THE COMMISSIONER OF INCOME TAX,TRICHUR vs. THE SOUTH INDIAN BANK LTD,TRICHUR.

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ITA/570/2009HC KeralaKLHC01025331200912 December 2018Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR. JUSTICE ASHOK MENON6 pages
AI SummaryDismissed

What did the High Court hold?

In ITA 570/2009, the High Court held that the issue regarding amortization of loss on sale of current investment was covered against the revenue and in favour of the assessee by this Court's decision in I.T.A No.946/2009 dated 09.10.2009. Regarding Section 14A, the Court followed the Supreme Court's decision in Commissioner of Income Tax v. Essar Teleholdings Ltd., [(2018) 401 ITR 445], which held that Section 14A can only be applied from assessment year 2007-08. Thus, both issues were answered against the revenue. In ITA 1116/2009, the Court refused to answer the question of law concerning the remand made by the Tribunal, as the Assessing Officer was only asked to reconsider the issue. On the applicability of Section 14A, the Court again followed Essar Teleholdings Ltd., answering the question against the revenue and in favour of the assessee. Consequently, both appeals were rejected.

What were the facts?

These two appeals, ITA No. 570 of 2009 and ITA No. 1116 of 2009, were filed by the Commissioner of Income Tax, Trichur, against orders of the Income Tax Appellate Tribunal (ITAT), Cochin Bench. ITA 570/2009 pertains to assessment year 1996-97 and ITA 1116/2009 to assessment year 2004-05. The respondent in both appeals is The South Indian Bank Ltd. The appeals challenge decisions of the ITAT that were against the revenue. The procedural history involves appeals being filed before the High Court of Kerala after the ITAT had passed its orders.

What were the issues?

The High Court of Kerala had to decide the following questions of law: 1. In ITA 570/2009: (a) Whether the loss caused on the sale of current investment is eligible for amortization, and (b) Whether Section 14A of the Income Tax Act, 1961, is applicable. The revenue contended that the ITAT's findings on these issues were incorrect. 2. In ITA 1116/2009: (a) Whether Section 14A of the Income Tax Act, 1961, is applicable, and (b) The validity of a remand made by the Tribunal concerning a particular issue. The revenue argued against the Tribunal's conclusions on these points. The assessee's arguments are not explicitly recorded, but the judgment indicates the issues were decided in its favour.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON WEDNESDAY,THE 12TH DAY OF DECEMBER 2018 / 21ST AGRAHAYANA, 1940 ITA.No. 570 of 2009 AGAINST THE ORDER/JUDGMENT IN ITA 127/2004 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 19-09-2005 APPELLANT/S: THE COMMISSIONER OF INCOME TAX,TRICHUR BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH SC FOR INCOME TAX RESPONDENT/S: THE SOUTH INDIAN BANK LTD,TRICHUR. TRICHUR. BY ADV. SRI.P.BALAKRISHNAN (E) OTHER PRESENT: SRI PKR MENON SR COUNSEL FOR GOI TAXES, SRI JOSE JOSEPH SC THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 12.12.2018, ALONG WITH ITA.1116/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA No.570/2009&1116/2009 ::2:: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON WEDNESDAY,THE 12TH DAY OF DECEMBER 2018 / 21ST AGRAHAYANA, 1940 ITA.No. 1116 of 2009 AGAINST THE ORDER/JUDGMENT IN ITA 360/2006 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 27-09-2007 APPELLANT/S: 1 THE COMMISSIONER OF INCOME TAX. THRISSUR. 2 THE COMMISSIONER OF INCOME TAX, AGED 1 YEARS THRISSUR BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH SC FOR INCOME TAX RESPONDENT/S: 1 M/S. THE SOUTH INDIAN BANK LTD. MISSION QUARTERS, THRISSUR. 2 M/S. THE SOUTH INDIAN BANK LTD, MISSION QUARTERS, THRISSUR. BY ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 12.12.2018, ALONG WITH ITA.570/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA No.570/2009&1116/2009 ::3:: ITA No.570/2009 & 1116/2009

J U D G M E N T Vinod Chandran, J The two appeals arise from the assessment year 1996-97 and 2004-05. ITA 570/2009 raises two questions both of which are covered against the revenue. The first issue is on amortization of loss caused on sale of current investment . The same is covered by the decision of this Court in I.T.A No.946/2009 dated 09.10.2009 against the Revenue and in favour of the assessee. The further question is on the application of Section 14A which is covered by the decision of the Hon'ble Supreme Court reported in Commissioner of Income Tax v. Essar Teleholdings Ltd., [(2018) 401 ITR 445] also answered against the Revenue and in favour of the assessee. The Hon'ble Supreme Court found that the application of section 14A can be only from the assessment year 2007-08. ITA 570/2009 would stand rejected.

2.

ITA No.116/2009 also raises two questions; one on Section 14A and the other on the remand made by the Tribunal with respect to a particular issue. On the issue of remand we refuse to answer the question of law since the Assessing Officer has only been asked to reconsider the issue. On Section 14A, we again follow Essar Teleholdings Ltd., to answer the question against the revenue and in favour of the assessee. ITA No.1116/2009 would therefore stand rejected. No order as to costs. K. Vinod Chandran, Judge Ashok Menon, jma Judge

Appendix — schedule of exhibits
APPENDIX OF ITA 570/2009 PETITIONER'S/S EXHIBITS: ANNEXURE A: TRUE COPY OF THE ORDER OF THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S.147 OF THE I.T.ACT DATED 28.03.2002. ANNEXURE B: TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN ITA NO.9/R1/TCR/CIT-V/02-03 DATED 05.11.2003. ANNEXURE C: TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLANT TRIBUNAL IN I.T.A. NO.127/COCH/2004 DATED 26.09.2005. ITA No.570/2009&1116/2009 ::6:: APPENDIX OF ITA 1116/2009 PETITIONER'S/S EXHIBITS: ANNEXURE A TRUE COPY OF THE ORDER OF THE ASSESSING OFFICER U/S. 143(3) DATED 15-12-2005 ANNEXURE B TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN ITA 68/R.1/TCR/CIT V/05.06 DATED 17-03- 2006 ANNEXURE C TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL IN ITA 360(COCH)/2006 DATED 27-09-2007

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