ASST. COMMISSIONER OF INCOME TAX vs. BANK OF BARODA

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ITA/132/2024HC KarnatakaKAHC01021656202410 September 2025Bench: S.G.PANDIT,K. V. ARAVIND4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal, holding that the substantial questions of law raised were already decided by a co-ordinate bench in a similar case involving Vijaya Bank. The court followed its previous decision.

What were the facts?

The Revenue appealed against an ITAT order allowing the assessee bank's claim for depreciation on 'held to maturity' (HTM) investments. The Revenue argued that depreciation is not allowable on HTM securities as they are not affected by market fluctuations.

What were the issues?

Whether depreciation is allowable on 'held to maturity' investments by banks, and if the ITAT was justified in allowing such a claim despite the investments not being affected by market appreciation or depreciation.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:35787-DB ITA No. 132 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE K. V. ARAVIND INCOME TAX APPEAL NO. 132 OF 2024 BETWEEN:

ASST. COMMISSIONER OF INCOME TAX MUMBAI-2, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400 020. …APPELLANT (BY SRI. E.I. SANMATHI, SR. STANDING COUNSEL)

AND:

BANK OF BARODA (ERSTWHILE VIJAYA BANK) 7TH FLOOR, CENTRAL ACCOUNTS, DEPT. 41/2, M.G. ROAD, BENGALURU 560001 (REP. BY ITS MANAGER). …RESPONDENT

THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 25/04/2023 PASSED IN ITA NO. 528/BANG/2019, FOR THE ASSESSMENT YEAR 2015-16 (ANNEXURE-A), PRAYING TO 1). DECIDE THE FOREGOING SUBSTANTIAL QUESTIONS OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE COURT AS DEEMED FIT AND ETC.

THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2025:KHC:35787-DB ITA No. 132 of 2024

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT AND HON'BLE MR. JUSTICE K. V. ARAVIND

ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE S.G.PANDIT)

Though the matter is listed for orders, the same is taken up for dismissal, in view of the fact that the substantial questions of law raised herein are already answered by a co-ordinate bench of this Court in Commissioner of Income Tax, LTU, Bangalore V/S Vijaya Bank reported in 2021(123) taxmann.com 214 (Karnataka).

2.

The above appeal is filed under Section 260-A of the Income Tax Act, 1961, questioning the order dated 25.04.2023 passed by the Income Tax Appellate Tribunal, “B” Bench, Bengaluru in ITA/528/Bang/2019 for the assessment year 2015-16 by raising the following substantial questions of law: “1. Whether, on the facts and in the circumstances of the case and in law, the Hon’ble ITAT is justified in allowing the claim of

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HC-KAR NC: 2025:KHC:35787-DB ITA No. 132 of 2024

depreciation of Rs.161,24,64,360/- on ‘held to maturity’ (HTM) investment by relying on the decision in earlier years without appreciating that the decision on this issue has not reached finality and the issue is pending before the Hon’ble Supreme Court of India (Case No.004952 of 2015)?

2.

Whether, on the facts and in the circumstances of the case and in law, the Hon’ble ITAT is justified in upholding the order of Ld.CIT(A) in allowing depreciation of Rs.161,24,64,360/- on HTM Securities when the said investments in HTM Securities are not affected by market appreciation or depreciation nor is there any revenue loss on that account?

3.

Whether, on the facts and in the circumstances of the case and in law, the Hon’ble ITAT is justified in allowing the claim of depreciation of Rs.161,24,64,360/- on ‘held to maturity’ (HTM) investment ignoring that the RBI has allowed banks to claim depreciation on security which are ‘Held for trade’ and that the depreciation is not allowable on securities “Held for Maturities”?

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HC-KAR NC: 2025:KHC:35787-DB ITA No. 132 of 2024

As stated above, the above substantial questions of law have already been answered in the above stated decision. Hence, following the above stated decision, the present appeal stands dismissed.

3.

In view of dismissal of the appeal, I.A.No.2/2025 filed for condonation of delay does not survive for consideration. Accordingly, the said application is dismissed.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (K. V. ARAVIND) JUDGE

MPK CT:bms List No.: 1 Sl No.: 3

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