Ita/97/2010 Of The Commissioner Of Income Tax v. M/S.catholic Syrian Bank Ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF DECEMBER 2018 / 12TH AGRAHAYANA, 1940 ITA.No. 3 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 919/COCH/2007 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 30-06-2009 APPELLANT/S:/RESPONDENT/REVENUE: THE COMMISSIONER OF INCOME TAX, TRICHUR. BY ADV. SRI.PKR MENON, SR. COUNSEL, GOI (TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S: CATHOLIC SYRIAN BANK LTD.,TRICHUR. BY ADVS.SRI.JOSEPH MARKOSE (SR.) SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS SRI.V.ABRAHAM MARKOS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2018, ALONG WITH ITA Nos.23, 58, 65, 81, 82, 85, 88, 97, 100 and 104 of 2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ALONG WITH ITA Nos.23, 58, 65, 81, 82, 85, 88, 97, 100 and 104 of ITAs3/2010 & conns. IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF DECEMBER 2018 / 12TH AGRAHAYANA, 1940 ITA.No. 23 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 879/COCH/2004 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 30-06-2009 APPELLANT/S:/RESPONDENT/REVENUE: THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.PKR MENON, SR.COUNSEL, GOI (TAXES)SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S:/APPELLANT/ASSESSEE: M/S. CATHOLIC SYRIAN BANK LTD., THRISSUR. BY ADVS. SRI.JOSEPH MARKOSE (SR.) SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS SRI.V.ABRAHAM MARKOS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2018, ALONG WITH ITA.3/2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs3/2010 & conns. -3 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF DECEMBER 2018 / 12TH AGRAHAYANA, 1940 ITA.No. 58 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 131/COCH/2008 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 06-08-2009 APPELLANT/S:/RESPONDENT/REVENUE: THE COMMISSIONER OF INCOME TAX, THRISSUR BY ADV. SRI.PKR MENON, SR.COUNSEL, GOI (TAXES)SRI.JOSE JOSEPH, SC, FOR INCOME TAX DEPT. RESPONDENT/S:/APPELLANT/ASSESSEE: M/S.CATHOLIC SYRIAN BANK LTD., THRISSUR. BY ADVS. SRI.JOSEPH MARKOSE (SR.) SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS SRI.V.ABRAHAM MARKOS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2018, ALONG WITH ITA.3/2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs3/2010 & conns. IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF DECEMBER 2018 / 12TH AGRAHAYANA, 1940 ITA.No. 65 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 406/COCH/2007 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 6.8.2009 APPELLANT/S:/RESPONDENT/REVENUE: THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.PKR MENON, SR.COUNSEL, GOI (TAXES)SRI.JOSE JOSEPH, SC, FOR INCOME TAX DEPT. RESPONDENT/S:/APPELLANT/ASSESSEE: M/S.CATHOLIC SYRIAN BANK LTD., THRISSUR. BY ADVS.SRI.JOSEPH MARKOSE (SR.) SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS SRI.V.ABRAHAM MARKOS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2018, ALONG WITH ITA.3/2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs3/2010 & conns. -5 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF DECEMBER 2018 / 12TH AGRAHAYANA, 1940 ITA.No. 81 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 130/COCH/2007 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 06-08-2009 APPELLANT/S:/RESPONDENT/REVENUE: THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.PKR MENON, SR.COUNSEL, GOI (TAXES)SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S:/APPELLANT/ASSESSEE: M/S. CATHOLIC SYRIAN BANK LTD., THRISSUR. BY ADVS.JOSEPH MARKOS (SR.) SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2018, ALONG WITH ITA.3/2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs3/2010 & conns. -5 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF DECEMBER 2018 / 12TH AGRAHAYANA, 1940 ITA.No. 81 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 