M/S HARYANA STATE CO-OPERATIVE APEX BANK LTD.,CHANDIGARH vs. DCIT, PANCHKULA

per RBI guidelines in earlier years is more than the provision of

expenditure for which the assessee is entitled to make in the relevant

assessment year under consideration, then the assessee cannot claim

the benefit of perpetuity of the excess provision made. That at the

end of the year is required to be squared off and, hence, the excess

provisioning made by the assessee is required to be added to the

income of the assessee. However, the contention of the assessee that

while considering the provisions allowable to the assessee on the

allowable standard assets, the lower authorities have not considered

the figures of lost assets, we are of the view, that this requires to be

ITA Nos.1157 & 1158/Chd/2014 & 154 to 156/Chd/2016/Chd/2016- Haryana State Coop Apex Bank Ltd., Chandigarh 20 examined at the end of the Assessing officer. We, therefore, direct

the Assessing officer to consider the expenditure / provision for

expenditure / loss on the standard assets / sub-standard assets and

loss assets and then to decide, if any, disallowance is attracted for

excess provisioning in accordance with law. This ground of appeal is

treated as partly allowed.

adjudication.

In the result, the appeal of the assessee is treated as partly

allowed.

ITA No. 1158/Chd/2014 – (assessment year 2011-12)

to that have been taken by the assessee for assessment year 2010-11

in ITA No. 1157/Chd/2014.

ground No.1 of the appeal is dismissed and ground No.2 is restored

to the file of the Assessing officer with identical directions.

This appeal of the assessee is also treated as partly allowed.

ITA No. 154/Chd/2016 (assessment year : 2008-09)

has moved an application dated 29.2.2016 for condonation of

delay, wherein, detailed reasons have been furnished.

ITA Nos.1157 & 1158/Chd/2014 & 154 to 156/Chd/2016/Chd/2016- Haryana State Coop Apex Bank Ltd., Chandigarh 21 21. In view of the reasons given in the application and also

considering the shortness of the period of delay, the delay of 21

days in filing the appeal is hereby condoned.

specific adjudication, hence, dismissed.

Ld. CIT(A) in upholding the disallowance of interest expenditure

on the Agricultural Credit Stabilization Fund, which is identical

to that of ground No.1 of the appeal for assessment year 2010-11

(ITA No. 1157/Chd/2014).

In view of our findings given above, this ground is

dismissed.

In the result, the appeal of the assessee is dismissed.

ITA No. 155/Chd/2016 (assessment year : 2009-10)

adjudication, hence, dismissed.

CIT(A) in upholding of disallowance of conveyance deed charges of

Rs. 44,71,550/- holding the same as capital in nature.

officer noted that the assessee had debited Rs. 1,55,35,789/- under

the head other expenditure which included a sum of Rs. 44,71,550/-

towards conveyance deed charges paid to Estate Officer, Panchkula

@ 8% of the cost of plot No. GH-92, Sector 20: Panchkula. The AO

ITA Nos.1157 & 1158/Chd/2014 & 154 to 156/Chd/2016/Chd/2016- Haryana State Coop Apex Bank Ltd., Chandigarh 22 asked that why the addition of Rs. 44,71,550/- on this ground should

not be made. The assessee replied that amount of Rs.44,71,550/- paid

for conveyance deed to HUDA is revenue in nature as it does not

result to any new capital asset. The AO found that the asset being

capital in nature and the said expenditure was incurred on the said

assets; therefore, the expenditure claimed was a capital

expenditure. Thus, the addition of Rs.44,71.550/- was made

to the total income.

the said plot was purchased by the assessee from HUDA which was

allotted to the assessee for constructing the flats which were later

on allotted to the employees working with the assessee. The plot was

allotted by the way of allotment letter and based on the allotment

letter, the assessee could avail loan facility from any bank /

financial institutions. In order to mortgage the land with the bank /

financial institutions to avail loan for the purpose of constructing

flats on the said plot, it was necessary to execute the conveyance

deed which in no way lead to enhancing the value of the plots or any

addition thereto. It was the need of the time to create the mortgage

on the said plot by way of execution of the conveyance deed. For

executing the conveyance deed, the assessee incurred the stamp duty

to the extent of Rs.44,71,550/- which expenditure was revenue in

nature.

However, the Ld. CIT(A) disallowed the claim of the assessee

observing as under:-

ITA Nos.1157 & 1158/Chd/2014 & 154 to 156/Chd/2016/Chd/2016- Haryana State Coop Apex Bank Ltd., Chandigarh 23

“4.2 1 have gone through the facts of the case and written submissions filed by the appellant. It is noted that the appellant claimed expenditure of Rs. 44,71,550/- on account of conveyance deed charges in respect of a plot purchase from HUDA for construction of flats. The appellant's argument is that the expenditure did not create any new capital asset. However, the expenditure relates to plot of land which is a capital asset and the conveyance deed was made in order to create mortgage on the said plot. Therefore, the charges were related to the title of the land which was a capital asset and any expenditure related to title of capital asset was also in nature of capital expenditure. Here, the reliance is placed on the decision of Hon'ble Supreme Court in the case of V Jaganmohan Rao Vs. CIT 75 ITR 373 where the Hon'ble Apex Court held that where money is paid to perfect a title or as consideration for getting rid of a defect in the title or a threat of litigation, the payment would be capital payment and no revenue payment. Therefore, the Assessing officer was justified in holding the conveyance deed charges of Rs. 44,71,550/- as capital expenditure. Thus, this ground of appeal is dismissed.”

contention of the assessee is that the conveyance deed charges were

incurred for getting loan for construction of flats on the land. That

conveyance deed charges did not in any manner lead to enhancing

the value of the plot or any addition thereto. That the said flats

were used for the employees of the assessee. No doubt, the

conveyance deed / mortgage deed of the land was made by the

assessee for taking loan for construction of flats. The said

ITA Nos.1157 & 1158/Chd/2014 & 154 to 156/Chd/2016/Chd/2016- Haryana State Coop Apex Bank Ltd., Chandigarh 24 expenditure incurred by the assessee can be safely considered

towards the construction of flats. No doubt, the said flats are

constructed for the employees of the assessee but that, in our view,

is a capital expenditure having enduring benefit. The construction

of flat over the land has added to the value and utility of the land,

hence, the expenditure incurred by the assessee on the stamp duty

for mortgage of the land cannot be said to be Revenue expenditure.

In view of this, we do not find any infirmity in the order of the

CIT(A) on this issue and the issue is decided against the assessee.

disallowance of interest credited to the expenditure on the

Agricultural Credit Stabilization Fund, which is identical to that

of ground No.1 of the appeal for assessment year 2010-11 (ITA

No. 1157/Chd/2014). In view of our findings given above, this

issue is accordingly decided against the assessee.

In the result the appeal of the assessee is dismissed.

ITA No. 156/Chd/2016 (assessment year : 2012-13)

appeal are identical to that have been taken by the assessee for

assessment year 2010-11 in ITA No. 1157/Chd/2014.

ground No.1 of the appeal is dismissed and ground No.2 is restored

to the file of the Assessing officer with identical directions.

This appeal of the assessee is also treated as partly allowed

ITA Nos.1157 & 1158/Chd/2014 & 154 to 156/Chd/2016/Chd/2016- Haryana State Coop Apex Bank Ltd., Chandigarh 25 Order pronounced in the Open Court on 05.06.2018.

Sd/- Sd/- (B.R.R.KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 05.06.2018 Rkk Copy to: • The Appellant • The Respondent • The CIT • The CIT(A) • The DR