ASSISTANT COMMISSIONER OF INCOME TAX 2(3)(2), MUMBAI vs. KOTAK MAHINDRA BANK LIMITED, MUMBAI

The ld CIT(A) granted relief to the assessee by following the order of his predecessor in appeal for AY 2010-11date 04.02.2013, for AY 2011-12 dated 20.08.2013 and AY 2012-13 dated 19.01.2016. We have further noted that coordinate bench of the Tribunal while deciding the appeal for AY 2010-11, 2011-12 and 2012-13 in Kotak Mahindra Bank Vs DCIT in ITA(s) No. 1657, 1929/M/12, 3491, 3592, 3593, 6394, 6217/M/2013 & in DCIT Vs Kotak Mahindra Bank Ltd & 38/M/18 confirmed the action of ld CIT(A). The Tribunal while confirming the order of ld CIT(A) followed the decisions of Hon’ble Supreme Court in Catholic Syrian Bank Ltd vs CIT 343 ITR 270(SC) and in CIT vs. Karnataka Bank Ltd 349 ITR 705 order passed by ld CIT(A), which we affirms. In the result this ground of appeal is dismissed.

1. "On the facts and In the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the disallowance under rule 8D(2)(ii) ignoring the facts brought out in the assessment order that expenses of Rs.504.53 Crores were attributable to earning of exempt income.

2. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO to compute the disallowance under rule 8D(2)(iii) on the insvestment excluding investment of Rs.385.05 crores as on 31.03.2O13 and Rs.459.19 crores as on 31.O3.2O14 and investment in Foreign company as on O1.O4.2O13 at Rs.33,31 lakhs and as on 31.O3.2O13 at Rs.33.31 lakhs relying on the decision of the Hon'ble ITAT in the case of Garware Wall Ropes Ltd. (65 SOT 83) without appreciating the fact that the decision of Hon'ble ITA T has not been accepted by the department and appeal has been admitted by the Hon'ble High Court.

3. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in holding that the broken period interest is allowable on the matching principles, without realizing that the same has not been incurred for realizing the interest on securities as enunciated by the Apex court in Vijaya Bank Ltd. (57 Taxman 152) (SC).

4. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO to allow expenditure incurred on ESOP, after verification in accordance with the principle laid down by Hon'ble Special Bench in the case of Biocon Ltd. (368/Bang/2010) without appreciating that the same is not an ascertained liability, contingent in 20 Kotak Mahindra Bank Ltd nature, quantum cannot be worked out precisely and is capital in nature and hence not allowable.” 25. We have seen that all the grounds of appeal raised in this appeal are identical as raised in appeal for assessment year 2013-14. Therefore, following the principles of consistency, the decision arrived at therein shall apply mutatis mutandis to this appeal also.

Order pronounced in the open court on 27-08-2019.