130/COCH/2007 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 06-08-2009 APPELLANT/S:/RESPONDENT/REVENUE: THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.PKR MENON, SR.COUNSEL, GOI (TAXES)SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S:/APPELLANT/ASSESSEE: M/S. CATHOLIC SYRIAN BANK LTD., THRISSUR. BY ADVS.JOSEPH MARKOS (SR.) SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS SRI.V.ABRAHAM MARKOS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2018, ALONG WITH ITA.3/2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs3/2010 & conns. -6 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF DECEMBER 2018 / 12TH AGRAHAYANA, 1940 ITA.No. 82 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 854/COCH/2007 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 06-08-2009 APPELLANT/S:/APPELLANT/REVENUE: COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.PKR MENON, SR.COUNSEL, GOI (TAXES)SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S:/RESPONDENT/ASSESSEE: M/S.CATHOLIC SYRIAN BANK LTD., THRISSUR. BY ADVS. SRI.JOSEPH MARKOSE (SR.) SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS SRI.V.ABRAHAM MARKOS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2018, ALONG WITH ITA.3/2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: -7 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF DECEMBER 2018 / 12TH AGRAHAYANA, 1940 ITA.No. 85 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 700/COCH/2007 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 06-08-2009 APPELLANT/S:/APPELLANT/REVENUE: THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.PKR MENON, SR.COUNSEL, GOI (TAXES)SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S:/RESPONDENT/ASSESSEE: M/S.CATHOLIC SYRIAN BANK LTD., THRISSUR. BY ADVS. SRI.JOSEPH MARKOSE (SR.) SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS SRI.V.ABRAHAM MARKOS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2018, ALONG WITH ITA.3/2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs3/2010 & conns. IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF DECEMBER 2018 / 12TH AGRAHAYANA, 1940 ITA.No. 88 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 346/COCH/2008 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 06-08-2009 APPELLANT/S:/APPELLANT/REVENUE: THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.PKR MENON, SR.COUNSEL, GOI (TAXES)SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S:/RESPONDENT/ASSESSEE: M/S.CATHOLIC SYRIAN BANK LTD., TRICHUR. BY ADVS. SRI.JOSEPH MARKOSE (SR.) SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS SRI.V.ABRAHAM MARKOS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2018, ALONG WITH ITA.3/2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs3/2010 & conns. -9 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF DECEMBER 2018 / 12TH AGRAHAYANA, 1940 ITA.No. 97 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 345/COCH/2008 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 6.8.2009 APPELLANT/S:/APPELLANT/REVENUE: THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.PKR MENON, SR.COUNSEL, GOI (TAXES)SRI.JOSE JOSEPH, SC, FOR INCOME TAX DEPT. RESPONDENT/S:/RESPONDENT/ASSESSEE: M/S.CATHOLIC SYRIAN BANK LTD., THRISSUR. SRI.ISAAC THOMAS SRI.V.ABRAHAM MARKOS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2018, ALONG WITH ITA.3/2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs3/2010 & conns. -9 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF DECEMBER 2018 / 12TH AGRAHAYANA, 1940 ITA.No. 97 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 345/COCH/2008 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 6.8.2009 APPELLANT/S:/APPELLANT/REVENUE: THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.PKR MENON, SR.COUNSEL, GOI (TAXES)SRI.JOSE JOSEPH, SC, FOR INCOME TAX DEPT. RESPONDENT/S:/RESPONDENT/ASSESSEE: M/S.CATHOLIC SYRIAN BANK LTD., THRISSUR. BY ADVS.JOSEPH