Sree Veerapulakeshi Co-Op. Bank Ltd, ... vs Department Of Income Tax

The Assistant Commissioner Vs. Shri Veerapulakeshi Co-operative of Income Tax, Bank Ltd., Circle 1, Badami. Bijapur. Dist. Bijapur. PAN : AAAAS 1704L

APPELLANT RESPONDENT

ITA No.278/Bang/2011 Assessment year : 2007-08

Shri Veerapulakeshi Co-operative Vs. The Assistant Commissioner of Bank ltd., Income Tax, Badami. Dist. Bijapur. Circle 1, PAN : AAAAS 1704L Bijapur. APPELLANT RESPONDENT

Revenue by : Shri P.K. Srihari, Addl. CIT(DR) Assessee by : Shri S. Parthasarathi, Advocate

Date of hearing : 04.03.2015 Date of Pronouncement : 20.03.2015 ITA Nos. 34 & 278/Bang/2011 Page 2 of 19

ORDER

Per N.V. Vasudevan, Judicial Member

These are cross appeals by the revenue and assessee directed

against the order dated 12.11.2010 of the CIT(Appeals), Belgaum relating

to assessment year 2007-08.

ITA 34/11 (Revenue's appeal)

2. The assessee is a cooperative society engaged in banking business.

It is a cooperative bank. In the course of assessment proceedings for the

A.Y. 2007-08, the Assessing Officer noticed that in the computation of total

income furnished by the assessee, a sum of Rs.60,71,459 was added to

the profit as per P&L account as "interest receivable for the year 2006-07,

but not received." The assessee submitted before the AO that the

aforesaid interest income was interest on doubtful loans, but nevertheless

added in the statement of total income to the profit as per P&L account.

The AO noticed the following:-

Balance of overdue interest receivable as on 31-03-2007 8,16,28,582 Less: Balance of overdue interest receivable as on 31-03- 6,61,50,558 2006 Difference amounting to interest for the year accrued but not 1,54,78,024 credited to P&L a/c Less: Income offered out of the above by the assessee 60,71,459 Balance 94,06,565

3. According to the AO, the difference between the overdue interest as

on 31.3.2007 and 31.3.2006 was a sum of Rs.1,54,78,024 and this entire ITA Nos. 34 & 278/Bang/2011 Page 3 of 19

amount ought to have been offered to tax as income by the assessee as

the assessee was following mercantile system of accounting. The AO

therefore added the difference between the sum of Rs.1,54,78,024 and

Rs.60,71,459 (which was added in the computation of total income by the

assessee) viz., a sum of Rs.94,06,565. The AO also referred to the

decision of the Hon'ble Supreme Court in UCO Bank v. CIT, 237 ITR 889

(SC) and accepted the fact that as per the aforesaid decision, interest on

sticky loans need not be offered to tax.

4. The AO also, referred to the provisions of section 43D which was

introduced w.e.f. 1.4.1991. As per provisions of section 43D, income by

way of interest in relation to such categories of bad and doubtful debts as

are prescribed having regard to guidelines issued by RBI, can be brought

to tax only when such income is credited in the P&L account or the year in

which it is actually received by the assessee. According to the AO, the

aforesaid provisions are applicable only to public financial institutions,

scheduled bank, state financial corporation and public company, who

derive income by way of interest and where such interest pertains to bad or

doubtful debts, which are prescribed having regard to the guidelines issued

by National Housing Bank in relation to such debts. The aforesaid

provisions are not applicable to a cooperative bank such as the assessee.

The AO was therefore of the view that the sum of Rs.94,06,565 was

accrued interest and ought to have been taxed. Accordingly, he brought

the same to tax as interest income accrued, but not offered to tax.

ITA Nos. 34 & 278/Bang/2011 Page 4 of 19

5. Before the CIT(Appeals), the assessee gave a detailed branchwise

list of borrowers and interest payable by such borrowers and submitted that

only a sum of Rs.60,71,459 as per the said list was interest receivable

which had not been accounted in the books of account. The assessee

therefore submitted that the addition made by the AO was unsustainable.

6. According to the CIT(Appeals), the assessee was following

mercantile system of accounting and interest accrued had been accounted

as income by the assessee and making a further addition as done by the

AO would amount to double addition. The CIT(A) accordingly deleted the

addition made by the AO.

