ASSISTANT COMMISSIONER OF INCOME TAX vs. M/S KRISHNA GRAMEENA BANK

1 IN THE HIGH COURT OF KARNATAKA KALABURAGI BENCH DATED THIS THE 17TH DAY OF NOVEMBER 2021 PRESENT THE HON’BLE MR.JUSTICE R. DEVDAS AND THE HON’BLE MR.JUSTICE RAJENDRA BADAMIKAR I.T.A. No.200011/2015 BETWEEN: ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1 GULBARGA-585104 ...APPELLANT (BY SRI. AMEET KUMAR DESHPANDE, ADVOCATE) AND: M/S KRISHNA GRAMEENA BANK HEAD OFFICE KUSNOOR, KALABURAGI-585104 …RESPONDENT (BY SRI. A. SHANKAR, SENIOR COUNSEL FOR SRI S.ANNAMALAI AND SRI M. LAVA, ADVOCATES)

THIS ITA IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, PRAYING TO ALLOW THIS APPEAL AND

2 TO SET ASIDE THE JUDGMENT AND ORDER DATED 09.01.2013 PASSED IN ITA NO.CIT(A)203/HBL/2011-12/AY 2009-10 BY THE COMMISSIONER OF INCOME TAX (APPEALS) HUBLI. THIS APPEAL COMING ON FOR FINAL HEARING, THIS DAY, R.DEVDAS J., DELIVERED THE FOLLOWING: JUDGMENT R. DEVDAS J., (ORAL):

The substantial questions of law that arise for decision making in this appeal are- 1. Whether the deduction towards the expenditure of amortization of premium paid on purchase of Government Securities can be allowed by placing reliance on the judgment of the Hon’ble Supreme Court in the case of Vijaya Bank reported in 187 ITR 541? 2. Whether the Tribunal and the Commissioner of Income Tax (Appeals) are justified in holding that the provision for privilege leave encashment is not a contingent liability and is therefore an allowable deductions?

3 2. In judgment passed on the even date, in I.T.A.No.6007/2012 the substantial question of law No.1 stands answered. 3. We have held that the decision in the case of The Commissioner of Income Tax and another vs. Karnataka Vikas Grameen Bank in I.T.A.No.100014/2014 dated 14.12.2015 (Kar.) holds the issue in favour of Assessee and against the Revenue. 4. Consequently, the appeal is partly allowed, while answering substantial question of law No.1 against the Revenue and substantial question of law No.2 in favour of Revenue. Accordingly, the judgment and order dated 03.12.2014 in ITA No.1046/BANG/2013 passed by the Income Tax Appellate Tribunal, Bangalore Bench-A is set aside, while further setting aside the order dated 09.01.2013 passed in ITA No.CIT(A)203/2011-12/AY 2009-10

4 passed by the Commissioner of Income Tax (Appeals) Hubli, to the extent hereinabove mentioned. Sd/- JUDGE Sd/- JUDGE sdu