MARKOS (SR.) SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS SRI.V.ABRAHAM MARKOS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2018, ALONG WITH ITA.3/2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs3/2010 & conns. IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF DECEMBER 2018 / 12TH AGRAHAYANA, 1940 ITA.No. 100 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 132/COCH/2008 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 06-08-2009 APPELLANT/S:/RESPONDENT/REVENUE: THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.PKR MENON, SR.COUNSEL, GOI (TAXES)SRI.JOSE JOSEPH, SC, FOR INCOME TAX DEPT. RESPONDENT/S:/APPELLANT/ASSESSEE: M/S. CATHOLIC SYRIAN BANK LTD., THRISSUR. BY ADVS.SRI.JOSEPH MARKOSE (SR.) SRI.ABRAHAM JOSEPH MARKOS SRI.V.ABRAHAM MARKOS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2018, ALONG WITH ITA.3/2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs3/2010 & conns. IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF DECEMBER 2018 / 12TH AGRAHAYANA, 1940 ITA.No. 104 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 812/COCH/2007 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 06-08-2009 APPELLANT/S:/RESPONDENT/REVENUE” THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV.SRI.PKR MENON, SR.COUNSEL, GOI (TAXES)SRI.JOSE JOSEPH, SC, FOR INCOME TAX DEPT. RESPONDENT/S:/APPELLANT/ASSESSEE: M/S. CATHOLIC SYRIAN BANK LTD., THRISSUR. BY ADVS.SRI.JOSEPH MARKOSE (SR.) SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS SRI.V.ABRAHAM MARKOS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2018, ALONG WITH ITA.3/2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs3/2010 & conns. ITA Nos.3, 23, 58, 65, 81, 82, 85, 88, 97, 100 and 104 of 2010 J U D G M E N T K.Vinod Chandran, J. The above appeals are all by the Departmentchallenging various orders of the Income TaxAppellate Tribunal. For the assessment year 1999-2000, there are two appeals filed - ITA Nos.3/2010and 23/2010 - arising from orders under Sections143(3) and 147 of the Income Tax Act, 1961 ('Act',for short). There are also more than one appealfiled in many of the assessment years. There arealso years in which appeals were filed by theDepartment and the assessee-Bank before the Tribunal,and the Tribunal having held in favour of theassessee-Bank, the Department has filed appeals forthe said years arising from those orders of theTribunal. There are common issues in many of theappeals, which shall be dealt with together. 2.In ITA No.3/2010, the following ITAs3/2010 & conns. -13 questions arise for consideration:- “(1)Whether, on the facts and in thecircumstances of the case and amendment to 2[nd]proviso to section 43B being effective from01.04.2004 is not payment to the Pensioncontribution Fund after the due dates animpermissible deduction? (2)Whether, on the facts and in thecircumstances of the case-, 2.In ITA No.3/2010, the following ITAs3/2010 & conns. -13 questions arise for consideration:- “(1)Whether, on the facts and in thecircumstances of the case and amendment to 2[nd]proviso to section 43B being effective from01.04.2004 is not payment to the Pensioncontribution Fund after the due dates animpermissible deduction? (2)Whether, on the facts and in thecircumstances of the case-, i)the assessee is entitled toclaim the expenses under the head LeaseEqualization charges; ii) is not the Lease Equalizationcharges a provision made towards a futureliability and hence an impermissible deduction inthe light of the decision of the Madras HighCourt in the case of Tamil Nadu Power Finance?” 