Together v. For The Aforesaid Reasons The Appeal Has No Merit And Is

kps IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.177 OF 2012 The Director of Income Tax(International Taxation). ..Appellant -Versus-Bank of America NT and SA...Respondent ........... Mr.Arvind Pinto a/w Mr.Suresh Kumar and Ms.Padma Divakar, for the Appellant.Mr.P.J.Pardiwalla, Senior Advocate with Ms.Vasanti B. Patel, for the Respondent. ........... CORAM: S.C. DHARMADHIKARIAND B.P. COLABAWALLA, JJ. DATE :- 03[rd] July, 2014 P.C.: 1After having heard Mr.Pinto, learned counsel appearing for the Revenue, at some length and perusing with his assistance the order passed by the Income Tax Appellate Tribunal dated 27.04.2011 we are of the opinion that the questions of law projected as substantial are not capable of being entertained at all. 2The Tribunal has on the first question refused to assist the Revenue by remanding the proceedings back to the Assessing Officer. If the Tribunal had the authority and had directed the Assessing Officer to allow the claim for deduction of expenses simply because bifurcation or deployment of funds by the Bank concerned in India or at Branches in India or abroad had not been provided throughout, then, the remand cannot be directed to rectify the defects or to get over the lacunas in the proceedings initiated by the Assessing Officer. Precisely that has been done in the present case and the Tribunal's refusal to remand the proceedings, therefore, does not raise a substantial question of law. 3Even with regard to the question No.2 we do not find that it is a substantial question of law. The Tribunal found that the Assessee Bank received interest on refund of taxes paid. It also paid interest on the taxes which were payable. The Assessee sought to set off the interest paid against the interest received and offered the net interest received to tax. We do not see that such findings of the Tribunal are vitiated in law. All that the Tribunal has done earlier and now is that in the case of this Assessee simply because the exercise carried out by it does not result in loss of revenue and there could not be any prohibition for the same, allowed it. That is how the Assessing Officer's order is set aside. We do not see how any larger controversy or question arises for our consideration. Mr.Pinto would refer to Section 57 of the Income Tax Act, 1961 in that regard and submit that this course would be adopted by other Assessees as well and in that event the order passed by this Court would come in the way of the Revenue in investigating and probing such exercise by other Assessees. 4We do not see how this order can be cited as precedent inasmuch as the Assessee before the Tribunal and before us paid interest to the Income Tax Department amounting to Rs.10,26,906/-. The Assessee claimed that this was business expenditure and this should have been allowed. The Assessee has received the interest of Rs.1,07,57,930/-. It was submitted that the amount of interest paid by the Assessee should have been allowed to be set off against the interest deposited with the Department and taxed in the hands of the Assessee. The argument was that the interest paid to and received from is the same party i.e. Government of India and therefore, both transactions should be taken together. 5We do not find that the Tribunal has, in permitting this exercise, in any way violated any of the provisions of the Income Tax Act, 1961. It was a peculiar situation between the Assessee and the Department. The Tribunal has followed the similar exercise in the case of very Assessee on the prior occasion as well. In such circumstances we are of the opinion that the second question also does not raise any substantial question of law. together. 5We do not find that the Tribunal has, in permitting this exercise, in any way violated any of the provisions of the Income Tax Act, 1961. It was a peculiar situation between the Assessee and the Department. The Tribunal has followed the similar exercise in the case of very Assessee on the prior occasion as well. In such circumstances we are of the opinion that the second question also does not raise any substantial question of law. 6As regard the third question, the order passed by the Tribunal and treating the securities as stock in trade instead of investment follows the exercise carried out for prior assessment years. In that regard the Tribunal in the order under challenge and particularly in paragraphs 47 and 49 referred to an order passed in the case of the Assessee for the Assessment Years 1990-1991 and 1991-1992. In the case of this very Assessee the order passed during the prior assessment year has not been reversed or interfered with by this Court. Similarly, Mr.Pardiwalla has handed over to us a copy of the judgment of this Court in the case of Commissioner of Income Tax v/s Bank of Baroda reported in (2003) 262ITR 334. The identical issue and which has been decided by the Tribunal is dealt with by this Court. It follows the judgment of the Honourable Supreme Court in the case of United Commercial Bank v/s Commissioner of Income Tax reported in (1999) 240 ITR 355 (SC). We are, therefore, of the opinion that even the findings on this question do not raise any substantial question of law. 7For the aforesaid reasons the Appeal has no merit and is dismissed. No costs. (B.P. COLABAWALLA, J.) (S.C. DHARMADHIKARI, J.)