THE COMMISSIONER OF INCOME TAX vs M/S VIJAYA BANK

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 15TH DAY OF JANUARY, 2021

PRESENT

THE HON’BLE MR.JUSTICE ALOK ARADHE

AND

THE HON’BLE MR.JUSTICE NATARAJ RANGASWAMY

I.T.A. NO.16 OF 2017

BETWEEN:

THE COMMISSIONER OF INCOME-TAX, LTU, JSS TOWERS, BSK III STAGE, BENGALURU-560085.

THE JOINT COMMISSIONER OF INCOME-TAX, LTU, JSS TOWERS, BSK III STAGE, BENGALURU-560085. ...APPELLANTS

(BY SRI. ARAVIND K.V., ADVOCATE)

AND:

M/S VIJAYA BANK, HEAD OFFICE, CENTRAL ACCOUNTS DEPARTMENT 41/2, M.G.ROAD, BENGALURU-560001. PAN: AAACV 4791J …RESPONDENT

(BY SRI. T.SURYANARAYANA, ADVOCATE)

2 THIS APPEAL IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED 22.07.2016 PASSED IN ITA NO.331/Bang/2014, FOR THE ASSESSMENT YEAR 2009-2010 PRAYING TO (1) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE (2) ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE ITAT, BENGALURU IN ITA NO.331/Bang/2014 DATED 22.07.2016 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE JOINT COMMISSIONER OF INCOME TAX, LTU, BENGALURU AND ETC.

THIS APPEAL COMING ON FOR HEARING THIS DAY, ALOK ARADHE, J., DELIVERED THE FOLLOWING:

JUDGMENT

Mr.K.V.Aravind, learned counsel for the revenue.

Mr.T.Suryanarayana, learned counsel for the assessee.

This appeal under Section 260A of the Income Tax Act, 1961 has been filed by the revenue. The subject matter of the appeal pertains to the Assessment Year 2009-10. The appeal was admitted by the Bench of this Court vide order dated 02.01.2018 on the following substantial questions of law:

“1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside

3 the Disallowance made under section 14(A) of the Act for sum of Rs.2,54,00,000/- by relying upon its earlier order which has not reached finality even though all the ingredients of Section 14A are satisfied in the case of assessee to attract such a disallowance?

Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside the disallowance of valuation of loss on HTM Securities amounting to Rs.151,48,15,234 by relying upon earlier order which has not reached finality and even when the said loss cannot be considered as Revenue Loss?

Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside the disallowance of Mark to Market Loss on Derivatives of Rs.111,89,71,243 by relying upon the decision on Mumbai Bench in the case of Edelweiss Capital Ltd vs. ITO (reported in 8Taxmann.com 157 (Mum) 2010) even though the assessing authority has rightly disallowed the same considering the treatment of HTM Categories as investments or Stock in trades which decided the allowability of this expenditure?”

4 2. The learned counsel for the assessee submits that the substantial question of law No.1 involved in this appeal has already been answered against the revenue by a decision of the Supreme Court in Maxopp Investment Ltd., Vs. Commissioner of Income Tax, New Delhi, [(2018) 91 taxmann.com 154 (SC)].

It is further submitted by learned counsel for the assessee that the substantial questions of law Nos.2 and 3 do not arise for consideration in this appeal as they have already been answered in the judgment dated 14.12.2020 passed by this Court in I.T.A.No.15/2012. The aforesaid submission could not be disputed by the learned counsel for the revenue.

In view of the decision of the Supreme Court in the case of Maxopp Investment Ltd., Vs. Commissioner of Income Tax, New Delhi in [(2018) 91 taxmann.com 154 (SC)] and the judgment of this Court in I.T.A.No.15/2012 dated 14.12.2020, we do not find any merit in this appeal.

5 In the result, the appeal is hereby dismissed.

Sd/- JUDGE

Sd/- JUDGE GH

THE COMMISSIONER OF INCOME TAX vs. M/S VIJAYA BANK