3.On the first question regarding the pension fund as available under the respondent-assessee-Bank, it is submitted by the learned SeniorCounsel that there is no question of any employees’contribution and the contribution is made exclusivelyby the employer. The specific question raised isalso as to whether the second proviso to Section 43Bbeing brought into the statute book on 01.04.2004,the deduction is impermissible insofar as the paymentto pension fund having been made after the due dates.The Honourable Supreme Court in (2009) 319 ITR 306 ITAs3/2010 & conns. -14 (SC) [Commissioner of Income Tax v. Alom ExtrusionsLtd.] has found that the amendment by introductionof a proviso to Section 43B has to be readretrospectively to give full effect thereto. Hence,the question stands answered in favour of theassessee and against the Revenue upholding the orderof the Tribunal, which affirmed the deduction asgranted by the first appellate authority. 4.The second question in ITA No.3/2010 isalso covered in favour of the assessee as found bythe Honourable Supreme Court in (2018) 404 ITR 409(SC) [Commissioner of Income Tax v. Virtual SoftSystems Ltd.]. The issue of lease equalizationcharges arose in the context of the assessee claimingthe lease rentals to be adjusted towards the cost ofacquisition of the property or machinery, which isleased out. The Guidance Note of the Institute ofChartered Accountants of India providing forseparation of capital recovery element and financeincome has been approved by the Honourable SupremeCourt in the aforesaid decision. Hence, the saidquestion also has to be answered in favour of theassessee and against the Revenue. ITA No.3/2010, ITAs3/2010 & conns. -15 hence, stands rejected. 5.Theaforesaidissueofleaseequalization charges has also been raised in ITANos.58, 100, 81, 65 and 104/2010 for the assessmentyears 2000-01 to 2004-05, respectively. The questionraised of lease equalization charges in the aforesaidITAs is also answered in favour of the assessee andagainst the Revenue. Hence, ITA Nos.58, 65 and104/2010 are rejected, as there arose the aforesaidquestion alone. 6.ITA No.23/2010 raises the following question for the assessment year 1999-2000:- “(1) Whether, on the facts and in thecircumstances of the case and also in the lightof the amendment by the Finance Act (2) of 2009which had introduced Explanation 'g' belowSection 115JA(1) which reads: “(g) the amount or amounts set aside asprovision for diminution in the value of anyasset” is not disallowance of Rs.8,61,53,052/- towardsprovision for bad debts made under section 36(ii)(viia) while calculating the book profit undersection 115JA in accordance with law?” In fact, the specific stand of the Assessing Officer(AO) and the Revenue in the statutory appeal was that ITAs3/2010 & conns. 6.ITA No.23/2010 raises the following question for the assessment year 1999-2000:- “(1) Whether, on the facts and in thecircumstances of the case and also in the lightof the amendment by the Finance Act (2) of 2009which had introduced Explanation 'g' belowSection 115JA(1) which reads: “(g) the amount or amounts set aside asprovision for diminution in the value of anyasset” is not disallowance of Rs.8,61,53,052/- towardsprovision for bad debts made under section 36(ii)(viia) while calculating the book profit undersection 115JA in accordance with law?” In fact, the specific stand of the Assessing Officer(AO) and the Revenue in the statutory appeal was that ITAs3/2010 & conns. in computing minimum alternate tax payable underSection 115JA, the provision for bad and doubtfuldebts has to be added back under clause (c) of theExplanation to Section 115JA(2), which speaks of theprovisions made for meeting liabilities, other thanascertained liabilities. The Honourable SupremeCourt in (2008) 305 ITR 409 [Commissioner of IncomeTax-IV v. HCL Comnet Systems and Services Ltd.]categorically held that the addition made underclause(c); of the provision for bad and doubtfuldebts cannot be permitted. However, clause (g) asnoticed in the question has now been introduced,which has retrospective effect from 01.04.1998onwards. We notice that when the Tribunal consideredthe issue, clause (g) was not introduced, which wasintroduced by the Finance Act, 2009. In suchcircumstances, it is only appropriate that theTribunal considers the issue afresh on the basis ofthe facts and the specific provision of bad anddoubtful debts as provided for by the assessee- Bank.ITA No.23/2010, hence, shall stand remanded. Theparties shall appear before the Tribunal on11.01.2019 and the Tribunal shall consider the issue ITAs3/2010 & conns. -17 expeditiously, especially noticing the fact that theassessment is of the year 1999-2000. 