Ita/5/2015 Of The Commissioner Of Income-Tax v. The Vysya Bank Ltd

IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 2 DAY OF MARCH 27071| PRESENT| THE HON’BLE MR. JUSTICE ALOK ARADHE AND| THE HON’BLE MR. JUSTICE ASHOK S. KINAGLILT.A. NC.5 OF JZOL BETWEEN: 1.|THE COMMISSIONER OF INCOME-TA® C.R. BUILDING, QUEENS ROAD BANGALORE. 2.|THE ASST. COMMISSIONER OF INCOME-TAXCIRCLE-11(4), RASHTROTHANA BHAVANCIRCLE-11(4), RASHTROTHANA BHAVAN NRUPATHUNGA ROAD BANGALORE-56000 1. .., APPELLANTS. (BY SRI. K.V. ARAVIND, ADV.,) AND" THE VYSYA BANK LITD.,(NOW ING VYSYA BANK LTD.,)ING VYSYA HOUSENO.25, M.G. ROADBANGALORE-560001 PAN: AABCTO5290M ~. RESPONDENT (BY SRI. A. SHANKAR, SR. COUNSEL FOR.SRI. M. LAVA, ADV.) THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX|ACT 1961, ARISING OUT OF ORDER DATED 28.08.2014 PASSEDIN ITA NO.733/BANG/2011 FOR THE ASSESSMENT YEAR 2001-02,PRAYING TO: | (1) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW,STATED ABOVE. (ii) ALLOW THE APPEAL AND SET ASIDE THE ORDERS.PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BANGALOREIN ITA NO.733/BANG/2011 DATED 28.08.2014 CONFIRMING THEORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE.ORDER PASSED BY THE ASST. COMMISSIONER OF INCOME TAX,CIRCLE-11(4), BANGALORE. THIS ILT.A. COMING ON FOR’ HEARING, THIS DAY, |ALOK ARADHE J.,DELIVERED THE FOLLOWING: | JUDGMENT This appeal under Section 260A of the Income TaxAct, 1961 (hereinafter referred to as the Act for short)nas been preferred by the revenue. The subject matterof the appeal pertains to the Assessment year 2001-02.The appeal was admitted by a bench of this Court videorder dated 03.08.2015 on the following substantialquestions of law:| “(1) WhetherOf)thefacts|andcircumstances of the case, the Tribunal wasjustified in holding that the assessee Is.eligible for claim of Rs.23,05,49,466/- asrevenue expenditure without appreciatingthat the assessee has spent the same onnetworkingofT75brancheswith a centralizedprocessingsolutionandtheactivity has a long term benefit, warrantingcapitalization of the expenditure spent forthe same? (ii) Whether on the facts and in the.circumstances of the case, the Tribunal wasjustified in law in allowing deduction of.Rs.1,00,000/- under Section 36(1)(vii) even.though the assessee did not receive anyincome during the year and fs not eligible forthe deduction? (iii) Whether on the facts and in the.circumstances of the case, the Tribunal wasjustified in law in allowing the amortizationof cost over face value of Investment "heldto maturity” of Rs.3,19,37,45/7/- withoutappreciatingthat|suchsecuritieshaveCharacteristic of capital asset rather thanStock in trade and the Investment done asper RBI Guidelines is not an allowablerevenue expenditure in terms of Section3/(1) of the Act? (iv) Whether on the facts and in the.circumstances of the case, the Tribunal wasjustified in law in holding that the provisionsof Section 115JB are not applicable to theassessee, it being a banking company, even.though there is no such provision/exclusion—under the IT Act?” For the reasons assigned by us in the judgmentpassed today in I.T.A.No.4/2015, this appeal is disposedalso of in same terms and with similar directions. Sd/-JUDGE. SS| Sd/-—JUDGE.