In West Bengal State Co-operative Bank Ltd. v. DCIT, the Kolkata bench of Income Tax Appellate Tribunal in its recent order has held that the payment made by banks to casual workers on festive occasion can be allowed as deduction under section 37 of the Income Tax Act.
The bench comprising J.Sudhakar Reddy (AM) &A.T. Varkey (JM) were held so while allowing the appeal of assessee.
The appeal was carried before the tribunal against the order of CIT (A) that the expenses were in the nature of salary/wages paid as bonus during Eid/Durga Puja festival to casual staffs like peon, lift man, security staff etc. employed by the appellant through another service provider which is also being a co-operative society and such expenditures are very much incidental to and for the purpose of carrying on day to day business and allowable u/s 37 of the Income Tax Act, 1961.
After hearing the rival contentions, the tribunal bench found that this issue covered by the decision of the Co-ordinate Bench of the Tribunal in the assessee’s own case wherein held that expenditure of an amount paid as Tips & Baksis by the bank to casual workers on festive occasion cannot be disallowed.
Based on this aforementioned decision the bench allowed the grounds of assessee.
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