7.The question on treatment of loss onamortisation of securities purchased for a price andthen sold or redeemed at a lower price, arises in ITANos.97, 85 and 82/2010, which appeals are for theassessment years 2000-01, 2003-04 and 2004-05,respectively. The assessee purchases securities atface value or otherwise at a premium. When purchaseis made at a premium and the same is redeemed onmaturity, the assessee gets only the face value ofthe security so purchased. Similarly, when thesecurity is sold before the period of maturity, thenthe assessee at times suffers a loss for reason ofthe market value having fallen. The assessee claimedwrite off of such loss in the years at which theassessee held the security, which was allowed by theTribunal. The issue is covered by a Division Benchjudgment of this Court inITA No.946/2009[Commissioner of Income Tax v. South Indian BankLtd.], the reasoning of which is extracted here-under:- ITAs3/2010 & conns. “The respondent-assessee is a Bank whichpurchased securities at market value abovethe face value. Admittedly, when thesecurities were redeemed, respondent will beentitled to get only face value.Consequently, the loss arising on account ofpurchase at market value is written off ininstalments by spreading over the sameequally for every year until date ofmaturity. We are of the view that theTribunal rightly upheld the assessee'sentitlement to write-off of the loss ininstalments. Consequently the departmentalappeal is dismissed.” The Revenue had filed a Special Leave Petitionagainst the fore quoted judgment, which has beendismissed by order dated 18.10.2010 in CCNo.15556/2010. Hence, the question is answered infavour of the assessee and against the Revenue. The Revenue had filed a Special Leave Petitionagainst the fore quoted judgment, which has beendismissed by order dated 18.10.2010 in CCNo.15556/2010. Hence, the question is answered infavour of the assessee and against the Revenue. 8.One other issue arising in ITA Nos.85and 82/2010 for the assessment years 2003-04 and2004-05, respectively, is the disallowance ofdepreciation in respect of the current category ofinvestments. The aforesaid issue is connected withthe additions made for appreciation in the value ofsecurities which also arise in ITA No.81/2010 for theassessment year 2002-03. The question ondepreciation is as to whether at the time of ITAs3/2010 & conns. -19 valuation of securities to prepare the balance sheeton closure of the financial year if the market valueof the securities is lower, whether the assessee isentitled to depreciation for the reduction in themarket value from the face value. The decision in(2003) 264 ITR 545 (Ker) [Commissioner of Income-taxv. Nedungadi Bank Ltd.] held that for the purpose ofassessment, cost price or market value which ever islower should be adopted as per the RBI guidelines.The assessee had valued its securities at the costprice or market value which ever is lower. Hence,when there is a loss on account of reduction ofmarket value from that of the cost price, theassessee is entitled to claim depreciation. Thequestion on depreciation is, hence, answered infavour of the assessee and against the Revenueaffirming the view of the Tribunal. 