Pr. Commissioner Of Income Tax -3, Mumbai v. M/S. Export Import Bank Of India

IN THE HIGH COURT OF JUDICATURE AT BOMBAYO.O.C.J. INCOME TAX APPEAL NO. 1240 OF 2016 Pr. Commissioner of Income Tax -3, Mumbai ..Appellant Versus M/s. Export Import Bank of India..Respondent ................... Mr. Sham Walve for the Appellant Mr. Sham Walve for the Appellant Ms. A. Vissanji a/w Mr. Shrihari Iyer for the RespondentMs. A. Vissanji a/w Mr. Shrihari Iyer for the Respondent ................... CORAM : AKIL KURESHI & SARANG V. KOTWAL, JJ. DATE : MARCH 11, 2019. P.C.: 1.Revenue is in the appeal against the judgment of the Income Tax Appellate Tribunal ("the Tribunal" for short) raising following questions for our consideration: “(i) Whether on facts and in the circumstances of the caseand in law, the Tribunal was justified in restricting theexemption u/S. 10(23G) at Rs. 7,49,79,538/- as againstat Rs. 17,80,83,520/- without appreciating the fact that itcannot be allowed on gross basis and that the cost ofinterest on fund borrowed for funding its client should bereduced thereby to allow the exemption on net basisonly?and in law, the Tribunal was justified in restricting theexemption u/S. 10(23G) at Rs. 7,49,79,538/- as againstat Rs. 17,80,83,520/- without appreciating the fact that itcannot be allowed on gross basis and that the cost ofinterest on fund borrowed for funding its client should bereduced thereby to allow the exemption on net basisonly? (ii) Whether on facts and in the circumstances of the caseand in law, the Tribunal was justified in allowing theand in law, the Tribunal was justified in allowing the exemption claimed at Rs. 2,13,03,240/ u/s. 10(34) of theAct without appreciating the fact that what is exempt u/s.10(34) is only an income and not the gross receipt andtherefore, expenses incurred for earning such exemptincome has to be deducted from the gross dividentearned? (iii) Whether on facts and in the circumstances of the caseand in law, the Tribunal was justified in allowing penalinterest and interest on non-performing assets (NPA) upto 31.3.1999 without appreciating the fact that theprovisions of Section 43D are applicable on the facts ofthe case and also decision of Hon. Supreme Court in thecase of UCO Bank Ltd Vs. CIT [237 ITR 889] is alsodirectly applicable on the facts of this case?and in law, the Tribunal was justified in allowing penalinterest and interest on non-performing assets (NPA) upto 31.3.1999 without appreciating the fact that theprovisions of Section 43D are applicable on the facts ofthe case and also decision of Hon. Supreme Court in thecase of UCO Bank Ltd Vs. CIT [237 ITR 889] is alsodirectly applicable on the facts of this case? (iv) Whether, on facts in the circumstances of the case and inlaw, the Tribual was justified in upholding the decision ofthe Ld. CIT(A) in allowing depreciating of Rs.6,82,99,443/- by adopting WDV of AY 1999-2000?"law, the Tribual was justified in upholding the decision ofthe Ld. CIT(A) in allowing depreciating of Rs.6,82,99,443/- by adopting WDV of AY 1999-2000?" 2.First three questions had come up before us in IncomeTax Appeal No. 1090 of 2014 and connected appeals in caseof this very assessee where by a detail order, we haverejected the Revenue's appeal. Without recording separatereasons, these questions are not considered. 3.The sole surviving question relates to the assessee'sclaim of depreciation. The income of the assessee in the (iv) Whether, on facts in the circumstances of the case and inlaw, the Tribual was justified in upholding the decision ofthe Ld. CIT(A) in allowing depreciating of Rs.6,82,99,443/- by adopting WDV of AY 1999-2000?"law, the Tribual was justified in upholding the decision ofthe Ld. CIT(A) in allowing depreciating of Rs.6,82,99,443/- by adopting WDV of AY 1999-2000?" 2.First three questions had come up before us in IncomeTax Appeal No. 1090 of 2014 and connected appeals in caseof this very assessee where by a detail order, we haverejected the Revenue's appeal. Without recording separatereasons, these questions are not considered. 3.The sole surviving question relates to the assessee'sclaim of depreciation. The income of the assessee in the earlier assessment years was not taxable. The assessee hadtherefore not claimed depreciation on its assets. In thecurrent year, the assessee claimed depreciation with fullvalue of acquisition. The Revenue argued that suchdepreciation would be available on notional written downvalue. The CIT(A) held that the depreciation was neitherclaimed nor granted in the earlier years and therefore, theassessee would receive depreciation on the full value. TheTribunal in further appeal by the Revenue noted that similarquestion had arisen in the earlier years in which the Revenuehad not challenged the order of the CIT(A). On the ground ofconsistency, therefore the Tribunal did not entertain such aquestion. 4.We find that in the earlier year, not on low tax effect but consciously the Revenue had accepted the view point ofCIT(A). Without there being any material change in law orfacts, the Tribunal correctly did not permitted the Revenue toagitate such a question in current year. 5.In view of the above, the appeal is dismissed. [ SARANG V. KOTWAL, J. ] [ AKIL KURESHI, J ]