ACIT, JAIPUR vs. STATE BANK OF BIKANER & JAIPUR, JAIPUR

PER BENCH

Out of bunch of 21 Appeals, these two Cross Appeals one by the Assessee

i.e. ITA No. 280/JP/2009 & other by the Revenue’s appeal in ITA No.

438/JP/2009 pertaining to the Assessment Year 2006-07 are directed against the

order of the Commissioner of Income Tax (Appeals)-II, Jaipur, dated - 27/03/2009.

Since the appeals were heard together, therefore, are being disposed off by way of

consolidated order for the sake of brevity.

2 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. 280/JP/2009 & 438/JP/2009

No. 280/JP/2009 & 438/JP/2009.

280/JP/2009 (Assessee).

Assessee’s appeal in ITA No. 280/JP/2009, the assessee has raised the following

grounds of appeal:-

“1. (i) Under the facts and circumstances of the case Ld. Commissioner of Income Tax (Appeals) has erred in upholding the applicability of the provision of Section 14A and thereby upholding the disallowance of proportionate interest and estimated administrative expenditure of the banking business.

(ii) Under the facts and circumstances of the case Ld. Commissioner of Income Tax (Appeals) has erred in quantifying the disallowance u/s 14A at the sum of Rs. 17,50,00,000/-.

(iii) Under the facts and circumstances of the case Ld. Commissioner of Income Tax (Appeals) has further erred in calculating the amount u/s 14A in terms of provisions of Rule 8D. He has also erred in applying these provisions of Rule 8D for the year under consideration as the same have been introduced on 24.03.2008.

3(i) Under the facts and circumstances of the case Ld. Commissioner of Income-tax (Appeals) has erred in confirming the disallowance of prior period expenses of Rs. 35,916/-. He has further erred in not directing the AO to allow this claim in the preceding respective Assessment Years.

(ii) Under the facts and circumstances of the case Ld. Commissioner of Income-tax (Appeals) has also erred in not allowing the relief in respect of disallowance of alleged prior period rent expenses of Rs. 33,34,245/-.

3 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. 5. The appropriate cost be awarded to the assessee.”

assessment and the assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter

referred to as the Act) was framed vide order dated 20/02/2008. While framing the

assessment the Assessing Officer made various additions on account of taking

interest of tax-free debenture on accrual basis of Rs. 14,55,068/-, disallowance out

of interest claimed exempt u/s 10(23G) of the Act of Rs. 3,87,30,043/-, disallowance

made by invoking the provision of Section 14A of Rs. 12,92,57,568/-, disallowance of

depreciation on securities- for valuing as per global method of Rs. 7,21,74,918/-,

disallowance of amortization claim on securities held in HTM of Rs. 111,81,75,752/-,

disallowance of prior period expenses of Rs. 33,70,161/-, capital receipts treated as

income of Rs. 47,33,34,127/-. Aggrieved by this order, the assessee preferred an

appeal before Ld. CIT(A), who after considering the submissions partly allowed the

appeal. While partly allowing the appeal the Ld. CIT(A) deleted the addition made on

account of interest on accrual basis. Ld. CIT(A) confirmed the addition made on

account of disallowance of exemption claim of Rs. 3,87,30,043/- made u/s 10(23G)

of the Act. The Ld. CIT(A) has further enhanced the disallowance made u/s 14A

from Rs. 12,92,57,568/- to Rs. 17,50,00,000/- the Ld. CIT(A) deleted the addition

made on account of disallowance of depreciation on securities on global method of

Rs. 7,21,74,918/-.

3.1 Further the Ld. CIT(A) confirmed the addition of Rs. 111,81,75,752/- made on

account of amortization of premium, however, the Ld. CIT(A) restricted the

disallowance in respect of prior period expenses of Rs. 35,916/- out of total

disallowance of Rs. 33,70,161/-. The Ld. CIT also confirmed the addition made on

4 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. account of capital receipts of Rs. 47,33,34,127/-. Against this order, both Revenue

and Assessee are in appeal. In this appeal, the assessee has challenged correctness

of action of Ld. CIT(A) for confirming the additions made by the AO.

disallowance of expenditure made by invoking the provisions of section 14A.

4.1 Apropos to ground no. 1, Ld. Counsel for the assessee vehemently argued

that the authorities below were not justified in invoking the provision of Section 14A.

