The Revenue By A Bench Of This Court In‘thecommissioner Of Income Tax & Anr v. Thekarnataka Bank Ltd.”Decided On 12.09.2017 Inita

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE / DAY OF SEPTEMBER 2020 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND| THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD L.T.A. NO.587/2013 BEI|WEEN 1.COMMISSIONER OF INCOME TAX) MANGALORE. 2.DEPUTY COMMISSIONER OF INCOME TAX) CIRCLE-1, UDUPI-576101. _.. APPELLANTS (BY SRI. E.I1. SANMATHI, ADV.) AND" M/S. SYNDICATE BANKCENTRAL ACCOUNTS DEPARTMENT|TAX CELL, HEAD OFFICEMANIPAL - 5/76 104. ... RESPONDENT (BY SRI. T. SURYANARAYANA, ADV.) THIS IJ§.T.A. IS FILED UNDER SECTION 260-A OI.L.T.ACT, 1961, ARISING OUT OF ORDER DATED 19-06-201PASSED IN ITA NO.709/B/2010 AND 669/B/2010, FOR THE:ASSESSMENT YEAR 2007-08, PRAYING TO: I. DECIDE THE FOREGOING QUESTION OF LAW AND/OR|SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED|BY THE HON’BLE COURT AS DEEMED FIT. Il. SET ASIDE THE APPELLATE ORDER DATED 19-06-2013|PASSED IN ITA NO.669/B/2010 AND I.T.A NO./709/B/2010BY THE INCOME TAX APPELLATE TRIBUNAL, “A. BENCH,BANGALORE. THIS I.T.A. COMING ON FOR HEARING, THIS DAY,ALOK ARADHE J.,DELIVERED THE FOLLOWING: JUDGMENT Mr.E.I1.Sanmatni, learned counsel for the revenue. Mr.T.Suryanarayana,learnedcounsel for.the|aSSeSSAE., 2. This appeal under Section 260-A of the Income|Tax Act, 1961 (hereinafter referred to as ‘the Act’, forshort) has been preferred by the revenue which wasadmitted by a Bench of this Court on 01.12.2014 toconsider the following substantial questions of law: T..“Whether.OP)thefactsand|circumstances of the case, the Tribunal Isrignt in law In allowing assessee’s claim onthe issue of accrued interest on securitiesamounting to Rs.295,47,10,034/- on the cash basis even though the assessee isfollowing mercantile system of accountingin respect of interest from securities for thepurpose of final accounts as per annualreport under the Companies Act but haddeviated and sought to reduce a sum ofRs.295,47,10,034/- as interest accrued butnot fallen due for the purpose of taxationUnder the Act’? ?_|“Whether.OP)thefactsand|circumstances of the case, the Tribunal Isright in law in allowing assessee’s claim ofwrite off bad debts relating to urbanbranches amounting to Rs.351,72,91,439/-without first setting off the bad debtsagainst the credit balance in the provisionof Bad and Doubtful Debts and withoutconsideringtheingredients.ofsection36(1)(vil) of the Act’? 3.“Whether.OP)thefactsand|circumstances of the case, the Tribunal Isright in law in holding that depreciation onvaluation|ofInvestmentportfolio.ISallowable by treating the investments heldby the assessee bank as_ stock-in-trade once the RBI Mester Circular read withCBDT Circular No.665 came into force”? q |“Whether on the facts and|circumstances of the case, the Tribunal Isright in law in holding that expenditureincurred by assessee towards issue ofbonds Is allowable under section 35D of theActeventhough|thenature ofSaldexpenditure is a capital expenditure and Isnot as revenue expenditure and moreoverwhen deduction under section 35D Is notavailable to Banks w.e.f.1/4/2009”? 5.|“Whether.OP)thefactsand|circumstances of the case, the Tribunal Isright in law In holding that provisions ofsection 115JB of the Act are not applicableto the assessee which is a_ bankingcompany without taking into considerationthatprovisionsofsectionLTI5JBExplanation (3) to section 115JB of the Actand as such recorded a perverse finding”? 3. When the matter was taken up today, learned|counsel for the parties submitted that the substantialquestion of law No.1 has already Deen answered against. the revenue by a Bench of this Court in‘THECOMMISSIONER OF INCOME TAX & ANR,. Vs. THEKARNATAKA BANK LTD.”decided on 12.09.2017 InITA No.433/2006 and connected matters. For the reasons assigned in the aforesaid order,|the substantial question of law No.1 is answered againstthe revenue and in favour of the assessee. 3. When the matter was taken up today, learned|counsel for the parties submitted that the substantialquestion of law No.1 has already Deen answered against. the revenue by a Bench of this Court in‘THECOMMISSIONER OF INCOME TAX & ANR,. Vs. THEKARNATAKA BANK LTD.”decided on 12.09.2017 InITA No.433/2006 and connected matters. For the reasons assigned in the aforesaid order,|the substantial question of law No.1 is answered againstthe revenue and in favour of the assessee. 4. It is also urged that the substantial question of law No.2 has already been answered against therevenueby|aBench|ofthisCourtIn|‘THECOMMISSIONER OF INCOME TAX & ANR. Vs. M/s.VIJAYABANK’decidedON)21.10.7014|InTTA.No.1066/2008. For the reasons assigned in the aforesaid order,|the substantial question of law No.2 is answered against.the revenue and in favour of the assessee.. 5. It is also pointed out that the substantial|question of law No.3 has already been answered against the revenue by a Bench of this Court in.‘KARNATAKABANK LTD. Vs. ASSISTANT COMMISSIONER OFINCOME-TAX,CIRCLE2(1)*|(2013)34TAXMANN.COM 150 (KAR) For the reasons assigned in the aforesaid order,|the substantial question of law No.3 is answered againstthe revenue and in favour of the assessee.. 6. It is also urged that the substantial question of law No.4 is covered by a decision of this Court in‘COMMISSIONER OF INCOME-TAX Vs. ITC HOTELSLTD.” (2010) 190 TAXMAN 430 (KAR). For the reasons assigned in the aforesaid order,|the substantial question of law No.4 is answered againstthe revenue and in favour of the assessee.. 7. It is also pointed out that the substantial|question of law No.5 is covered by a decision of thisCourt tn‘THE COMMISSIONER OF INCOME TAX Vs. ��'���������������������51������:��,'���)�018� 9:1179378�20337/<�8795878�:1��#���������� �1�347�/7<;63!�347�0@@706�5<�85<25<<78�� �%� ������������ �����������