9.On the question of additions made forappreciation in the value of securities, the learnedSenior Counsel points out the specific instance inwhich the question arose. The assessee-Bank in aparticular year values a security, the cost price ofwhich is Rs.100/- at the market value of Rs.90/-. ITAs3/2010 & conns. Then, the assessee is entitled to depreciation on thereduction that has been occasioned in the marketvalue, which is the loss suffered by the assessee.However, in the subsequent year, if the market valueexceeds the cost price and the same reaches Rs.105/-,the question is as to what is the addition to bemade. Then, what is to be adopted is the cost price,since what is required as per the RBI guidelines isto show the profits in accordance with the cost priceor the market value whichever is lower. The questionof additions made for appreciation in the value ofsecurities also has to be answered in favour of theassessee and against the Revenue. 10. Yet another issue arising in ITA Nos.85 and 82/2010 for the assessment years 2003-04 and2004-05 is as to whether the excess bad debts writtenoff over and above the existing provisions in non-rural branches can be claimed as an expense withoutsetting off against the existing provision for baddebts for rural branches. The question is covered infavour of the assessee-Bank by the decision of theHonoruabel Supreme Court in (2012) 343 ITR 270 (SC)[Catholic Syrian Bank Ltd. v. Commissioner of Income ITAs3/2010 & conns. -21 Tax]. The question is answered in favour of theassessee and against the Revenue. 11. ITA No.100/2010 for the assessment year2001-02 arises from an order of remand made by theTribunal which we would not interfere with at thisstage. Hence, we decline to answer the questions asraised in the above ITA. 12. One of the questions arising in ITANo.88/2010 is loss on revaluation of unquotedsecurities which the RBI directed the Banks to valueat Re.1/-. The decision in (2011) 339 ITR 606 (Ker)[Commissioner of Income Taxv. Lord Krishna BankLtd.] applies squarely with respect to the said issuealso. Hence, we affirm the order of the Tribunalanswering the question in favour of the assessee andagainst the Revenue. ITAs3/2010 & conns. -21 Tax]. The question is answered in favour of theassessee and against the Revenue. 11. ITA No.100/2010 for the assessment year2001-02 arises from an order of remand made by theTribunal which we would not interfere with at thisstage. Hence, we decline to answer the questions asraised in the above ITA. 12. One of the questions arising in ITANo.88/2010 is loss on revaluation of unquotedsecurities which the RBI directed the Banks to valueat Re.1/-. The decision in (2011) 339 ITR 606 (Ker)[Commissioner of Income Taxv. Lord Krishna BankLtd.] applies squarely with respect to the said issuealso. Hence, we affirm the order of the Tribunalanswering the question in favour of the assessee andagainst the Revenue. 13. In ITA No.88/2010, a further questionarises as to whether the levy of interest as setaside by the Tribunal is proper or not. The Tribunalmerely noticed the fact that the assessee had paidconsiderable advance tax and, hence, there is nowarrant for levy of interest under Section 234C. We ITAs3/2010 & conns. cannot accede to the view that considerable advancetax payment would absolve the liability of interestif it arises under Section 234C. The question,hence, is answered in favour of the Revenue andagainst the assessee. The order of the Tribunal isset aside and it is directed that the AO woulddetermine the interest payable under Section 234C, inaccordance with law. Hence, all the ITAs, except ITA Nos.23/2010and 88/2010, are rejected. ITA No.88/2010 is partlyallowed on the question of levy of interest underSection 234C. ITA No.23/2010 is remanded back forfresh consideration by the Tribunal. No costs. Sd/- K.VINOD CHANDRAN JUDGE Sd/- ASHOK MENON JUDGE ITAs3/2010 & conns. APPENDIX OF ITA 3/2010 APPELLANT'S EXHIBITS: ANNEXURE A TRUE COPY OF ORDER U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 DATED 28.01.2004. ANNEXURE BTRUE COPY OF ORDER U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 