4.2 Ld. Counsel submitted that Ld. CIT(A) has grossly erred in applying the

provisions of Rule 8D. He contended that the Rule 8D, for the Income Tax Rule,

1962, became applicable only w.e.f. Assessment Year 2008-09 as held by Hon’ble

Bombay High Court in the case of Godrej & Boyce Manufacturing Co. Ltd.

Vs. DCIT 328 ITR 81.

He further submitted that, in present case, the assessee had made advances of Rs.

191.24 crores from which exempted interest income of Rs. 21.52 crores is earned.

Further, the assessee made investment of Rs. 146.46 crores which yielded tax free

interest of Rs. 1.19 crores. Further, investment of Rs. 188.29 crores yielded

dividend income of Rs. 5.03 crores but profit on sale of such investment is taxable.

Thus, the total investment which yielded exempt income as well as taxable income is

Rs. 525.99 crores. He submitted that there is no relationship of borrowed funds for

making such investment. In fact, this investment is made by the assessee out of

interest free funds aggregating to Rs. 1,405.65 crores comprising of Share Capital of

Rs. 50.00 crores and Reserves and Surplus of Rs. 1,355.65 crores. Thus, when

interest free funds far exceeds the investment which has yielded exempted income

and there is no finding of the AO that borrowed fund has been used in making such

5 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. investment, no disallowance of interest expenditure is called for. He submitted that

under the identical facts the Hon’ble Jurisdictional High Court in the case of assessee

pertaining to the Assessment Years 2000-01 to 2003-04 had deleted the

disallowance. He further submitted that investment in debentures, bonds, mutual

funds and shares which has yielded exempt income constitute stock in trade of the

assessee. On sale of such stock, business income is assessed in the hands of the

assessee. The assessee has not retained these investments with the intentions of

earning exempt income rather the exempt income is incidental to the business of

sale of shares/securities. Therefore, it cannot be said that expenditure incurred

while acquiring these investments has to be apportioned to the extent of dividend

income and that should be disallowed from deduction.

4.3 Ld. Counsel for the assessee has placed reliance on the Judgment of the

Hon’ble Punjab & Haryana High Court in case of PCIT vs. State Bank of

Patiala 98 CCH 35. Ld. Counsel for the assessee placed reliance on the decision of

the Co-ordinate Bench of this Tribunal in the case of Fiduiciary Shares and Stock Pvt.

Ltd. vs. AIT 159 ITD 554 to buttress the contentions that the shares held as stock in

trade should be excluded for the purpose of computing disallowance u/s 14A of the

Act, since they could not be said to be “investment” made for the purpose of earning

dividend income. Further, reliance is placed on Judgment of the Hon’ble the

Karnataka High Court in the case of CCI Ltd. vs. JCIT 71 DTR 141/206 Taxman 563

to buttress the contention that provision of Section 14A is not applicable to the

expenses incurred by the assessee in course of its business of share dealing merely

because assessee is also having dividend income. He submitted that in view of

6 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. these decisions the disallowance as made by invoking the provision of Section 14A

may be deleted.

4.4 On the contrary, Ld. Departmental Representatives opposed the submissions

and supported the order of the authorities below. Ld. D/R submitted that the

Assessing Officer has given a finding on fact that the assessee has earned exempt

income to the tune of Rs, 23,72,13,375/-. The assessee has incurred interest

expenditure of Rs. 9,72,87,83,151/- and in earned interest of Rs. 19,65,78,03,553/-.

Therefore it cannot be assumed that the assessee has not incurred any expenditure

for earning such exempt income. Ld. D/R therefore submitted that Ld. CIT(A) was

therefore justified in making the disallowance u/s 14A. Ld. D/R submitted that the

disallowance has to be on some basis and rule 8D prescribes certainly the basis of

disallowance, for the expenditure related to the income not forming part of total

income.

4.5 We have heard the rival contentions, perused the material available on record

and gone through the order of the authorities below. We find that Ld. CIT(A) has

made disallowance by computing as per Rule 8D of the Income Tax Rules 1962. In

our view, the Ld. CIT(A) was not justified in computing the disallowance as per rule

8D, as the Rule 8D became operational from the A.Y. 2008-09. Further, there is not

dispute with regard to the fact that similar disallowances were made u/s 14A in the

assessment year 2000-01, 2002-03 and 2003-04 and the matter traveled up to the

Hon’ble Rajasthan High Court. The Hon’ble High court in DB Income Tax Appeal

Nos. 172/2008, 119/2010, 141/2010 and 142/2010 was pleased to held that in view

of the decision of the Hon’ble Supreme Court in the case of Godrej Boyce

Manufacturing Company Ltd. vs. DCIT. The order of disallowance was reversed.

