The Karur Vysya Bank Limited Ltd. Erode Roadkarur 639 001Pan: Aaact3373J v. The Additional Commissioner Of Income Taxincome Tax Range – 1Tiruchirapalli

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 22.08.2025 CORAM : THE HONOURABLE MR. MANINDRA MOHAN SHRIVASTAVA, CHIEF JUSTICEAND THE HONOURABLE MR.JUSTICE SUNDER MOHAN TCA No.733 of 2016 The Karur Vysya Bank Limited Ltd. Erode RoadKarur 639 001PAN: AAACT3373J..Appellant Vs. The Additional Commissioner of Income TaxIncome Tax Range – 1Tiruchirapalli...Respondent Prayer : Appeal under Section 260A of the Income Tax Act, 1961 against the order dated 29.02.2016 passed in ITA No.1640/Mds/2014 on the file of Income Tax Appellate Tribunal, B Bench, Chennai. For Appellant :Mr.R.VenkatanarayanFor M/s. Subbaraya Aiyar Padmanabhan Ramamani For M/s. Subbaraya Aiyar Padmanabhan Ramamani For Respondent :Mr.J.NarayanasamySenior Standing Counsel ____________ Page 1 of 5 JUDGMENT (Judgment of the Court was delivered by the Hon'ble Chief Justice) The following questions of law have been framed by this Court while admitting this appeal: “(i) Whether the Tribunal was right in law in directing the Assessing Officer to work out the disallowance of expenses by applying Rule 8D(2)(iii) when the Assessing Officer himself has disallowed only 2% of the exempt income? (ii) Whether on the facts and in the circumstances of the case, in the assessee appeal the Tribunal can direct reworking of disallowance which will result in enhancement of assessed income? and (iii) Whether on the facts and in the circumstances of the case the Tribunal was right in holding that Rule 8D(2)(iii) would be applicable when the shares are held as stock in trade?” 2. At the outset, learned counsel for respondent would submit that similar issue had earlier arisen between the same parties in TCA Nos.509 to 511 of 2010. ____________ Page 2 of 5 TCA No.733 of 2016 3. In respect of assessment years 1996-97, 1997-98 and 1998-99, those appeals have been finally disposed of by this Court vide order dated 08.02.2022, placing reliance on the decision of the Supreme Court in the case of South Indian Bank Ltd. v. Commissioner of Income Tax [(2021) 130 taxmann.com 178 (SC)]. 4. Learned counsel for appellant would submit that this Court only clarified that upon remand, as ordered by appellate Tribunal, the Assessing Officer shall pass fresh order strictly in accordance with Supreme Court verdict in South Indian Bank Ltd. 5. In the light of the order passed by this Court on 08.02.2022 in TCA Nos.509 to 511 of 2010, as between the present assessee and the revenue, this petition is disposed of upholding the order of remand by the Tribunal, with a direction to Assessing Officer to decide the issue, upon remand, strictly in accordance with law laid down by the Supreme Court in the case of South Indian Bank Ltd. ____________ Page 3 of 5 6. Appeal is, accordingly, disposed. All other issues are left open for consideration by Assessing Officer. There shall be no order as to costs. (MANINDRA MOHAN SHRIVASTAVA, CJ) (SUNDER MOHAN,J) 22.08.2025 Index: Yes/NoNeutral Citation :Yes/No kpl To 1. The Assistant Registrar Income Tax Appellate Tribunal Chennai. 2. The Additional Commissioner of Income Tax Income Tax Range – 1 Tiruchirapalli. ____________ Page 4 of 5 ____________ Page 5 of 5 TCA No.733 of 2016 THE HON'BLE CHIEF JUSTICE AND SUNDER MOHAN,J. (kpl) TCA No.733 of 2016 22.08.2025