7. Aggrieved by the order of the CIT(A), the Revenue has filed the

present appeal before the Tribunal on the following grounds of appeal:-

"1. Learned CIT(A) failed to appreciate that the assessee is claiming the expenditure on accrual basis and the income on interest on cash basis.

2. Learned CIT(A) ignored the fact that such mixed/hybrid system of accounting is not allowed as per the provisions of sec. 145(1) of the Income Tax Act, 1961.

3. Learned CIT(A) erred in appreciating the fact that the "over due interest" is not credited to profit and loss account on accrua1 basis, as "Contra" entry on either sides to balance sheet. This type of accounting treatment is against the accounting standards fixed by the ICAI.

4. Learned CIT(A) failed to consider the jurisdictional High Court's order in the case of Karnataka State Finance Corporation Vs CIT (1988) 174 ITR 212, where it was held that the interest ITA Nos. 34 & 278/Bang/2011 Page 5 of 19

on sticky loans of doubtful recovery was includible in assessee's income following the mercantile system of accounting.

5. The learned CIT(A) has erred in deleting the disallowance of Rs.94,06,565/- on account of accrued interest which is not credited to the P and L account treating it as double taxation. The CIT(A) has not examined the correctness of this accrued interest arrived at by the assessee."

8. We have considered the rival submissions. In our view, the issue

requires a fresh consideration by the AO and therefore the order of the

CIT(Appeals) is set aside. The reasons for doing so are that the order of

the CIT(A) is not clear as to how the interest receivable which are overdue

have been accounted for by the assessee in its books of account.

Admittedly, the assets side of balance sheet as on 31.3.2006 showed a

sum of Rs.6,61,50,558 as overdue interest. The overdue interest as on

31.3.2007 was Rs.8,16,25,582. The difference between the two was a sum

of Rs.1,54,78,024. This interest ought to have been accounted by the

assessee in its books of account, as admittedly, as per mercantile system

of accounting, interest income to this extent is deemed to have accrued to

the assessee. In the computation of total income, the assessee had only

added a sum of Rs.60,71,459. The remaining interest income of

Rs.94,06,565 ought to have been accounted as interest income. The

explanation of the assessee before the AO was by placing reliance on the

decision of UCO Bank (supra). It is thus clear that the claim of the

assessee before the AO was that interest accrued not accounted for in its

books of account are in relation to sticky loans & advances. The assessee ITA Nos. 34 & 278/Bang/2011 Page 6 of 19

has not furnished any explanation as to how the loans on which interest

income was not offered to tax had become sticky? It was for this reason

that the AO had made the impugned addition. We are of the view that the

reference to the provisions of section 43D and its non-applicability to a

cooperative bank is not relevant, because section 43D of the Act only

statutorily recognizes the right of certain categories of assessees to

account for interest on sticky loans, either in the year in which they choose

to do so by credit the P&L account or the year of receipt. The said

provisions will not affect any other assessee who is otherwise able to show

that the interest income relates to loans which have become doubtful of

recovery need not be accounted for as income. We therefore set aside the

order of CIT(A) and remand the issue to the AO for fresh consideration and

direct the assessee to show before the AO as to how the interest income in

question cannot be considered as having accrued or arisen to the

assessee. In the set aside proceedings, the AO will examine all legal

aspects of deduction u/s. 36(1)(viia) of the Act.

9. For statistical purposes, the appeal by the Revenue is allowed.

ITA 278/11 (Assessee's appeal)

10. Ground Nos.1, 11 & 12 are general calling for no specific

adjudication.

11. Ground Nos. 2 to 4 raised by the assessee reads as follows:-

ITA Nos. 34 & 278/Bang/2011 Page 7 of 19

"2. On the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) ought to have accepted the explanation offered and refrained from giving directions to the Assessing Officer not to allow the deductions for creation "BAD AND DOUBTFUL RESERVE" U/s 36(1) (viia) of Income Tax Act to the extent of 10% of the aggregate average advances made by the RURAL BRANCHES of the appellant bank.

3. The learned Commissioner of Income Tax (Appeals) ought to have appreciated that, the appellant bank is entitled to claim the deduction U/s 36(1) (viia) of Income Tax Act for creation of "BAD AND DOUBTFUL RESERVE" to the extent of 10% of the aggregate average advances made by the RURAL BRANCHES.