7 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. The facts are identical in the present year and also there is no change into facts and

circumstances. As the assessee bank is having sufficient interest free funds which

has been accepted by both the authorities below. Therefore, respectfully following

the Judgment of the Hon’ble Jurisdictional High Court, we hereby direct the AO to

delete the disallowance. Thus, this ground of assessee’s appeal is allowed.

by the Assessing Officer treating the transfer of amount of unreconciled outstanding

entries originated upto 31.3.1999.

5.1 Ld. Counsel for the assessee reiterated the submissions as made in the

written submissions. Ld. Counsel submitted that the R.B.I. vide its letter dated

19/12/2005 directed the assessee to transfer the net credit balance of unreconciled

entries originated upto 31.3.1999 in the inter branch accounts to General Reserves.

The Assessing Officer treated the amount of Rs. 47,33,34,127/- as income of the

assessee chargeable to tax. The Ld. CIT(A) confirmed the addition by relying upon

the judgment of the Hon’ble Supreme Court rendered in the case of CIT vs. T.V.

Sundaram Iyengar & Sons 222 ITR 344. The Ld. Counsel submitted that the three

important aspect about transfer of reconciled entries in the inter branch accounts.

One, the assessee is to maintain complete details, the second; the assessee does

not have any right to forfeit the amount. It has to honor any claim in this respect

and the third, the amount so transferred cannot be distributed as dividend. This

amount can be utilized only for meeting the claims in respect of these unreconciled

entries.

5.2 Ld. Counsel submitted that no event has taken place during the year except

passing of the entries in the books of accounts, which by itself cannot make any

8 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. liability as income unless covered by the provisions of section 41(1). Ld. Counsel for

the assessee submitted that Ld. CIT(A) wrongly applied the ratio of the CIT Vs. T.V.

Sundaram Iyangar & Sons Ltd. 222 ITR 344, as in that case the assessee has

received deposits in the course of its business which were originally treated as

capital receipts and some of the deposits were neither claimed by nor returned to

the depositor. Ld. Counsel submitted that in that case the amount became the

assessee’s own money because of limitation or by any other statutory or contractual

right. In the present case, the assessee holds money in trustee capacity. It has not

got any right to forfeit the money nor it becomes assessee’s own money so as to

give it a right to utilize the same for it purpose. Since, the money is held by the

assessee in trustee capacity, the liability does not become barred by limitation. Ld.

Counsel further submitted that the Ld. CIT(A) himself accepted that it is not a case

failing u/s 41(1). Thus, section 41(1) is not applicable.

5.3 Ld. Counsel further placed reliance on the following cases:-

CIT vs. Shoorji Vallabhdas & Co. 46 ITR 144(SC),

CIT Vs. Mogul Line Ltd. 46 ITR 590 (Bom),

Kedarnath Jute Manuf. Co. Ltd. Vs. CIT 82 ITR 363 (SC),

CIT Vs. Industrial Credit & Development Syndicate Ltd. 284 ITR 310

(Karnataka)(HC)

5.4 Ld. Counsel submitted that the ratio laid down in those cases it can be

noticed that the amount credited to the Profit and Loss Account and thereafter

appropriated to General Reserves is not the income of the assessee as it does not

have any right over it to use/utilize. Ld. Counsel further placed reliance on the

9 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. decision of the Co-ordinate Bench rendered in the case of Punjab National Bank in

ITA No. 2047/Del/2007 & 2873/Del/2007.

5.5 On the contrary, Ld. D/R opposed the submissions and submitted that

whether this reconciliation represents the income would not depend on, how the

assessee has treated the same. The assessee has not demonstrated what is the

character of these reconciliation entries? Whether these were deposits or not if such

entries were not claimed by the account holder certainly such receipts would be the

income of the bank.

5.6 We have heard the rival contentions, perused the material available on record

and gone through the order of the authorities below. Ld. Counsel for the assessee

was not in a position to assist the bench with regard to exact character of the

reconciled entries. He submitted that this reconciliation entries cannot be treated as

income of the bank even if it is presumed that this money belonging to the

depositors. The submissions of the assessee is not supported by any evidence

demonstrating that the amount credited in the accounts of the assessee bank would

be paid to the concerned account holder or alternatively such entries pertain to its

own funds. In our considered view, it was incumbent upon the assessee’s bank to

demonstrate the nature of reconciliation entries in the absence of the same, the

order of the AO cannot be disturbed. Accordingly, this ground of the assessee’s

appeal is rejected.

