciating the fact that it being a contingent liability, deduction towards the same is inadmissible?"
3 Re Question (a):-
(i) We find that the impugned order of the Tribunal allowed the Respondent's appeal by following the decision of this Court in CIT v/s. HDFC Bank Ltd., 366 ITR 505. The Revenue is not able to point out any error in its doing so. On the contrary, Mr. Tejveer Singh, learned Counsel for the Revenue very fairly states that this issue also stands concluded against the Revenue by the decision of this Court in an identical issue in the case of CIT v/s. Thane Bharat Sahakari Bank Ltd., (Income Tax Appeal No. 1117 of 2013) decided on 17th March, 2015.
(ii) In the above view, the question (a) as proposed, does not give rise to any substantial question of law. Thus, not entertained.
4 Re Question (b):-
(i) The Respondent had in its return, claimed deduction on account of contribution of Rs.1,31,60,000/- made to Rajya Swarga Sewa Nidhi.
The basis of the above claim was a provision made with regard to the payment to be made to the State Cadre Employment Fund, as per the decision of the State Government, Rule 53A of the Maharashtra Co-operative Societies Rule, 1961 and the Circular issued by the State. The payment was, in fact, made in the very next year. Nevertheless, the Assessing Officer disallowed the provision made to the extent of Rs.1,31,60,000/- for contribution to be made to Rajya Swarga Sewa Nidhi. This on the ground that it was a contingent liability.
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S.R.JOSHI itxa-573-2016.odt
(ii) Being aggrieved, the Assessee filed an Appeal to the Commissioner
of Income Tax (Appeals)[CIT(A)]. By order dated 30th August, 2013, the CIT(A), found that the contribution was made to the Rajya Swarga Sewa Nidhi in terms of the statutory requirements and orders of the State Government. Besides, it held that provision made in the subject Assessment Year was, in fact, paid during the subsequent year. Thus, it was held to be not in the nature of contingent liability, while allowing the appeal.
(iii) The further appeal by the Revenue, was dismissed by the impugned order of the Tribunal. It found that the Rajya Swarga Sewa Nidhi was established under the provisions of the Maharashtra State Co- operative Societies Act and the Rules. The Rajya Swarga Sewa Nidhi was used to benefit, inter alia the Respondent-Bank. In terms of Co-operative Act, the Rule and Circular dated 13 th October, 1989 by the State Government. Therefore, a provision was made in respect of the Annual contribution made to Rajya Swarga Sewa Nidhi Ltd., In fact, in terms of Section 65A(5) of the Co- operative Act, the Registrar is empowered to issue demand notice in case the Respondent fails to make its contribution. On the above facts, the Tribunal found that the provision made was not a contingent liability but in the nature of statutory liability. Thus, dismissed the Revenue's appeal.
(iv) We find that both the CIT(A) and the Tribunal have come to a finding of fact that the provision made is not a contingent liability but a requirement of law i.e. in the nature of statutory requirement. Then in the absence of the above finding being shown 3 of 4 ::: Uploaded on - 07/12/2018 ::: Downloaded on - 28/12/2018 23:02:55 ::: S.R.JOSHI itxa-573-2016.odt to be perverse, no interference is warranted. Further, evidence of the fact that the liability was not contingent, is that the amount is paid in next Assessment Year to the Rajya Swarga Sewa Nidhi.
(v) In view of the above, the question (b) as framed also does not give rise to any substantial question of law. Thus, not entertained.
5 Accordingly, Appeal dismissed. No order as to costs.
(M.S.SANKLECHA,J.) (AKIL KURESHI,J.)
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