4. The learned Commissioner of Income Tax (Appeals) was not justified in contending that, the appellant bank does not come under the definition of "SCHEDULED BANK" or "NON-

SCHEDULED BANK" as per explanation (ia) of section 36(1) (viia) of Income Tax Act"

12. As we have already seen, the assessee is a cooperative bank. In the

P&L account, the assessee had debited a sum of Rs. 1.50 crores under the

head 'contribution to bad and doubtful'. The real nomenclature ought to

have been "provision for bad and doubtful debts". The assessee made a

claim for such a deduction u/s. 36(1)(viia) of the Act. The relevant

provisions of section 36(1)(viia) as substituted by the IT (Amendment) Act,

1986 by the Finance Act, 1985 and as amended from time to time

reads as follows:-

ITA Nos. 34 & 278/Bang/2011 Page 8 of 19

SECTION 36- OTHER DEDUCTIONS

Other deductions.- (1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28 -

.......

viia) in respect of any provision for bad and doubtful debts made by-

(a) a scheduled bank not being a bank incorporated by or under the laws of a country outside India or a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank, an amount not exceeding seven and one-half per cent of the total income (computed before making any deduction under this clause and Chapter VI-A) and an amount not exceeding ten per cent of the aggregate average advances made by the rural branches of such bank computed in the prescribed manner;

(b) ..........

Explanation : For the purposes of this clause-

......

(vi) "co-operative bank", "primary agricultural credit society" and "primary co-operative agricultural and rural development bank" shall have the meanings respectively assigned to them in the Explanation to sub-section (4) of section 80P"

13. As can be seen from the aforesaid provision, a cooperative bank is

also entitled to claim the aforesaid deduction. The cooperative banks were

entitled to deduction by virtue of amendment made to section 36(1)(viia) by

the Finance Act of 2007 w.e.f. 1.4.2007. It is not in dispute before us that

the assessee is not a primary agricultural credit society or a primary

cooperative agriculture & rural development bank. As can be seen from ITA Nos. 34 & 278/Bang/2011 Page 9 of 19

the provisions of section 36(1)(viia), the quantum of deduction that has to

be allowed is the amount not exceeding 7½% of the total income

computed before making deduction u/s. 36(1)(viia) of Chapter VI + the

amount not exceeding 10% of the aggregate average advances made by

the rural branches of the assessee, computed in the prescribed manner.

14. The assessee had computed the quantum of admissible deduction

u/s. 36(1)(viia) at Rs.1,36,67,562, but nevertheless made a claim for

Rs.1.50 crores on the basis of provision by debit in the P&L account.

15. The AO was of the view that as per balance sheet of the assessee,

the classification of advances given by the assessee showed that none of

the debts of the assessee are considered as bad and doubtful debts and

therefore there was no bad or doubtful debts for which a provision needs to

be created. The AO was also of the view that provisions of section

36(1)(viia) are not applicable to the assessee, which are rather applicable

only to banking sector. According to the AO, assessee cannot be said to

be in the banking sector. The AO therefore rejected the claim of assessee

for deduction of a sum of Rs.1.5 crores. Alternatively, the AO also held that

in case it is held that assessee is entitled to claim deduction u/s. 36(1)(viia),

then the quantum of deduction cannot, in any event, be more than

Rs.1,30,61,552 as per computation given in the order of assessment. It is

to be mentioned that no such computation is given in the order of

assessment.

ITA Nos. 34 & 278/Bang/2011 Page 10 of 19

16. Aggrieved by the order of the AO, the assessee preferred appeal

before the CIT(Appeals). The CIT(A) upheld the order of the AO, following

the decision of the Lucknow Bench of the Tribunal in the case of

Manasarovar Urban Cooperative Bank Ltd. v. DCIT, 126 ITD 172, wherein

it was held that provisions of section 36(1)(viia) of the Act are not

applicable to cooperative banks and are applicable only to scheduled and

non-scheduled banks.

17. Aggrieved by the order of the CIT(A), the assessee has raised

grounds 2 to 4 before the Tribunal.

18. We have heard the rival submissions. The ld. counsel for the

assessee brought to our notice the decision relied upon by the

CIT(Appeals) was in relation to the assessment year prior to the

amendment of the provisions of section 36(1)(viia) by the Finance Act,

2007 w.e.f. 1.4.2007. According to him, as per law as it exists as on the 1st

day of the previous year, the assessee was entitled to claim deduction u/s.