6.1 Ld. Counsel for the assessee reiterated the submissions as made in the

written submissions. The submissions of the Ld. Counsel for the assessee are

reproduced as under:-

10 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. “Facts:-

i) Rent of office buildings of Rs.33,34,245/-

ii) Audit Fees Rs.27,100/-

iii) Overtime expenses Rs. 8,816/-

Submission:-

11 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. Branch Explanation S. Amount (in No. Rs.) 1. C-Scheme, 6,36,000 Rent of the branch premise was increased to Rs.95,000/- from Jaipur Rs.42,000/- per month w.e.f 01.04.2004 vide letter dated 16.12.2004 with the condition that the increased rent shall be paid only when the landlord would get the premise renovated. Since the renovation was done in the year under consideration, therefore, the increased rent @ Rs.53,000/- p.m., i.e. Rs.6,36,000/- is paid during the year (PB 53-56). Thus, the liability of payment of increased rent crystallized during in the year and therefore, it is not a prior period expenditure. 2. 7,47,132 This amount was paid for the period 01.04.2000 to 31.03.2005 Nehru Place, New Delhi after the settlement is made with the landlords of these premises in pursuance to the order of the Delhi High Court dt.19.01.2005 where they directed the assessee to vacate the premises (PB 57-63). Thus, the liability crystallized during the year and it is not a prior period expenditure. 3. MR Jodhpur 6,29,920 Amount pertains to the arrear of rent of Rs.4,010/- from period April-1989 to March-2005 being sanctioned by the bank’s committee in January, 06 i.e. in the year under consideration. Since the arrear of rent was approved during the year under consideration only therefore the liability to payment was crystallized in this year itself (PB 64-67). Hence, the expenditure is not prior period and same is allowable. 4. 5,81,768 The amount pertains to the assessee’s share of arrear of N.S. Road, Kolkata Corporation Tax and surcharge on the rented premises for the period 01.04.2003 to 31.03.2005 demanded by the landlord of the premises in the year under consideration only on the demand of Kolkata Municipal Corporation. Since the amount was demanded by the Municipal Corporation and the landlord during the year under consideration, therefore, the liability of payment crystallized during the year and the same is not a period expense (PB 68-71). 5. Barielly 2,57,659 Amount pertains to the arrear of lease rent of the bank premises for the period 14.02.2002 to 31.03.2005. The amount was charged to expense during the year under consideration since the lease deed was executed during the year consideration only. (PB 72-73). Hence the liability for expenditure is crystallized during the year under consideration only, therefore, same is not prior period expenditure.

12 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. 6. Shaharanpur 1,72,237 The amount is the arrear of rent of branch premises for the period September’2000 to March’2005 being paid on the order of Addl. District Judge, Shahranpur dated 10.01.2005. The amount was finally sanctioned by the Bank’s authority during the year under consideration only. The liability for payment thus crystallized during the year and therefore, same is not prior period expense (PB 74-75). 7. T P Kanpur 97,200 Amount pertains to the arrear of increase rent for period 15.12.1999 to 31.03.2005. The permission for the execution of the lease deed for higher rent was granted during the year under consideration only, therefore, the liability for payment crystallized in the year under consideration. Hence, the expenditure is not prior period (PB 76-81). 8. Machind 50,520 Amount pertains to the arrear of increased rent by Rs.4,035/- for 01.04.2004 to 31.03.2005. The lease deed for the increased rental was executed during the year under consideration, therefore, the liability for payment crystallized in the year under consideration. Hence, the expenditure is not prior period (PB 82). 9. Sheo 49,000 Amount pertains to the arrear of increased rent as the lease deed for the increased rental was executed during the year under consideration, therefore, liability for payment crystallized in the year under consideration. Hence, the same is not prior period (PB 83-84). 10 Ahore 43,821 Amount does not pertains to the prior period rent expenses rather it is sum total of various petty expenses on account of stationery, newspaper, conveyance etc. which has wrongly classified by the auditors as prior period rent. Details are enclosed at PB 85-86. Since other expenses of similar nature were allowed by the AO, therefore, same be allowed. 11. Balotra 33,988 Amount pertains to the arrear of increased rent as the lease deed for the increased rental was executed during the year under consideration, therefore, liability for payment crystallized in the year under consideration. Hence, the expenditure is not prior period (PB 87-90). 12. Raniwara 15,000 Amount pertains to the rent of ATM Room for the year 2005- 06. Since the lease deed for the same was executed in January, 06, therefore, the liability for payment crystallized in the year under consideration. Hence, the expenditure is not prior period

