H.g.ramesh, J. (Oral) v. Saurasntra Kutch Stock Exchange Ltd.1(2008) 14 Scc 171

-1- - ITA Nos.389/2016 & 669-6/70/2016 IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS 29 DAY QF JUNE 2ZO1/7 PRESENT| THE HON'BLE MR. JUSTICE H.G.RAMESHAND THE HON‘'BLE MRS, JUSTICE K.S.MUDAGAL $INCOME TAX APPEAL NOS.389/2016 & 669670/2016 BETWEEN : STATE BANK OF MYSOREHEAD OFFICE, K.G.ROAD|BANGALORE-560 OOQY .. APPELLANT| (BY SRI P.DINESHA FOR SRI K.R.VASUDEVAN, ADVOCATES) AND = THE ADDITIONAL COMMISSIONER OFINCOME TAX, LIU, JSS TOWER-100 FEET RING ROADBANASHANKARI, III STAGEBANGALORE-560 O85.. RESPONDENT| (BY SRI K.V.ARAVIND, STANDING COUNSEL)| THESE INCOME TAX APPEALS ARE FILED UNDER SECTION.260-A OF I.T.ACT, 1961 PRAYING TO FORMULATE THE)SUBSTANTIAL QUESTIONS OF LAW AND [QO ALLOW THEAPPEALS BY SETTING ASIDE THE COMMON ORDER OF THE [TAT|PASSED IN MP NO.63/BANG/2015 (ITA NO.916/BANG/2011 FOR.AY 2002-03), MP NO.82 AND 83/BANG/2015 (ITA NO.1242 AND|1243/BANG/2011 FOR AY 2003-04 AND AY 2004-05). THESE|INCOME|TAXAPPEALSCOMINGON|FORADMISSION, THIS’ DAY,H.G.RAMESH J], DELIVERED THEFOLLOWING: -2- - ITA Nos.389/2016 & 669-6/70/2016 JUDGMENT H.G.RAMESH, J. (Oral)& 1. Sri K.V.Aravind'learned standing counsel takes notice|for the respondent. Heard the learned counsel appearing for.the parties. In support of the appeals, learned counsel for|the appellant relies on a decision of the Hon’ble Supreme|Court in CIT v. Saurasntra Kutch Stock Exchange Ltd.|1(2008) 14 SCC 171] 2 The reasoning of the Tribunal in passing the| impugned order dated Marcn 5, 2016 is as follows: “4 We nave considered the rival SUDMISSIONS as}well as the relevant material on record. [It is notdisputedthatfortneassessment|YEd ISunder|consideration, the CIT (Appeals) has decided the dispute.of addition made by the Assessing Officer in respect oftne recovery of the bad debts by discussing the.provisions of section 41(1) and 41(4) in detail. However,the CIT (Appeals) nas decided the issue in favour of the.assessee by following the decision of this Tribunal for.the Assessment Year 2005-06. When the appeals of the.revenue were disposed off by the impugned orders, the.Tribunal has simply followed the _ finding for thAssessment Year 2005-06 and therefore the applicability|of section 41(1) in respect of the assessment yearsunder consideration has not been considered and/decided. We find that the applicability of section 41(4) or.41(1) depends upon the fact whether the recovery ofthe amount in respect of bad debts pertains to the claim.made by the assessee and allowed in the earlier year.under|Section36(1)(vii)or36(1)(viia)..FortheAssessment Year 2005-06, the Tribunal nas decided thisissue by considering the fact that when the assessee Nas.made a claim under Section 36(1)(viil), then theprovisions of section 41(4) are not applicable which. - ITA Nos.389/2016 & 669-6/70/2016 pertains to section 36(1)(viia). Since there is no finding.on this fact whether any part of the amount recoveredby the assessee pertains to the claim allowed in the.earlier year(s) under section 36(1)(vii) and therefore the.Same has to be considered for disallowance under.Section 41(1). Therefore, as far as the finding of the.TridDunal for the Assessment Year 2005-06, we do concuron principle about the applicability of the provisions of.Section 41(4). However, since there is no specificfinding of fact in the impugned orders regarding the.claim of the assessee was earlier allowed under wnhicn ofthe provisions i.e. 36(1)(vil) or 36(1)(vila) of the Act.and any of the amount wnicn was allowed in the earlier.year (supra)) under these provisions were recoveryduring these assessment years. Accordingly, we modify.the impugned orders and direct the Assessing Officer to.verify the facts as discussed above and then decide the.issue after giving an opportunity of hearing to the.assessee., We have examined the matter in the light of the above. decision. 3.In our opinion, no substantial question of law arises| for determination in these appeals. Tne appeals are)