THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 2(1), MANGALORE vs. KARNATAKA BANK LIMITED., MANGALORE

ITA 161/PAN/2019Status: DisposedITAT Bangalore30 September 2024AY 2015-16Bench: SHRI LAXMI PRASAD SAHU (Accountant Member)46 pages
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What did the Tribunal hold?

The Tribunal held that payments made to NFS and Cash Tree for ATM usage charges are not subject to TDS and thus the disallowance under Section 40(a)(ia) is deleted. Similarly, VISA charges are also not liable for TDS. The revenue's appeal is dismissed, and the assessee's appeal is partly allowed.

What were the facts?

The assessee, Karnataka Bank Ltd., appealed against the disallowance of bad debts written off by non-rural branches and disallowance of payments made for ATM network usage. The revenue also appealed against the deletion of disallowances related to expenditure on exempted income and provision for bad and doubtful debts.

What were the issues?

Whether payments for ATM network usage and VISA fees are subject to TDS, and consequently, disallowance under Section 40(a)(ia). Whether expenditure related to exempted income can be added to book profit under Section 115JB.

Which sections of the Income-tax Act were involved?

Section 36(1)(vii),Section 40(a)(ia),Section 14A,Section 115JB

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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE

Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K., JUDCIIAL MEMBER

For Appellant: Shri Ananthan S. & Smt. Lalitha Rameswaran, CAs
For Respondent: Shri D.K. Mishra, CIT(DR)(ITAT), Bengaluru
Hearing: 18.07.2024Pronounced: 30.09.2024

Per Laxmi Prasad Sahu, Accountant Member These cross appeals are filed by the assessee and revenue against the order dated 18.03.2019 of the CIT(Appeals), Mangaluru for the assessment year 2015-16. ITA Nos.1107/Bang/2019 & 161/PAN/2019 2. The assessee has raised the following revised grounds:-

“1. The order of the learned CIT(A) is bad in law and against the facts of the case.

2.

The learned CIT(A) erred in disallowing the claim of Rs. 218,08,8

The order continues below.

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