13 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. (PB 91-94). 13. Ramdeora 9,000 Amount pertains to the arrear of increased rent of ATM premise @ Rs.1,500 per month for the period 01.10.2004 to 31.03.2005. Since the increased rent was sanctioned during the year under consideration only, therefore, the liability for payment crystallized in the year under consideration. Hence, the expenditure is not prior period (PB 95-96). 14 Jhiri 8,000 There was leakage in the rented premises due to which rent of the premises from Nov, 04 to Feb, 05 was withheld by the assessee. Later on approval amount was paid in the year under consideration. Being the approval was sanctioned in the year under consideration, therefore, the amount is not a prior period expense (PB Pg.97-99). 15 Phalsoond 3,000 Rent pertains to the previous year for which sanction was granted in AY 2005-06, hence, the same is not prior period expense. Total 33,34,245

From the above table it can be noted that the liability for payment of rent crystallized during the year itself and therefore, the same is not a prior period expenses. The Ld. CIT(A) even after examining all these evidences, which were already before the AO, has directed him to verify the available evidences instead of directing him to allow the same. Hence, the order of Ld. CIT(A) to this extent is erroneous and the AO be directed to allow the expenditure claimed by the assessee.

14 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. (PB 105-107) and therefore, the same is allowable in the year under consideration.

6.2 Ld. Departmental Representatives opposed the submissions, and supported

the Assessment Order.

6.3 We have heard the rival contentions, perused the material available on record

and gone through the order of the authorities below.

6.4 Ld. CIT(A) has decided this issue in para 8.3 of his order that reads as

under:-

“8.3 I have considered facts of the case and arguments taken by Sh. Jhanwar and Sh. Parwal quite carefully. It is seen that predominantly this disallowance refers to rent of office building of Rs. 33,34,245/- which was pertaining to earlier period. However, it has to be appreciated that increase in the rent as per rent agreement and therefore, the banker was in a position to ascertain the liability related to rent increase which could have been provided in the relevant accounting year to which it pertains. AO is therefore,

15 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. directed to verify the available evidence and if the liability for the same was not ascertainable in earlier amounting year and has crystallized only in the accounting year relevant to present A.Y. then only such deduction has to be allowed. I agree with AO that over time expenses claim of Rs. 8,816/- and audit fee claim of Rs. 27,100/- which was pertaining to earlier year was ascertainable in relevant accounting year and since no such evidence could have been given that liability for the same has been crystallized only in the accounting year relevant to present assessment year and therefore, such disallowance of Rs. 35,916/- is confirmed and for rest of the claim the same is allowable subject to aforesaid verification keeping in view the available evidence.”

6.5 The contention of the assessee is that the expenditure relates to payment of

rent and the authorities below failed to appreciate the fact that this payment was

made on the basis of either the rent was increased in the year under consideration

or in pursuance of the order of the courts.

In our view, where the payment is made by the order of the court or increased by

the agreement in the year under consideration that expenditure certainly crystallized

in the year under consideration. Therefore, in view of the material placed in the

paper book, we are of the view that Ld. CIT(A) ought not to have restored this issue

to the file of the AO for verification as the evidence placed are sufficient to infer that

these liabilities related to rent crystallized in the year under appeal. Therefore, we

hereby direct the AO to allow the expenditure. Hence, this ground no. 3(i) is

allowed. Ground no. 3 (ii) relates to expenditure of audit fees and over time

expenses in our view the Ld. CIT(A) rightly disallowed the same as such expenditure

16 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. related to the earlier years and duly crystallized during that year. This ground of the

assessee’s appeal is rejected.

the present case the parties to bear the respective cost. This ground of the

assessee’s appeal is dismissed.

ITA No. 438/JP/2009 (Revenue)

Assessment Year 2006-07.