36(1)(viia) of the Act. He, however, submitted that the quantum of

deduction requires fresh consideration by the AO, as neither the AO nor the

CIT(A) has gone into the correctness of the quantum of deduction claimed

by the assessee.

19. The ld. DR relied on the order of the CIT(Appeals).

ITA Nos. 34 & 278/Bang/2011 Page 11 of 19

20. We have considered the rival submissions. We are of the view that

the plea put forth by the ld. counsel for the assessee deserves to be

accepted. As rightly contended by him, as per law as it prevailed as on

1.4.2007 applicable to A.Y. 2007-08, the assessee which is a cooperative

bank was entitled to deduction on account of provision for bad and doubtful

debts. The AO as well as CIT(Appeals) have overlooked this aspect. We

are, however, of the view that quantum of deduction to be allowed has to

be worked out by the AO afresh, after affording opportunity of being heard

to the assessee. We may also clarify that the deduction has to be

computed in the manner laid down in the provisions and to the extent the

provision is created in the books of account of the assessee. The relevant

grounds of appeal of the assessee are accordingly treated as allowed for

statistical purposes.

21. Ground Nos. 5 to 7 raised by the assessee read as follows:-

"5. On the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) ought to have accepted the explanation offered and refrained from confirming the disallowance of deduction of Rs. 1,65,96,821/- made by the Assessing Officer, being the "Interest on loans received during the year, but pertains to earlier years".

6. The learned Commissioner of Income Tax (Appeals) ought to have appreciated that, the income pertains to earlier years cannot be taxed in the current year under any provisions of Income Tax Act.

7. The learned Commissioner of Income Tax (Appeals) was not justified in contending that, in order to get out of clutches of tax incidence, the appellant has claimed the deduction of Rs.

ITA Nos. 34 & 278/Bang/2011 Page 12 of 19

1,65,96,821/- being "Interest on loans received during the year, but pertains to earlier years".

22. In the statement of total income filed along with the return of income,

the assessee deducted from the profit as per P&L account a sum of

Rs.1,65,96,812 representing "interest received during the previous year but

pertaining to earlier year". It is not in dispute that the aforesaid sum

represents interest income of the assessee which accrued to the assessee

during the period prior to the previous year relevant to A.Y. 2007-08, but

was not recognized in the books of account on accrual basis. The

assessee follows mercantile system of accounting. Therefore the interest

income that accrued to the assessee ought to have been included as

income of the period prior to the previous year relevant to A.Y. 2007-08.

The assessee did not do so, but accounted the interest income on receipt

basis. According to the assessee, interest income has to be accounted

only on receipt basis, as per the Karnataka Co-operative Societies Rules,

1960. Therefore, the assessee accounted for interest income on receipt

basis. This was the method consistently followed by the assessee. The

assessee pointed out that accounting interest income either on accrual

basis or receipt basis had no impact under the Income Tax Act, 1961, till

A.Y. 2006-07, because u/s. 80P(2)(a)(i), income of a cooperative society

derived from the business of banking was exempt from taxation. However,

section 80P(4) which came into effect from 1.4.2007 provided that

provisions of Sec.80P will not apply to a co-operative Bank. The assessee, ITA Nos. 34 & 278/Bang/2011 Page 13 of 19

thus, pointed out that interest income which accrues or arises during the

previous year relevant to A.Y. 2007-08 alone can be taxed. Interest

income that accrues or arises for the period earlier to previous year

relevant to A.Y. 2007-08 cannot be brought to tax, just because the same is

recorded in the books of account of previous year relevant to A.Y. 2007-08

on receipt basis.

23. The AO held that interest income of Rs.1,65,96,812 was interest on

sticky loans and can be considered as accrued only when the same is

received by the assessee and therefore the said interest income is taxable.

