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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
PER OM PRAKASH KANT, AM
This appeal by the Revenue is directed against the order dated 26.02.2019 passed by the Ld. Commissioner of Income Tax (Appeals)-5, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2015-16, in respect of rectification order passed by the Ld.
State Bank of India 2 ITA No. 3036/M/2019 Assessing Officer. The The grounds raised by the Re grounds raised by the Revenue are reproduced as under: reproduced as under:
On the facts and the circumstances of the case and in On the facts and the circumstances of the case and in On the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the assessee’s law, the Ld. CIT(A) has erred in allowing the assessee’s law, the Ld. CIT(A) has erred in allowing the assessee’s plea that the interest income on securities has to be plea that the interest income on securities has to be plea that the interest income on securities has to be taxed on the due basis only without appreciating that as taxed on the due basis only without appreciating that as taxed on the due basis only without appreciating that as per the mercantile system of accounting followed by the r the mercantile system of accounting followed by the r the mercantile system of accounting followed by the assessee interest on securities has to be taxed on accrual assessee interest on securities has to be taxed on accrual assessee interest on securities has to be taxed on accrual basis.
Briefly stated, the facts of the case are that the assessee sought Briefly stated, the facts of the case are that the assessee sought Briefly stated, the facts of the case are that the assessee sought for rectification of interest income on the securities for rectification of interest income on the securities for rectification of interest income on the securities before the Assessing Officer. According to the assessee, the interest of . According to the assessee, the interest of . According to the assessee, the interest of securities was taxable on the due basis. The assessee worked out securities was taxable on the due basis. The assessee worked out securities was taxable on the due basis. The assessee worked out such interest amount o such interest amount on due basis to ₹1743,28,84,330/ 28,84,330/-. According to the Assessing Officer interest income on securities to the Assessing Officer interest income on securities to the Assessing Officer interest income on securities should be taxed on accrual basis amount taxed on accrual basis amount of which was worked out to was worked out to ₹1818,75,14,980/- by the assessee by the assessee. The assessee in the computation . The assessee in the computation to the return of income had already offered to the return of income had already offered to the return of income had already offered interest of ₹1743,28,84,330/- on due basis and therefore according to the on due basis and therefore according to the on due basis and therefore according to the State Bank of India 3 ITA No. 3036/M/2019 assessee, the Assessing Officer assessee, the Assessing Officer was not supposed to make addition supposed to make addition of same amount again while computing the assessed income. The same amount again while computing the assessed income. The same amount again while computing the assessed income. The assessee in the rectification application filed before assessee in the rectification application filed before assessee in the rectification application filed before the Ld. Assessing Officer submitted that though it had already offered Assessing Officer submitted that though it had already offered Assessing Officer submitted that though it had already offered addition of ₹1743,28,84,330/ 1743,28,84,330/- i.e. the amount on interest due, i.e. the amount on interest due, however, same was added added again in the assessment order in the assessment order, therefore, same should be reduced same should be reduced. The Ld. Assessing Officer accor . The Ld. Assessing Officer accordingly rectified assessment order rectified assessment order, but, he also made an addition for the addition for the difference of amount of difference of amount of interest securities on accrual basis interest securities on accrual basis and interest on due basis, interest on due basis, for net amount of ₹754,630,650/ 754,630,650/-.
