The Tax Publishers2021 TaxPub(DT) 1131 (Del-Trib)


Section 37(1)

Where the percentage of non-payable deposits as a percentage of total Customer's deposits did not increase or decrease after assessment year 2006-07, in the absence of any factual analysis of the customer's deposits in current assessment year by the AO or by the assessee, the decision in the year under appeal was being given on the basis of the same presumption and the disallowance was restricted to 11.01%.

Business expenditure - Allowability - Interest on customers deposit account -

AO after rejecting the contentions raised by the assessee company made addition on account of disallowance of interest on customers deposit account on the ground that the whole amount of deposit was held to be its own funds and added the same to the total income of the assessee. CIT(A), however, on appeal by assessee, partly allowed the appeal. Held: It was not in dispute that in assessment year 2006-07, CIT(A) held that only the amount of Rs. 1,27,69,83,720 was not payable out of the total deposit of Rs. 11,59,32,90,000 having ratio of these two figures of 11.01% and this order was also followed in assessment years 2008-09, 2009-10 and 2010-11. When the method of determining the ratio between the amount payable out of total deposits has been consistently followed by the Revenue Department since assessment year 2006-07 and the order passed by CIT(A)'s has not been challenged nor any distinguishing facts and contrary provisions of law have been brought on record by the Revenue, there was no scope to interfere with the findings returned by CIT(A).


FAVOUR : Partly in favour of assessee.

A.Y. : 2012-13


Section 14A


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