24. The CIT(A) on the above issue held that assessee has failed to

prove that interest income of Rs.1,65,96,821 was interest income of period

prior to previous year relevant to A.Y. 2007-08. The following were the

relevant observations of the CIT(A):-

"12. I have considered the appellant's arguments, also perused the assessment order. A perusal of the statement of computation sheet reveals that a sum of Rs.60,7l,459/- was added and then deducted of Rs.1,65,96,812/- stating that 'interest received during the year but pertains to earlier year'. It is not disputed fact that the appellant adopted mercantile system of accounting and following the same years to year. The appellant contended that income pertains to the relevant assessment year should alone to be taxed and not the income pertaining to either earlier years of subsequent years by applying the provisions of section 4(1) of the Act. However, the appellant has not furnished break-up of interest for the assessment year 2006-07 and 2007-08 to show that interest credited to profit and loss account to Rs.9,10,13,105/- includes the earlier year's interest as such burden of proving lies on the appellant.

ITA Nos. 34 & 278/Bang/2011 Page 14 of 19

13. A close analysis of the statement, the appellant-bank declared interest on loan/advances and interest on investment as below:-

Y.E. on Y.E. on Y,E. on 31.03.2005 31.03.2006 31.03.2007 In Rs. In Rs. In Rs. Interest on loan and 7,74,03,010 8,26,70,388 9,10,13,106 Advances

Interest on investment 1,92,46,213 1,98,18,048 1,55,35,868

Aforesaid interest has been received/receivable from loans advances and from investment in Government securities year wise details as under -

Loans and Advances 58,34,96,310 64,60,92,353 73,89,62,726 Investment 13,75,32,500 14,10,32,500 25,35,37,500 From the above it indicates that loans and advances and investment (including Govt. securities are increasing trend, correspondingly interest on loans and advances also increased from Rs.8.26 lakhs to Rs.9.10 lakhs. If interest of Rs.1,65,96,812/- to be reduced from Rs.9,10,13,106/-, net interest would be Rs.7,44,16,294/- which is less than interest declared in the assessment year 2005-06 i.e., Rs.7,74,03,010/-. In view of this fact there is no merit in the appellant's contention that income pertains to the financial year relevant to the assessment year 2006-07.

14. The appellant following mercantile system of accounting, shows following facts and figures -

Y.E. on Y.E. on Y,E. on 31.03.2005 31.03.2006 31.03.2007

Interest receivable on 4,84,08,853 6,61,50,558 8,16,28,582 overdue Interest receivable on 34,15,500 34,00,000 -- investment

15. A verification of the return of income for the assessment year 2005-06 and 2006-07 reveals that no adjustments were made ITA Nos. 34 & 278/Bang/2011 Page 15 of 19

on account of interest pertaining to earlier. It means that entire interest was offered as income irrespective whether interest actually received or accrued, more so because income of the appellant was exempt u/s. 80P of the Act. There is weight in the Assessing Officer's observation that in order to get out of clutches of tax incidence, the appellant adopted such stand. As discussed above, there are no details to substantiate the appellant's claim, hence disallowance of Rs.1,65,96,812/- is confirmed. The ground of appeal in this issue thus fails."

25. Aggrieved by the order of CIT(A), the assessee has raised ground

Nos. 5 to 8 before the Tribunal.

26. We have heard the rival submissions. The ld. counsel for the

assessee submitted that the AO accepted the fact that interest income of

Rs.1,65,96,821 was interest which accrued to the assessee during the

period earlier to previous year relevant to A.Y. 2007-08 and was accounted

by the assessee in the books of the previous year relevant to A.Y. 2007-08

on receipt basis. The only basis on which the AO brought such interest

income to tax was that the interest income of Rs.1,65,96,821 was interest

on sticky loans and therefore was accounted by the assessee only on

receipt basis and therefore the said interest income accrued to the

assessee only during the previous year relevant to A.Y. 2007-08.

According to the ld. counsel for the assessee, the CIT(A) has therefore

proceeded on a totally irrelevant consideration. It was his submission that

the findings of the CIT(A) in para 13 of his order are incorrect and contrary

to the findings of the AO. He submitted that there was no basis for the AO ITA Nos. 34 & 278/Bang/2011 Page 16 of 19

to consider that the interest income in question was interest on sticky loans.

The other submissions made before the AO were reiterated.

27. The ld. DR relied on the order of the CIT(A).

28. We have given a very careful consideration to the rival submissions.

At page 7 of the assessee's paperbook, a copy of the particulars of interest

on loans recovered during the previous year relevant to A.Y. 2007-08 but

pertaining to the period before 31.3.2006 has been given. There is no basis

for the AO to come to the conclusion that the interest income in question is

interest on sticky loans. The AO has proceeded on the basis that since

interest has to be accounted on receipt basis under the Karnataka Co-

operative Societies Rules, 1960, the loans in question were sticky loans. In

our view, such conclusions cannot be sustained. The claim made by the

assessee in this regard about the nature of interest income and its time of

accrual has to be accepted. The conclusions of the CIT(A) in para 13 of his

order, in our view, is again based on surmises and cannot be sustained.