Aggrieved, the assessee filed appeal before the Ld. CIT(A). The Aggrieved, the assessee filed appeal before the Ld. CIT(A Aggrieved, the assessee filed appeal before the Ld. CIT(A Ld. CIT(A) deleted the addition of interest on accrued basis Ld. CIT(A) deleted the addition of interest on accrued basis Ld. CIT(A) deleted the addition of interest on accrued basis following his finding in the appeal against the assessment order. The following his finding in the appeal against the assessment order. The following his finding in the appeal against the assessment order. The relevant finding of the Ld. CIT(A) is reproduced as under: relevant finding of the Ld. CIT(A) is reproduced as under: relevant finding of the Ld. CIT(A) is reproduced as under:
“7.3.1 During the course of appellate proceedings, the Ld. 7.3.1 During the course of appellate proceedings, the Ld. AR 7.3.1 During the course of appellate proceedings, the Ld. has has has submitted submitted submitted that that that the the the issue issue issue raised raised raised herein herein herein is is is similar/identical to the issue raised in order u/s 143(3) of similar/identical to the issue raised in order u/s 143(3) of similar/identical to the issue raised in order u/s 143(3) of State Bank of India 4 ITA No. 3036/M/2019 the Act and the decision taken therein may also be taken in the Act and the decision taken therein may also be taken in the Act and the decision taken therein may also be taken in this appeal. The contention of the appellant has been this appeal. The contention of the appellant has been this appeal. The contention of the appellant has been considered carefully. From recor considered carefully. From records, it is observed that while ds, it is observed that while disposing off the appeal against order u/s 143(3) of the Act disposing off the appeal against order u/s 143(3) of the Act disposing off the appeal against order u/s 143(3) of the Act for the assessment year under consideration, vide order for the assessment year under consideration, vide order for the assessment year under consideration, vide order dated 26.02.2019 in Appeal No.CIT(A) dated 26.02.2019 in Appeal No.CIT(A)-5/ACIT-2(2)(1)/IT 2(2)(1)/IT- 337/17-18 (ITBA Appeal No. CIT(A), Mumbai 18 (ITBA Appeal No. CIT(A), Mumbai-5/10399/17 5/10399/17- 18), the impugned issue of addition made on account of 8), the impugned issue of addition made on account of 8), the impugned issue of addition made on account of "Interest accrued but not due" has already been. decided in "Interest accrued but not due" has already been. decided in "Interest accrued but not due" has already been. decided in favour of the appellant and it has been held that interest on favour of the appellant and it has been held that interest on favour of the appellant and it has been held that interest on securities is to be taxed on due basis and not accrual basis. securities is to be taxed on due basis and not accrual basis. securities is to be taxed on due basis and not accrual basis. Since the issue un Since the issue under consideration remains same, so the Ld. der consideration remains same, so the Ld. AO is directed to revise the income as per decision given in AO is directed to revise the income as per decision given in AO is directed to revise the income as per decision given in above referred appellate order dated 26.02.2019 of the above referred appellate order dated 26.02.2019 of the above referred appellate order dated 26.02.2019 of the undersigned. Hence, the Ground No. 1 raised in appeal is undersigned. Hence, the Ground No. 1 raised in appeal is undersigned. Hence, the Ground No. 1 raised in appeal is decided accordingly, subject to above di decided accordingly, subject to above directions.”
Aggrieved, the Revenue is before the Tribunal raising the Aggrieved, the Revenue is before the Tribunal raising the Aggrieved, the Revenue is before the Tribunal raising the grounds as reproduced as above. grounds as reproduced as above.
We have heard the rival submissions of the parties on issue-in- We have heard the rival submissions of the parties on issue We have heard the rival submissions of the parties on issue dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that the Assessing Officer in the rectification order added the difference er in the rectification order added the difference er in the rectification order added the difference of the amount of the interest accrued on securities of the amount of the interest accrued on securities and and the interest which was due on such securities which was due on such securities, amounting to ₹ ₹754,630,650/-.
State Bank of India 5 ITA No. 3036/M/2019 The Ld. CIT(A) has already deleted the said addition following his The Ld. CIT(A) has already deleted the said addition following his The Ld. CIT(A) has already deleted the said addition following his finding in the appeal against the original assessment order. Before finding in the appeal against the original assessment order. Before finding in the appeal against the original assessment order. Before us, the Ld. Counsel of the assessee has submitted that the issue has us, the Ld. Counsel of the assessee has submitted that the issue has us, the Ld. Counsel of the assessee has submitted that the issue has already been decided decided in favour of the assessee by th in favour of the assessee by the order of the Hon’ble Bombay High Court. He referred to the decision of the Co Hon’ble Bombay High Court. He referred to the decision of the Co Hon’ble Bombay High Court. He referred to the decision of the Co- ordinate Bench in & 4951/M/2013, wherein taxation ordinate Bench in ITA Nos. 3685 & 4951/M/2013, wherein taxation ordinate Bench in ITA Nos. 3685 & 4951/M/2013, wherein taxation of interest on due basis has been upheld. The relevant finding of the of interest on due basis has been upheld. The relevant finding of the of interest on due basis has been upheld. The relevant finding of the decision of the Co-ordinate Bench is repro ordinate Bench is reproduced as under: duced as under:
