Itxa/860/2012 Of Commissioner Of Income Tax - 2 v. Hdfc Bank Ltd.,(Successor To Business Of Centurion Bank Ltd.)

sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.860 OF 2012 The Commissioner of Income Tax-2, Mumbai ..Appellant. V/s. HDFC Bank Ltd. ..Respondent. Mr.Suresh Kumar for the Appellant. Mr.J.D.Mistri, Senior Advocate i/b. Mr.Atul Jasani for the respondent. CORAM : S.C.DHARMADHIKARI AND A.K. MENON, JJ. DATED :24TH SEPTEMBER, 2014 P.C. :- 1.This appeal under section 260A of the Income Tax Act, 1961 (the I.T. Act) is filed by the department challenging an order passed by the Income Tax Appellate Tribunal, Mumbai in two sets of cross appeals for assessment years 2006-07 and 2007-08. The Respondent-assessee bank had questioned the disallowance made by the assessing officer under section 14A of the I.T. Act read with Rule 8D of the Income Tax Rules, 1962. The revenue also has raised certain issue. The appeal filed by the assessee was allowed, whereas the appeal filed by the revenue was dismissed vide order dated 21[st ]February, 2012. 2.Mr.Suresh Kumar, learned counsel appearing for the appellant-revenue submitted that the impugned order raises the following substantial questions of law:- A.Whether on the facts and in the circumstances of the case and in law, the ITAT was correct in law in setting aside the disallowance made u/s.14A by relying on the decision of the Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. V/s. DCIT (2010), 328 ITR 081 (Bom), when the department has not accepted the principles laid own by the said decision as evidenced by the SLP filed ?law, the ITAT was correct in law in setting aside the disallowance made u/s.14A by relying on the decision of the Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. V/s. DCIT (2010), 328 ITR 081 (Bom), when the department has not accepted the principles laid own by the said decision as evidenced by the SLP filed ? B.Whether on the facts and in the circumstances of the case and in law, the ITAT was correct in law by relying on the decision of the Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. V/s. DCIT (2010), 328 ITR 081 (Bom), wherein operation of Rule 8D was made prospective, disregarding the fact that method of working of disallowance provided in Rule 8D has been accepted as a reasonable method in the same judgment ?law, the ITAT was correct in law by relying on the decision of the Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. V/s. DCIT (2010), 328 ITR 081 (Bom), wherein operation of Rule 8D was made prospective, disregarding the fact that method of working of disallowance provided in Rule 8D has been accepted as a reasonable method in the same judgment ? C.Whether on the facts and in the circumstances of the case and in law, the ITAT was correct in holding that the assessee is entitled for deduction with respect to the diminution in value of the law, the ITAT was correct in holding that the assessee is entitled for deduction with respect to the diminution in value of the itxa860-12 investment and amortization of premium on investment held to maturity on the ground of mandate by RBI guidelines thereby ignoring the decision of the Supreme Court in the case of Southern Technologies V/s. CIT [320 ITR 577] ? 2.The issues raised by the appellant concerned the investment by the assessee certain amounts in tax free securities from its own funds. A similar issue had arisen in Income Tax Appeal No.330 of 2012 in the case of the same assessee and after considering all these questions, this Court vide order dated 23[rd] July, 2014 to which one of us (S.C.Dharmadhikari, J.) was a party, did not find any merit in the appeal. No substantial question of law was found to have arisen. Since the facts of this case are similar to the above case, no question of law would arise that would justify interference by this Court with the order passed by the Tribunal. The appeal is, therefore, dismissed. No order as to costs. 2.The issues raised by the appellant concerned the investment by the assessee certain amounts in tax free securities from its own funds. A similar issue had arisen in Income Tax Appeal No.330 of 2012 in the case of the same assessee and after considering all these questions, this Court vide order dated 23[rd] July, 2014 to which one of us (S.C.Dharmadhikari, J.) was a party, did not find any merit in the appeal. No substantial question of law was found to have arisen. Since the facts of this case are similar to the above case, no question of law would arise that would justify interference by this Court with the order passed by the Tribunal. The appeal is, therefore, dismissed. No order as to costs. (A.K. MENON, J.) (S.C.DHARMADHIKARI, J.)