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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 31ST DAY OF JANUARY 2020 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND
THE HON’BLE MR. JUSTICE RAVI V. HOSMANI
ITA NO. 52 OF 2015
BETWEEN:
THE COMMISSIONER OF INCOME TAX, ATVARA, MANGALORE
THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -2 (1), MANGALORE ...APPELLANTS (BY SRI.E I SANMATHI, ADVOCATE)
AND: M/S CORPORATION BANK HEAD OFFICE, P.B.NO.88, MANGALADEVI TEMPLE ROAD, PANDESHWAR, MANGALORE-575 001 PAN:AAACC7245E …RESPONDENT (BY SRI.BALRAM R RAO, ADVOCATE)
2 THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961 PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON’BLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 19.09.2014 PASSED BY THE ITAT, ‘B’ BENCH, BANGALORE, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEE’S CASE, IN APPEAL PROCEEDINGS IN ITA NO.1310 AND 1393/BANG/2012 FOR A.Y.2010-11.
THIS APPEAL COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:
JUDGMENT
This appeal has been filed by the Revenue which has been admitted by a Bench of this Court vide order dated 31.03.2015 on the following substantial question of law. 1. “Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the addition representing expenditure relating to earning of exempt income ignoring the provisions of section 14A(1) of the Act r.w.Rule 8D?” 2. “Whether on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the addition representing excess claim of bad debts
3 written off under Section 36(1)(vii) of the Act, exceeding the credit balance of the provision made under section 36 (1)(viia) of the Act when the provisions of this section did not permit such an action?” 3. “Whether on the facts and in the circumstances of the case, the Tribunal was correct in holding that depreciation on valuation of investment portfolio is allowable by treating the investments held by the assessee bank as stock-in-trade once the RBI Master Circular read with CBDT Circular No.665 came into force?”
When the matter was taken up today, learned counsel for the parties jointly submitted that the substantial question of law No.2 is covered by the judgment dated 24.01.2020 passed in ITA No.256/2011 by a Division Bench of this Court. Accordingly, the aforesaid substantial question of law is answered in favour of the assessee.
Similarly, 3rd substantial question of law is answered by a Bench of this Court in judgment dated 16.01.2020 in ITA No.18/2014.
4 4. Insofar as the substantial question of law No.1 is concerned, from perusal of the order passed by the Assessing Officer, we find that the Assessing Authority while invoking the provisions of Rule 14(A) (1) read with Rule 8(D) of the Income Tax Act has not disclosed any basis for expenditure in relation to exempt income while invoking the aforesaid provision. Therefore, the aforesaid substantial question of law is answered in negative and in favour of the assessee.
Accordingly, the appeal is disposed of.
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JUDGE
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BVK