ACIT CIRCLE ,3(4), MUMBAI, MUMBAI vs. UNION BANK OF INDIA, MUMBAI

ITA 2119/MUM/2024Status: DisposedITAT Mumbai11 June 2025AY 2020-2140 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

On the issue of disallowance under Section 14A read with Rule 8D, the Tribunal, respectfully following the decision of a coordinate bench in the assessee's own case for AY 2016-17, held that no disallowance is warranted when exempt income is earned on shares/stocks held as 'stock-in-trade'. The Tribunal directed the Assessing Officer (AO) to delete the disallowance. This led to the allowance of Ground No. 1 in the assessee's appeal and dismissal of the corresponding ground in the revenue's appeal. Regarding the taxability of recovery of bad debts, the Tribunal, by respectfully following a coordinate bench decision in the assessee's own case for AY 2013-14, declined to interfere with the deletion of the disallowance by the CIT(A). Thus, Ground No. 2 was dismissed. Concerning the disallowance of amortisation of premium paid on securities in the HTM category, the Tribunal, respectfully following a coordinate bench decision in the assessee's own case in ITA No. 1819/Mum/2023, declined to interfere with the CIT(A)'s decision. Ground No. 4 was dismissed. For the issue of deletion of disallowance under Section 14A r.w. Rule 8D in computing book profit, the Tribunal noted that since it had held that the provisions of Section 115JB did not apply, this grievance became infructuous. For AY 2020-21, the appeal of the revenue was dismissed. For AY 2021-22, the appeal of the assessee was partly allowed, and the appeal of the revenue was dismissed.

What were the facts?

The appeals before the Tribunal were cross-appeals filed by the assessee, Union Bank of India, and the revenue against the orders of the National Faceless Appellate Authority (NFAC), Delhi, for Assessment Years (AY) 2020-21 and 2021-22. The appeals involved common issues. The assessee's appeals were ITA Nos. 2037/Mum/2024 and 2038/Mum/2024, while the revenue's appeals were ITA Nos. 2119/Mum/2024 and 2118/Mum/2024. The matters were heard together. The primary issues revolved around disallowances made under Section 14A read with Rule 8D, taxability of recovery of bad debts, and amortization of premium paid on securities.

What were the issues?

1. Whether the Tribunal was correct in holding that no disallowance under Section 14A read with Rule 8D of the Income Tax Act, 1961, is warranted where the assessee has earned exempt income on shares/stocks held as 'stock-in-trade'? The assessee contended that since the shares/bonds on which tax-free income was earned were held as 'stock-in-trade', it constituted a business activity, and therefore, no disallowance under Section 14A was applicable, citing the Supreme Court's decision in Maxopp Investment Pvt. Ltd. The revenue's contentions are not explicitly recorded for this issue. 2. Whether the Tribunal was correct in holding that the recovery of bad debts written off, for which deduction was allowed under Section 36(1)(viia), is taxable? The assessee argued that such recoveries are not taxable, relying on a coordinate bench decision in its own case for AY 2013-14. The revenue's contentions are not explicitly recorded. 3. Whether the Tribunal was correct in deleting the disallowance made by the Assessing Officer towards broken period interest? The assessee relied on the jurisdictional High Court's decision in CIT Vs. HDFC Bank Ltd. and the Supreme Court's decision in CIT Vs. Citi Bank. The revenue relied on the contrary view of the Rajasthan High Court in CIT Vs. Bank of Rajasthan Ltd.

Which sections of the Income-tax Act were involved?

Section 14A,Section 36(1)(viia),Section 115JB

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(22)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Heard together (4 matters)

ITA No. 2037/MUM/2024
ITA No. 2038/MUM/2024
ITA No. 2119/MUM/2024
ITA No. 2118/MUM/2024

Read from the judgment's own cause title. This page is filed under one of them.

आयकर अपीलीय न्यायाधिकरण न्यायपीठ, मुंबई IN THE INCOME-TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 2037/MUM/2024 (निर्धारण वर्ष / Assessment Year :2020-21) आयकर अपील सं./ITA No. 2038/MUM/2024 (निर्धारण वर्ष / Assessment Year :2021-22)

Union Bank of India, Finance & Accounts, Union Bank Bhavan, 239, Vidhan Bhavan Marg, Nariman Point, Mumbai, Maharashtra- 400021 v/s. बनाम DCIT, Circle- (LTU) 2, Mumbai Room No. 421, 4th Floor, Aayakar Bhavan, M. K.

Road, Mumbai-400020 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAACU0564G Appellant/अपीलार्थी .. Respondent/प्रतिवादी आयकर अपील सं./ITA No. 2119/MUM/2024 (निर्धारण वर्ष / Assessment Year :2020-21) आयकर अपील सं./ITA No. 2118/MUM/2024 (निर्धारण वर्ष / Assessment Year :2021-22) ACIT, Circle-3(4), Mumbai Room No. 559, 5th Floor, Aayakar Bhavan, M. K.

Road, Mumbai-400020 v/s.

Union Bank of India, Finance & Accounts, Union बनाम Bank Bhavan, 239, Vidhan Bhavan Marg, Nariman Point, Mumbai, Maharashtra- 400021 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAACU0564G Appellant/अपीलार्थी .. Respondent/प्रतिवादी Page 2 ITA Nos.2037, 2119, 2038 & 2118/Mum/2

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 14A

All 15,875 judgments and leading authorities on Section 14A →

Recent GST High Court judgments

Search GST case law →