Ita/126/2008 Of The Commissioner Of Income Tax v. Kerala Financial Corporation, Tvm

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER WEDNESDAY, THE 5TH NOVEMBER 2008 / 14TH KARTHIKA 1930 I.T.A.No.126 of 2008 ------------------------------------ (ORDER DATED 1.7.2005 OF THE INCOME TAX APPELLATE TRIBUNAL,COCHIN BENCH, IN INT.T.A.No.82/2004) (ASSESSMENT YEAR 1999-2000) .................... APPELLANT/APPELLANT/REVENUE:- ------------------------------------------------------- COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY STANDING COUNSEL FOR I.T. SRI.JOSE JOSEPH SRI.GEORGE K.GEORGE, SC FOR IT. RESPONDENT/RESPONDENT:- ---------------------------------------------- KERALA FINANCIAL CORPORATION, THIRUVANANTHAPURAM. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 05/11/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- H.L.Dattu,C.J. & A.K.Basheer, J. ------------------------------------------- I.T.A.No.126 of 2008 -------------------------------------------- Dated, this the 5[th] November, 2008 JUDGMENT H.L.Dattu,C.J. The Revenue, being aggrieved by the orders passed by theIncome Tax Appellate Tribunal, Cochin Bench in Int.T.A.No.82/Coch/04,dated 1[st] July, 2005, is before us in this Income Tax Appeal, filed underSection 260A of the Income Tax Act, 1961 (“Act” for short). (2) The Revenue has framed the following questions of lawfor our consideration and decision. They are as under: “1.Whether, on the facts and in the circumstancesof the case, interest on deposits with banks (other thanReserve Bank) is exempt under section 2(7) of the Interest TaxAct? 2.Whether, on the facts and in the circumstancesof the case, the Tribunal is right in law in confirming thedirection of the Commissioner of Income Tax (Appeals) toexclude the interest on deposits received from banks from thechargeable interest holding that the interest on deposits withthe banks are outside the provisions of Section 2(7) andSection 5 of the Interest Tax Act?” (3) The Tribunal, while rejecting the Revenue's appeal, has relied upon its earlier decision in Int.T.A.Nos.12, 13 and 14 of 1998 dated23.04.2002, for the assessment years 1993-94, 1994-95 and 1995-96. (4) The Revenue, being aggrieved by the orders inInt.T.A.Nos.12, 13 and 14 of 1998 dated 23.04.2002, was before this Courtin I.T.A.No.275 of 2002 and connected cases. (5) The parties in I.T.A.No.275 of 2002 are the same asparties in this appeal also. A Division Bench of this Court, while disposingof I.T.A.No.275 of 2002 and connected cases by its order dated 4[th] June,2008, has rejected the Revenue's appeals. (6) Since the Tribunal has followed its earlier decision andsince that decision of the Tribunal has been confirmed by this Court inI.T.A.Nos.275 of 2002 and connected cases, decided on 4[th] June, 2008, inour opinion, the questions of law framed by the Revenue requires to beanswered against the Revenue and in favour of the assessee. (7) Accordingly, while rejecting the appeal, the questions oflaw framed by the Revenue is answered against the Revenue and in favourof the assessee. Ordered accordingly. H.L.Dattu Chief Justice vku/-