Neither the AO nor the CIT(A) called upon the Assessee to explain as to

whether the interest income in question is interest on sticky loans which

was accounted for as income only on receipt basis. As we have already

observed, accounting entries in the books of the assessee regarding

interest income assumed significance only after A.Y. 2006-07 when interest

income became taxable in view of insertion of section 80P(4) to the Act

w.e.f. 1.4.2007. Therefore, there is no merit in the observations of the ITA Nos. 34 & 278/Bang/2011 Page 17 of 19

CIT(A) regarding lack of entries in the books of account of the assessee for

A.Y. 2005-06 and 2006-07. We are therefore of the view that it would it

would just and proper to direct the Assessee to furnish evidence before the

AO to show as to how the interest income in question is not interest on

sticky loans which was accounted for as income only on receipt basis. For

the reasons stated above, we set aside the order of the CIT(A) on this

issue and remand the issue with regard to taxing the sum of

Rs.1,65,96,812 to the AO for fresh consideration. Ground Nos.5 to 7 are

thus allowed for statistical purpose.

29. Ground Nos. 8 to 10 raised by the assessee read as follows:-

"8. On the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) ought to have accepted the explanation offered and refrained from confirming the disallowance of deduction of Rs. 80,00,000/- made by the Assessing Officer, being amount transferred from NPA Reserve, which represents the accumulated income of earlier years.

9. The learned Commissioner of Income Tax (Appeals) ought to have appreciated that, the amount transferred from NPA Reserve, which represents the accumulated income of earlier years, cannot be taxed in the current year under any provisions of Income Tax Act.

10. Without prejudice the directions given by the Commissioner of Income Tax (Appeals) are arbitrary and unjustified in the eyes of law and the same are liable to be cancelled."

30. At the time of hearing of the appeal, it was noticed from the

computation of total income, a copy of which is placed at page 5 of ITA Nos. 34 & 278/Bang/2011 Page 18 of 19

assessee's paperbook and which is enclosed as Annexure-I to this order,

that the assessee has started the computation of total income with profit as

per P&L account and added and reduced certain sums. One such sum so

reduced is Rs.80 lakhs on account of amount transferred from NPA reserve

created out of earlier year profits. The net loss for the year after such

additions and reductions is a loss of Rs.61,14,560. The AO has computed

total income in the order of assessment fro the loss declared in the

computation of total income of (-) Rs.61,14,560. There is no further

addition of Rs.80 lakhs in the order of assessment. Therefore, the claim of

the assessee for deduction of Rs.80 lakhs has been accepted by the AO.

31. Without realizing this aspect, the assessee has raised a ground

before CIT(A) contending that the AO wrongly disallowed the claim of

assessee for deduction of Rs.80 lakhs on account of amount transferred to

NPA reserve. The CIT(A) dismissed the said ground of appeal, against

which the assessee has raised ground Nos.8 to 10 before the Tribunal.

32. Since the sum of Rs.80 lakhs was already allowed as deduction by

the AO, there can be no grievance by the assessee and the ground of

appeal raised by the assessee before the CIT(A) in this regard is also held

to be not arising out of the order of the AO. The grounds of appeal Nos. 8

to 10 are therefore dismissed as not arising out of the order of the AO.

33. Thus, the appeal by the assessee is partly allowed for statistical

purpose.

ITA Nos. 34 & 278/Bang/2011 Page 19 of 19

34. In the result, the appeal by the Revenue is allowed for statistical

purposes, while the appeal of the assessee is partly allowed for

statistical purpose.

Pronounced in the open court on this 20th day of March, 2015.

Sd/- Sd/-

( JASON P. BOAZ ) ( N.V. VASUDEVAN ) Accountant Member Judicial Member

Encl: Annexure-I.

Bangalore, Dated, the 20th March, 2015.

/D S/

Copy to: 1. Revenue 2. Assessee 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. 6. Guard file

By order

Assistant Registrar/ Senior Private Secretary ITAT, Bangalore.