M/s District Co- M/s District Coperative operative Bank Limited,Bijnor. Vs.. Assistant Commissioner of Income Tax, Income Tax, Najibabad.
July, 08th 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
`B' : NEW DELHI
DELHI BENCH `B
BEFORE SHRI H.L. KARWA, HON'BLE PRESIDENT AND
SHRI B.C. MEENA, HON'BLE ACCOUNTANT MEMBER
Assessment Year : 2008-
M/s District Co- Vs. Assistant Commissioner of
Bank Limited, Income Tax,
Civil Lines Najibabad.
PAN : AABFD2205R.
Appellant by : Shri P.S. Kashyap, CA.
Respondent by : Smt. Parvinder Kaur, Sr.DR.
PER B.C. MEENA, AM :
This appeal filed by the assessee emanates from the order of
learned CIT(A), Bareilly dated 1st March, 2013.
2. The assessee is a cooperative society providing banking services
in the rural district of Bijnor, Uttar Pradesh. The assessee has made a
contribution of `1 lakh for fire safety system to be installed at
auditorium/conference room of Public Sector Undertakings Bhawan
(PSU Bhawan), Lucknow. The Assessing Officer treated the
expenditure to be capital in nature by holding that it has given
enduring benefit to the assessee. The CIT(A) has also confirmed the
addition. Now, the assessee is in appeal before us by taking the
"1. That on facts and in law addition of Rs.1,00,000/- on
account of treating subscription paid towards fire system
as capital expenditure is totally wrong, unjustified & illegal.
Assessee has paid a sum of Rs.1,00,000/- as its share
towards fire system to be installed in PSU
Auditorium/conference room Lucknow. The said expenses
took place as there was business necessity. Therefore, the
basis taken by ld.CIT for confirming addition of
Rs.1,00,000/- is totally wrong, unjustified and unwarranted.
2. That the assessee craves leave to add, amend, alter
or withdraw any of the ground of appeal on or before the
date of hearing."
3. We have heard both the sides on the issue. The apex body of
the assessee is District Cooperative Bank. The office of Nibandhak
Sahakari Bank Ltd. directed assessee to make contribution towards
Sahkarita Bhawan Conference Room. Various seminars/meetings are
organized in this hall where assessee bank was also participating. The
contribution was towards the fire fighting, alarm system and
electrification of the conference/seminar room at Sahakarita Bhawan
located at Lucknow. The assessee was not the owner of these
premises. The request was made for `6 lakhs. However, the assessee
has made a contribution of `1 lakh only. Since assessee did not own
the premises, it cannot be said that an asset of enduring benefit has
come into existence and the assessee will enjoy the fruits of the
expenditure in the long run. The assessee is having business
connections with UP Cooperative Union to whom this contribution has
been made. Therefore, in our considered view, this expenditure is an
allowable revenue expenditure as per the provisions of Section 37(1) of
the Income-tax Act, 1961. The facts of the case suggest that this
expenditure was for the purpose of business. Therefore, we set aside
the order of authorities below and allow the assessee's appeal on this
4. In the result, the appeal of the assessee is allowed.
Decision pronounced in the open Court on 3rd July, 2014.
(H.L. KARWA) MEENA)
PRESIDENT ACCOUNTANT MEMBER
Dated : 03.07.2014
Copy forwarded to: -
1. Appellant Co-operative Bank Limited,
: M/s District Co-
2. Respondent : Assistant Commissioner of Income Tax,
5. DR, ITAT