Ita/97/2020 Of The Commissioner Of Income Tax v. M/S. Syndicate Bank

Digitally signed byANUSHA VLocation: HIGHCOURT OFKARNATAKA IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7 DAY OF FEBRUARY, 2023 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR INCOME TAX APPEAL NO. 97 OF 2020A/WINCOME TAX APPEAL NO. 98 OF 2020 I.T.A No. 97 OF 2020 BETWEEN: 1. THE COMMISSIONER OF INCOME TAX LTU, 7 FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU – 560 095. LTU, 7 FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU – 560 095. 2.THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1 UDUPI OF INCOME-TAX, CIRCLE-1 UDUPI PRESENT ADDRESS DCIT, CIRCLE-1, LTU 7 FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA 7 FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU - 560 095. …APPELLANTS (BY SHRI. DILIP, STANDING COUNSEL FOR SHRI. K.V. ARAVIND, SENIOR STANDING COUNSEL) SHRI. K.V. ARAVIND, SENIOR STANDING COUNSEL) AND: M/s. SYNDICATE BANK CENTRAL ACCOUNTS DEPARTMENT TAX CELL, HEAD OFFICE MANIPAL PAN: AACCS 4699E …RESPONDENT (BY Ms. MANASA ANANTHAN, ADVOCATE) . . . . THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED: 23/01/2020 PASSED IN ITA NO. 100/PAN/2017, FOR THE ASSESSMENT YEAR: 2012-2013, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL, SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 100/PAN/2017 DATED: 23.01.2020 FOR ASSESSMENT YEAR: 2012-2013 ANNEXURE – C, CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE – 1, LTU, BENGALURU AND ETC. I.T.A No. 98 OF 2020 BETWEEN: 1. THE COMMISSIONER OF INCOME TAX LTU, 7 FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU – 560 095. LTU, 7 FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU – 560 095. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1 UDUPI PRESENT ADDRESS DCIT, CIRCLE-1, LTU 7 FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU – 560 095 …APPELLANTS (BY SHRI. DILIP, STANDING COUNSEL FOR SHRI. K.V. ARAVIND, SENIOR STANDING COUNSEL) SHRI. K.V. ARAVIND, SENIOR STANDING COUNSEL) AND : M/s. SYNDICATE BANK CENTRAL ACCOUNTS DEPARTMENT TAX CELL, HEAD OFFICE MANIPAL. PAN: AACCS 4699E …RESPONDENT (BY Ms. MANASA ANANTHAN, ADVOCATE) . . . . THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT, 1961, ARISING OUT OF ORDER DATED: 23/01/2020 PASSED IN ITA NO.99/PAN/2017, FOR THE ASSESSMENT YEAR: 2011-2012, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL, SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.99/PAN/2017 DATED: 23.01.2020 FOR ASSESSMENT YEAR: 2011-2012, ANNEXURE – C, CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE – 1, LTU, BENGALURU AND ETC. THESE ITAs, COMING ON FOR FINAL HEARING, THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING: JUDGMENT These two appeals have been admitted to consider following questions of law: 1.Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside disallowance of claim of loss on revaluation of securities even when the Assessing Authority rightly rejected the said claim as the assessee had failed to establish the said claim? case, the Tribunal is right in law in setting aside disallowance of claim of loss on revaluation of securities even when the Assessing Authority rightly rejected the said claim as the assessee had failed to establish the said claim? THESE ITAs, COMING ON FOR FINAL HEARING, THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING: JUDGMENT These two appeals have been admitted to consider following questions of law: 1.Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside disallowance of claim of loss on revaluation of securities even when the Assessing Authority rightly rejected the said claim as the assessee had failed to establish the said claim? case, the Tribunal is right in law in setting aside disallowance of claim of loss on revaluation of securities even when the Assessing Authority rightly rejected the said claim as the assessee had failed to establish the said claim? 2.Whether on the facts and in the circumstances of the case, the Tribunal is right in law in restoring the issue of disallowance of Section 14A claim to the file of Assessing Authority when the Assessing Authority had made disallowance in accordance with parameters of Section 14A of the Act? case, the Tribunal is right in law in restoring the issue of disallowance of Section 14A claim to the file of Assessing Authority when the Assessing Authority had made disallowance in accordance with parameters of Section 14A of the Act? 3.Whether on the facts and in the circumstance of the case, the Tribunal is right in law in holding that Section 115JB is not applicable to assessee – Bank when the conditions for invoking Section 115 JB of the Act are fully satisfied in respect of assessee – Bank and also for the reason that assessee is a Company? the Tribunal is right in law in holding that Section 115JB is not applicable to assessee – Bank when the conditions for invoking Section 115 JB of the Act are fully satisfied in respect of assessee – Bank and also for the reason that assessee is a Company? 4.Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside disallowance of interest accrued but not due to securities when the assessee is following mercantile sytem of accounting which stipulates that all accrued income to be considered in the year it had accrued and ame has nothing to do with the date when the interest income actually becomes due or receivable? case, the Tribunal is right in law in setting aside disallowance of interest accrued but not due to securities when the assessee is following mercantile sytem of accounting which stipulates that all accrued income to be considered in the year it had accrued and ame has nothing to do with the date when the interest income actually becomes due or receivable? 5.Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside disallowance made under Section 40(a)(ia) of the Act in respect of payment of Rs.78.21 Crores to M/s. NFS & Cash Tree by holding that same cannot be termed as brokerage/commission when Assessing Authority rightly disallowed the same since conditions for invoking Section 195H and 40(a)(ia) are fully satisfied to make disallowance under said Section? case, the Tribunal is right in law in setting aside disallowance made under Section 40(a)(ia) of the Act in respect of payment of Rs.78.21 Crores to M/s. NFS & Cash Tree by holding that same cannot be termed as brokerage/commission when Assessing Authority rightly disallowed the same since conditions for invoking Section 195H and 40(a)(ia) are fully satisfied to make disallowance under said Section? 2. As prayed for by learned Advocates on both sides, these two appeals are heard together and disposed of by this common order. 2. As prayed for by learned Advocates on both sides, these two appeals are heard together and disposed of by this common order. 3. Ms. Manasa Ananthan, learned Advocate for the assessee submits that the first question is covered by the decision against the Revenue in Karnataka Bank Ltd., Vs. Assistant Commissioner of Income-tax, Circle 2(1)[1]; the second question does not arise for consideration; the third and fourth questions are covered against the Revenue by the decision in The Commissioner of Income Tax Vs. The Karnataka Bank Ltd.[2]; and the fifth question is covered against the Revenue by the decision in Commissioner of Income Tax Vs. Corporation Bank[3]. 4. Her submission is not disputed by Shri. M. Dilip, learned Standing Counsel for the Revenue in his usual fairness. 1 [2013] 356 ITR 549 (Karnataka) 2 I.T.A. No.433/2006 and connected appeals Decided on September 12, 2012 Decided on September 12, 2012 3 [2021] 123 taxmann.com 204 (Karnataka) 5. In view of the above, the following: (a)Appeals are dismissed. (b)Questions No.1, 3, 4 and 5 are answered in favour of the assessee and against the Revenue. No costs. Sd/- JUDGE Sd/- JUDGE