COMMISSIONER OF INCOME TAX vs. VIJAYA BANK

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ITA/687/2008HC KarnatakaKAHC01033601200811 March 2013Bench: B.MANOHAR,N.KUMAR4 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the assessee was entitled to value investments at cost or market value, whichever is lower, by treating such investments as stock-in-trade. The High Court upheld this decision.

What were the facts?

The Revenue appealed against the ITAT's order which allowed the assessee to value investments at cost or market value, whichever is lower, treating them as stock-in-trade. The core issue was whether these investments could be considered stock-in-trade for depreciation claims.

What were the issues?

Whether investments held until maturity can be treated as stock-in-trade for the purpose of claiming depreciation, especially when not traded regularly.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 11TH DAY OF MARCH 2013

PRESENT

THE HON'BLE MR.JUSTICE N.KUMAR

AND

THE HON'BLE MR. JUSTICE B.MANOHAR

ITA NO.687/2008

BETWEEN:

1.

The Commissioner of Income Tax, C.R.Building, Queens Road, Bangalore.

2.

The Assistant Commissioner of Income Tax, Circle – 12(3), C.R.Building, Queens Road, Bangalore.

…Appellants

(By Sri.K.V.Aravind, Advocate)

AND:

Vijaya Bank, No.41/2, M.G.Road, Bangalore – 560 001.

….Respondent

(By Sri.Sarangan, Sr. Counsel along with Sri.K.S.Ramabhadran, Advocate)

ITA filed u/s.260-A of I.T.Act, 1961 arising out of Order dated 24-01-2008 passed in ITA.No.253/Bang/2007, for the Assessment Year 2003- 2004, praying that this Hon’ble Court may be pleased to formulate the substantial questions of law stated therein and allow the appeal and set aside the orders passed by the ITAT, Bangalore in ITA.No.253/Bang/2007, dated 24-01-2008 confirming the order of the Appellate Commissioner and confirm the order passed by the Assistant Commissioner of Income Tax, Circle – 12 (3), Bangalore in the interest of justice and equity.

This appeal is coming on for hearing this day, N. KUMAR J., delivered the following:

J U D G M E N T

The Revenue has preferred this appeal challenging the order passed in ITA.No.253/Bang/2007, dated 24-01-2008 by the Income Tax Appellate Tribunal (hereinafter referred to as ‘the Tribunal’) holding that the assessee is entitled to value all the investment at

cost prices or market value whichever is lower by treating such investment as stock-in-trade. Aggrieved by the said order, the Revenue is in appeal before us. 2. The substantial question of law which is framed in this case reads as under:

“Whether the Tribunal was correct in allowing depreciation claim of Rs.39,21,52,485/- on “held on maturity’ investments by treating it as stock-in-trade despite the same not being traded on a regular basis by the assessee in accordance with RBI and CBDT circulars?

3.

In the case of KARNATAKA BANK v/s COMMISSIONER OF INCOME TAX in ITA No.172/2009 which is disposed of today, we have answered the said substantial question of law in favour of the assessee and against the Revenue.

4.

For the reasons stated therein, this appeal is dismissed answering the substantial questions of law in favour of the assessee and against the Revenue. Ordered accordingly.

Sd/-

JUDGE

Sd/-

JUDGE

mpk/-*

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