The Ld. A.R. for the assessee brought the fact on record 52. The Ld. A.R. for the assessee brought the fact on record 52. The Ld. A.R. for the assessee brought the fact on record that this issue has also been decided in favour of the assessee that this issue has also been decided in favour of the assessee that this issue has also been decided in favour of the assessee in earlier years from A.Y. 1991 in earlier years from A.Y. 1991-92 to 2004-05 which has been 05 which has been upheld by the Hon’ble Bombay High Court. This fact has upheld by the Hon’ble Bombay High Court. This fact has not been controverted by the Ld. D.R. for the Revenue been controverted by the Ld. D.R. for the Revenue. 53 We have perused the order passed by the co 53 We have perused the order passed by the co-ordinate ordinate Bench of the Tribunal in assessee’s own case for A.Y. 2001 Bench of the Tribunal in assessee’s own case for A.Y. 2001 Bench of the Tribunal in assessee’s own case for A.Y. 2001-02 in which is on identical issues, the in ITA No.4656/M/2011 which is on identical issues, the in ITA No.4656/M/2011 which is on identical issues, the operative part of which is operative part of which is as under: “48. Ground no.2, raised by the Revenue is, the learned “48. Ground no.2, raised by the Revenue is, the learned “48. Ground no.2, raised by the Revenue is, the learned CIT(A) erred in allowing the taxing of interest on securities CIT(A) erred in allowing the taxing of interest on securities CIT(A) erred in allowing the taxing of interest on securities on due basis. 49. During the course of hearing, on a perusal on due basis. 49. During the course of hearing, on a perusal on due basis. 49. During the course of hearing, on a perusal of the record available before of the record available before -us, we find that identical issue us, we find that identical issue
State Bank of India 6 ITA No. 3036/M/2019 has been consistently decided in favour of the assessee and as been consistently decided in favour of the assessee and as been consistently decided in favour of the assessee and against the Revenue by the Tribunal in assessee's own case against the Revenue by the Tribunal in assessee's own case against the Revenue by the Tribunal in assessee's own case for the assessment year 1991 for the assessment year 1991-92, 1995-96, 1996-97, 1999 97, 1999- 2000, 2000-01 and 2008 01 and 2008-09. The Tribunal in assessee's own 09. The Tribunal in assessee's own case in State Bank of I case in State Bank of India v/s DCIT, & ndia v/s DCIT, ITA no.3644 & 4563/Mum/2016, order dated 3rd February 2020, for the 4563/Mum/2016, order dated 3rd February 2020, for the 4563/Mum/2016, order dated 3rd February 2020, for the A.Y. 2008-09, has decided this issue in favour of the assessee 09, has decided this issue in favour of the assessee 09, has decided this issue in favour of the assessee and against the Revenue. Consistent with the view taken by and against the Revenue. Consistent with the view taken by and against the Revenue. Consistent with the view taken by the Tribunal in assessee's own case as cited supra, the Tribunal in assessee's own case as cited supra, we uphold we uphold the order of the learned CIT(A) on this issue by dismissing the order of the learned CIT(A) on this issue by dismissing the order of the learned CIT(A) on this issue by dismissing the ground raised by the Revenue. The learned Counsel for the ground raised by the Revenue. The learned Counsel for the ground raised by the Revenue. The learned Counsel for the assessee also submitted before us that that the appeal the assessee also submitted before us that that the appeal the assessee also submitted before us that that the appeal filed by the Revenue in assessee's own case before the filed by the Revenue in assessee's own case before the filed by the Revenue in assessee's own case before the Hon'ble Jurisdictional High Court for the assessment year dictional High Court for the assessment year dictional High Court for the assessment year 97, the said appeal was also dismissed vide its order 1996-97, the said appeal was also dismissed vide its order 97, the said appeal was also dismissed vide its order dated 1st August 2016. Ground no. 2, raised by the Revenue dated 1st August 2016. Ground no. 2, raised by the Revenue dated 1st August 2016. Ground no. 2, raised by the Revenue is dismissed.”
Since the issue has already been set at rest by the co 54. Since the issue has already been set at rest by the co 54. Since the issue has already been set at rest by the co- ordinate Bench of ordinate Bench of the Tribunal which has been confirmed by the Tribunal which has been confirmed by the Hon’ble Bombay High Court for A.Y. 1996 the Hon’ble Bombay High Court for A.Y. 1996-97, we find no 97, we find no scope to interfere into the findings returned by the Ld. scope to interfere into the findings returned by the Ld. scope to interfere into the findings returned by the Ld. CIT(A). Hence, ground No.5 is also determined against the CIT(A). Hence, ground No.5 is also determined against the CIT(A). Hence, ground No.5 is also determined against the Revenue.”
5.1 As the issue of taxing of i As the issue of taxing of interest of securities on due basis is nterest of securities on due basis is settled in favour of the assessee and therefore following the decision settled in favour of the assessee and therefore following the decision settled in favour of the assessee and therefore following the decision
State Bank of India 7 ITA No. 3036/M/2019 of the Co-ordinate Bench (supra), we reject the contention of the ordinate Bench (supra), we reject the contention of the ordinate Bench (supra), we reject the contention of the Revenue. The ground raised by the Revenue is dismissed. . The ground raised by the Revenue is dismissed. . The ground raised by the Revenue is dismissed.
In the result, the ap In the result, the appeal filed by the Revenue is dismissed. peal filed by the Revenue is dismissed.