THE COMMISSIONER OF INCOME TAX, vs. THE CATHOLIC SYRIAN BANK LTD,

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ITA/237/2013HC KeralaKLHC01026122201310 April 2019Bench: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR.JUSTICE V.G.ARUN3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the question of whether the Tribunal was right in upholding the assessee's adoption of the Yield to Market Ratio (YTM) basis for valuing unquoted securities had to be answered in favour of the assessee and against the Revenue. The reasoning is based on a prior decision of a Division Bench of the same High Court in Commissioner of Income Tax v. Lord Krishna Bank Ltd. [(2011) 339 ITR 606 (Ker)], which dealt with a similar issue. The appeal is therefore dismissed.

What were the facts?

This appeal by the Revenue challenges an order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench, dated March 8, 2013. The assessment year in question is 2007-08. The assessee is The Catholic Syrian Bank Ltd. The dispute concerns the method adopted by the assessee for valuing unquoted securities. The Revenue is aggrieved by the ITAT's decision to uphold the assessee's valuation method. The High Court of Kerala is hearing this appeal.

What were the issues?

1. Whether the Tribunal was correct in upholding the assessee's adoption of the Yield to Market Ratio (YTM) basis for valuing unquoted securities, which is a question of law. The Revenue contends that the Tribunal erred in allowing the assessee's method of valuation. The Assessee, through the Tribunal's order, has had its valuation method upheld. The judgment specifically refers to a prior decision of the High Court in Commissioner of Income Tax v. Lord Krishna Bank Ltd. [(2011) 339 ITR 606 (Ker)] as being relevant to this issue.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR.JUSTICE V.G.ARUN WEDNESDAY, THE 10TH DAY OF APRIL 2019 / 20TH CHAITHRA, 1941 ITA.No. 237 of 2013 AGAINST THE ORDER/JUDGMENT IN ITA 541/2011 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 08-03-2013 APPELLANT/S: THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S: THE CATHOLIC SYRIAN BANK LTD, ST.MARY'S COLLEGE ROAD, TRICHUR-680 020. (PAN-AABCT0024D) BY ADVS. SRI.JOSEPH MARKOSE (SR.) SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS SRI.V.ABRAHAM MARKOS OTHER PRESENT: SRI.JOSEPH MARKOSE (SR.) SRI.ISAAC THOMAS, SRI JOSE JOSEPH SC THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 10.04.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA No.237/2013 2 J U D G M E N T Vinod Chandran, J. Only one question arises in the above appeal for the assessment year 2007-08 as to whether the Tribunal was right in having upheld the action of the assessee adopting the valuation of the unquoted securities on Yield to Market Ratio basis (Y.T.M). The valuation so carried out has been upheld by the Division Bench of this Court in Commissioner of Income Tax v. Lord Krishna Bank Ltd. [(2011) 339 ITR 606 (Ker). The question hence has to be answered in favour of the assessee and against the Revenue. The appeal would stand dismissed. Sd/- K. Vinod Chandran, Judge Sd/- V.G Arun, jma Judge

ITA No.237/2013 3 APPENDIX OF ITA 237/2013 PETITIONER'S/S EXHIBITS: ANNEXURE -A TRUE COPY OF THE CBDT CIRCULAR NO.662 DATED 05/10/1993. ANNEXURE-B GUIDELINES FOR CLASSIFICATION AND VALUATION OF INVESTMENTS BY BANKS ISSUED BY THE RESERVE BANK OF INDIA IN DBOD NO.BP.BC.32/21.04.048/2000-2001. ANNEXURE-C ASSESSMENT ORDER UNDER SECTION 143(3) DATED 17/11/2009. ANNEXURE-D TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL) DATED 02/06/2011. ANNEXURE-E TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 08/03/2013. ANNEXURE-F TRUE COPY OF THE HON'BLE HIGH COURT JUDGMENT IN ITA NO.38/2010 DATED 24/02/2011.

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