Section 37 of Income Tax Act, 1961—In the instant case, appeal of revenue is directed against order passed by ITAT.

The first two questions of law as proposed by the revenue has something to do with the Section 37 of the Act, 1961. It appears from the materials on record that the assessee is a cooperative bank. It claims the deduction of the amount of Rs. 6,57,614/under the head of 'Members Welfare Fund'. The Assessing Officer took the view that the expenditure is nothing, but an adhoc estimated appropriation towards the welfare of the members, who were none other than the owners of the bank. The Assessing Officer recorded a finding that such expenses was being incurred exclusively for the benefit of the members and in such circumstances, it could not be treated as business expenditure in accordance with the provision of Section 37 of the Act.

Held that— the first two questions as proposed by the Revenue are no longer resintegra in view of a decision of this Court in the case of Karjan Cooperative Cotton Sales Ginning & Pressing Society (supra).

Tribunal has allowed the expenditure by holding that the assessee had to maintain good relations with the members and thus, the expenditure incurred is towards the welfare of the Members and same is supported by the decision of above mentioned judgment.[PR. COMMISSIONER INCOME TAX, SURAT 1 VERSUS PRIME CO OP BANK LTD][2019] 16 ITCD Online (22) [GUJARAT HIGH COURT]