The Revenue has raised the following grounds of appeal:-

“On the facts and in the circumstances of the cases and in law the Ld. CIT(A) has erred in:-

the appeal are squarely covered in the favour of the assessee by the Judgments of

17 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. Hon’ble Jurisdictional High Court relating to earlier years. Ld. D/R supported the

order of the authorities below.

securities has to be included in the income on due basis.

12.1 Ld. D/R supported the order of the Assessing Officer.

12.2 On the contrary, Ld. Counsel for the assessee supported the order of the Ld.

CIT(A) and submitted that the issue is squarely covered in favour of the assessee by

the decision of the Hon’ble Jurisdictional High court, in assessee’s own case

pertaining to A.Y. 1997-98 to 2000-01 and 2004-05.

12.3 We have heard the rival contentions of the parties. The undisputed facts is

that the issue has been decided in favour of the assessee by the Hon’ble High Court

of Rajasthan in Appeals pertaining to the Assessment Year 1997-98 to 2000-01 &

2004-05 is not controverted by the Revenue. Ld. Counsel has invited our attention to

the Judgment of Hon’ble High Court rendered in D.B. Income Tax Appeal No.

185/2014. Therefore, we do not see any reason to interfere into the finding of the

Ld. CIT(A) same is hereby affirmed. This ground of Revenue’s appeal is rejected.

the AO on account of disallowance of deduction claimed for interest on tax free

debenture on due basis.

13.1 Ld. D/R supported the order of the AO and submitted that Ld. CIT(A) was not

justified in deleting the addition.

13.2 However, Ld. Counsel for the assessee submitted that this issue is covered in

the favour of the assessee by the earlier decision of the Tribunal and order of the

Tribunal confirmed by the Hon’ble Rajasthan High Court.

18 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. 13.3 We have heard the rival contentions, perused the material available on

record. The Hon’ble Rajasthan High court in assessee’s own case in DB Income Tax

Appeal No. 185/2014 formulated the substantial question of law whether on facts

and circumstances of the case, the ITAT was justified in deleting the addition of Rs.

4,56,60,998/- made by the AO by taking the interest income by Government and

other securities on accrual basis instead of due basis as claimed by the assessee.

Admittedly, this question is answered against the Revenue. Therefore, we do not

see any reason to interfere into the finding of the Ld. CIT(A), same is hereby

affirmed. Thus, Ground no.2 of the appeal is dismissed.

the AO on account of valuation of investment by adopting global method of

valuation of securities a against category wise method of valuation followed by the

assessee.

14.1 Ld. D/R supported the order of the authorities below.

14.2 On the contrary, Ld. Counsel for the assessee supported the order of the Ld.

CIT(A) and submitted that issue is covered by the decision of the Hon’ble High Court

in assessee’s own case.

14.3 We have heard the rival contentions, perused the material available on

record. The Ld. CIT(A) by following its earlier years pertaining to the AY 2005-06

deleted the addition. We find that this issue was also decided by the Hon’ble

Rajasthan High court in the assessee own case in DB Income Tax Appeal No.

27/2015 in favour of the assessee. Therefore, we do not see any reason to interfere

into the finding of the Ld. CIT(A), same is hereby affirmed. This ground of

Revenue’s appeal is dismissed.

19 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. 15. Ground no. 4, is against deleting the addition of Rs. 1,11,81,75,752/- made

by the AO on account of disallowance of amortization in respect of permanent

diminution in the value of securities held by the Bank under the “Head of Maturity”

category”.

15.1 Ld. D/R supported the order of the AO and submitted that Ld. CIT(A) was not

justified in deleting the addition.

15.2 On the contrary, Ld. Counsel for the assessee submitted that similar addition

was made in the AY 2005-06, the Hon’ble Rajasthan High Court in D.B. Income Tax

Appeal No. 27/2015, decided the issue in favour of the assesse. The contention of

the assessee is not controverted by the Revenue and has also not brought to our

notice any other contrary binding precedent. Therefore, we do not see any reason

to interfere into the finding of the Ld. CIT(A), same is hereby affirmed. This ground

of Revenue’s appeal is dismissed.

is partly allowed & Revenue’s Appeal in ITA No. 438/JP/2009 is dismissed. Order pronounced in the open court Tuesday, the 29th day of August 2017.

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20 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur. 4. The CIT, 5. The DR, ITAT, Jaipur 6. Guard File (ITA No. 280/JP/2009 & 438/JP/2009)

vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

21 ITA No. 280/JP/2009 & 438/JP/2009. State Bank of Bikaner & Jaipur, Jaipur.