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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 11TH DAY OF JUNE 2020
PRESENT
THE HON’BLE MR. JUSTICE ALOK ARADHE
AND
THE HON’BLE MR. JUSTICE HEMANT CHANDANGOUDAR
I.T.A. NO.388 OF 2011
BETWEEN
THE COMMISSINER OF INCOME-TAX-LTU, JSS TOWERS BSK III STAGE, BANGALORE.
THE DY. COMMISSIONER OF INCOME-TAX CIRCLE-12(5), C.R BUILDING, QUEENS ROAD, BANGALORE. ... APPELLANTS
(BY SRI DILIP, ADV. FOR K V ARAVIND, ADV.)
AND
M/S VIJAYA BANK, HEAD OFFICE, CENTRAL ACCOUNTS DEPARTMENT, 41/2, M G ROAD, BANGALORE 560 001. ... RESPONDENT
(BY SRI T.SURYANARAYANA, ADV. FOR SRI BALRAM R RAO, ADV.) - - -
THIS ITA IS FILED UNDER SEC.260-A OF I.T.ACT, 1961 ARISING OUT OF ORDER DATED 17/06/2011 PASSED IN ITA NO.340/BANG/2009, FOR THE ASSESSMENT YEAR 2004-2005, PRAYING TO: I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE ITAT, BANGALORE IN ITA NO.340/BANG/2009 DATED 17/06/2011 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-12(5), BANGALORE, IN THE INTEREST OF JUSTICE AND EQUITY.
THIS ITA COMING ON FOR ADMISSION, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:
JUDGMENT
Mr.Dilip, learned counsel for Mr.K.V.Aravind, learned counsel for the revenue. Mr.T.Suryanarayana, learned counsel for Mr.Balaram R.Rao, learned counsel for the respondent.
This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been filed by the revenue which was admitted by a Bench of this Court vide order dated 28.05.2012 on the following substantial questions of law:
(1) Whether the tribunal was correct in holding that the interest income earned from the deposits made by the assessee with the share application money is not liable for tax under the head income from other sources when the interest earned was revenue nature without applying the law laid down by the Apex Court in the case of Tuticorin Alkali Chemicals Vs. CIT 227 ITR 172?
(2) Whether the tribunal was correct in holding that the interest income earned from deposits is liable to be setoff against the expenses incurred towards public issue when the interest earned is revenue nature and the expenditure claimed is capital nature contrary to the law laid down by the Apex Court in the case of Tuticorin Alkali Chemicals Vs. CIT 227 ITR 172?
When the matter was taken up today, learned counsel for the revenue fairly submitted that he does not intend to press the first substantial question of law as the same does not arise in the fact situation of the
case. Further, it is fairly submitted that the second substantial question of law is answered against the revenue by the Supreme Court in ‘COMMISSIONER OF INCOME TAX-IV, AHMEDABAD Vs. SHREE RAMA MULTI TECH LTD.’ [(2018) 92 TAXMANN.COM 363 (SC)].
In view of the aforesaid submission and in view of the aforesaid enunciation of law, the second substantial question of law is answered against the revenue and in favour of the assessee. In the result, the appeal is dismissed.
Sd/- JUDGE
Sd/- JUDGE RV