DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1(1), MANGALURU, MANGALURU vs. KARNATAKA BANK LTD., MANGALURU

ITA 963/BANG/2023Status: DisposedITAT Bangalore19 February 2024AY 2016-1738 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that no disallowance under Section 14A can be made in the case of banks, especially if the investments are considered stock-in-trade, following Supreme Court and jurisdictional High Court decisions.

What were the facts?

The assessee, a bank, had made disallowances under Section 14A. The Assessing Officer invoked Rule 8D and made a higher disallowance. The CIT(Appeals) partly allowed the appeal, deleting disallowance under Rule 8D(2)(ii) but upholding disallowances under Rule 8D(2)(i) and (iii) to the extent of exempt income.

What were the issues?

Whether disallowance under Section 14A read with Rule 8D is applicable to banks, particularly concerning investments that are stock-in-trade.

Which sections of the Income-tax Act were involved?

Section 14A

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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE

Before: SHRI GEORGE GEORGE K. & SHRI LAXMI PRASAD SAHU

For Appellant: Shri S. Ananthan, CA
For Respondent: Ms. Neera Malhotra, CIT(DR)(ITAT), Bengaluru
Hearing: 25.01.2024Pronounced: 19.02.2024

Per Bench These appeals are filed by the assessee & revenue against the separate orders 27.09.2023 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the assessment years 2016-17 & 2017-18. 2. The assessee is a private sector bank carrying on the business of banking. The assessee filed return of income on 14.10.2016 for AY 2016-17 of Rs.280.37 crores and on 31.10.2017 for Rs.721.28 crores under

The order continues below.

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