DATED 18.12.2006. ANNEXURE CTRUE COPY OF THE ORDER OF CIT(A)-I.T.A. NO. 96/R1/TCR/CIT-V/O3-04 DATED, 14.06.2004. ANNEXURE DTRUE COPY OF THE ORDER OF CIT(A)-I.T.A.NO.48/R1/TCR/CIT-V/06-07 DATED, 11.09.2007. ANNEXURE ECERTIFIED COPY OF THE ORDER OF ITAT I.T.A.NO.879/COCH/2004, I.T.A. NO.919/COCH/2007 AND I.T.A.NO.26/COCH/2008 30.06.2009 (COMPOSITE ORDER). [True Copy] jg ITAs3/2010 & conns. APPENDIX OF ITA 23/2010 APPELLANT'S/S EXHIBITS: [True Copy] jg ITAs3/2010 & conns. ITAs3/2010 & conns. APPENDIX OF ITA 58/2010 APPELLANT'S EXHIBITS: ANNEXURE ATRUE COPY OF ORDER U/S.143(3) R.W.S.147 DATED, 18.12.2006. ANNEXURE BTRUE COPY OF THE ORDER OF CIT(A)-ITA NO.50/R.1/TCR/CIT(A)-V/06-07 DATED, 29.10.2007. ANNEXURE CCERTIFIED COPY OF THE ORDER OF ITAT-ITA NO.131/COCH/2007 DATED, 06.08.2009. [True Copy] jg ITAs3/2010 & conns. -27 APPENDIX OF ITA 65/2010 APPELLANT'S EXHIBITS: ANNEXURE A TRUE COPY OF ORDER U/S.143(3)OF THE IT ACT DATED,28.03.2006 ANNEXURE BTRUE COPY OF THE ORDER OF CIT(A)-ITA 7/RI/TCR/CIT-V/06-07 DATED,19.03.2007 ANNEXURE CTRUE COPY OF THE ORDER OF ITAT-ITA NO.406/COCH/2007 DATED,06.08.2009. [True Copy] APPENDIX OF ITA 81/2010 [True Copy] jg ITAs3/2010 & conns. -29 APPENDIX OF ITA 82/2010 APPELLANT'S EXHIBITS: ANNEXURE A TRUE COPY OF ORDER U/S.143 OF THE IT ACT DATED 28.3.2006 AND ORDER U/S.154 DATED 18.1.2007 ANNEXURE B TRUE COPY OF THE ORDER OF CIT(A)-ITA 8/RI/TCR/CIT (A)-V/06-07 DATED 11.7.2007 ANNEXURE CTRUE COPY OF THE ORDER OF ITAT-ITA NO.854/COCH/2007 DATED 6.8.2009 [True Copy] jg ITAs3/2010 & conns. APPENDIX OF ITA 85/2010 APPELLANT'S EXHIBITS: ANNEXURE ATRUE COPY OF ORDER U/S.143 OF THE IT ACT DATED 28.3.2006 ANNEXURE BTRUE COPY OF THE ORDER OF CIT(A)-ITA 7/RI/TCR/CIT-V/06-07 DATED 19.3.2007 ANNEXURE CTRUE COPY OF THE ORDER OF ITAT-ITA NO.700/COCH/2007 DATED 6.8.2009 [True Copy] ITAs3/2010 & conns. APPENDIX OF ITA 88/2010 APPELLANT'S EXHIBITS: ANNEXURE A APPENDIX OF ITA 81/2010 [True Copy] jg ITAs3/2010 & conns. -29 APPENDIX OF ITA 82/2010 APPELLANT'S EXHIBITS: ANNEXURE A TRUE COPY OF ORDER U/S.143 OF THE IT ACT DATED 28.3.2006 AND ORDER U/S.154 DATED 18.1.2007 ANNEXURE B TRUE COPY OF THE ORDER OF CIT(A)-ITA 8/RI/TCR/CIT (A)-V/06-07 DATED 11.7.2007 ANNEXURE CTRUE COPY OF THE ORDER OF ITAT-ITA NO.854/COCH/2007 DATED 6.8.2009 [True Copy] jg ITAs3/2010 & conns. APPENDIX OF ITA 85/2010 APPELLANT'S EXHIBITS: ANNEXURE ATRUE COPY OF ORDER U/S.143 OF THE IT ACT DATED 28.3.2006 ANNEXURE BTRUE COPY OF THE ORDER OF CIT(A)-ITA 7/RI/TCR/CIT-V/06-07 DATED 19.3.2007 ANNEXURE CTRUE COPY OF THE ORDER OF ITAT-ITA NO.700/COCH/2007 DATED 6.8.2009 [True Copy] ITAs3/2010 & conns. APPENDIX OF ITA 88/2010 APPELLANT'S EXHIBITS: ANNEXURE A TRUE COPY OF ORDER U/S.143(3) R.W.S.147 DATED, 18/12/2006. ANNEXURE B TRUE COPY OF ORDER OF CIT (A)-ITA NO.49/R.1/TCR/CIT(A)-V/06-07 DATED, 29.10.2007 ANNEXURE C TRUE COPY OF THE ORDER OF ITAT-ITA NO.346/COCH/2007 DATED, 06/08/2009. [True Copy] jg ITAs3/2010 & conns. -32 APPENDIX OF ITA 97/2010 APPELLANT'S EXHIBITS: ANNEXURE-ATRUE COPY OF ORDER U/S.143(3)R.W.S.147 DATED 18/12/2006. ANNEXURE-BTRUE COPY OF THE ORDER OF CIT(A)-ITA NO.50/R.1/TCR(A)-V/06-07 DATED.29/10/2007 ANNEXURE-C TRUE COPY OF THE ORDER OF ITAT-ITA NO.345/COCH/2008 DATED, 6/8/2009. [True Copy] jg ITAs3/2010 & conns. APPENDIX OF ITA 100/2010 APPELLANT'S EXHIBITS: ANNEXURE ATRUE COPY OF ORDER U/S.143 (3) R.W.S.147 DATED 18.12.2006. ANNEXURE BTRUE COPY OF THE ORDER OF CIT (A)-ITA NO.49/R.1/TCR/CIT(A)-V/06-07 DATED 29.10.2007. ANNEXURE CTRUE COPY THE ORDER OF ITAT-ITA NO.132/COCH/2007 DATED,6.8.2009. [True Copy] jg ITAs3/2010 & conns. -34 APPENDIX OF ITA 104/2010 APPELLANT'S EXHIBITS: ANNEXURE A TRUE COPY OF ORDER U/S.143 OF THE IT ACT DATED 28.3.2006 AND ORDER U/S.154 DATED 18.1.2007 ANNEXURE B TRUE COPY OF THE ORDER OF CIT(A)-ITA 8/RI/TCR/CIT (A)-V/06-07 DATED 11.7.2007 ANNEXURE CTRUE COPY OF THE ORDER OF ITAT-ITA NO.812/COCH/2007 DATED 6.8.2009 [True Copy] jg