THE COMMISSIONER OF INCOME TAX-III vs. M/S.CORPORATION BANK

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ITA/369/2011HC KarnatakaKAHC01061847201124 January 2020Bench: ALOK ARADHE,RAVI V HOSMANI5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal by answering the substantial questions of law based on its previous judgments. The first question was answered based on a judgment dated 17.01.2020, and the second and third questions were answered based on a judgment dated 02.12.2014.

What were the facts?

The Revenue appealed against an ITAT order concerning assessment year 2007-08. The appeal raised questions about the deletion of additions for expenditure related to exempt income and the allowability of depreciation on the investment portfolio treated as stock-in-trade.

What were the issues?

Whether expenditure relating to earning exempt income is disallowable under Section 14A(1), and whether depreciation on investment portfolio treated as stock-in-trade is permissible.

Which sections of the Income-tax Act were involved?

Section 14A(1),Section 260-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 24TH DAY OF JANUARY 2020

PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE

AND

THE HON’BLE MR. JUSTICE RAVI V. HOSMANI

INCOME TAX APPEAL NO.369 OF 2011

Between:

1.

The Commissioner of Income

Tax-III, Central Revenue

Buildings, Queens Road,

Bangalore-560 001

2.

The Assistant Commissioner of Income Tax,

Circle 2(1),

Mangalore

… Appellants (By Sri E.I. Sanmathi, Advocate)

And:

M/s. Corporation Bank HO: Pandeshwar, Mangalore … Respondent (By Sri T. Suryanarayana, Advocate)

This Income Tax Appeal is filed under Section 260-A of Income Tax Act, 1961, arising out of Order

dated 31.05.2011 passed in ITA No.710/Bang/2010, for the Assessment Year 2007- 08, praying that this Hon’ble Court may be pleased to formulate the substantial questions of law stated therein, etc.

This Appeal coming on for Hearing this day, Alok Arade J. delivered the following:

JUDGMENT

Sri E.I. Sanmathi, learned counsel for the Revenue- appellant. Sri K.S. Ramabhadran Balram R. Rao, learned counsel for the assessee.

This appeal is under Section 260A of the Income Tax Act, which has been filed by the Revenue, admitted by the Bench of this Court by order dated 04.06.2012 on following substantial questions 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 which does not allow any such deduction?

2.

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?

3.

Whether, the Income Tax Appellate Tribunal was justified in dismissing the appeal preferred by the revenue by holding that the depreciation on valuation of investment portfolio is allowable by treating the investments held by the assessee-bank as stock in trade even when the same was not permitted under the provisions of the I.T. Act and, as such, whether the order

of the Tribunal can be said to be perverse in nature?

2.

Learned counsel for the parties jointly submitted that the first substantial question of law is already been answered by this Court vide judgment dated 17.01.2020 passed in ITA No.97/2010.

3.

Learned counsel for the parties further submitted that the second and third substantial questions of law are already covered by the judgment dated 02.12.2014 by the Bench of this Court in ITA No.268/2009, which was a case of assessee itself.

4.

In view of the aforesaid submissions, the first substantial question of law is answered in terms of the judgment dated 17.01.2020 passed by this Court in ITA No.97/2010, whereas, second and third substantial questions of law are answered in

terms of judgment dated 02.12.2014 passed in ITA No.268/2009.

5.

Accordingly, the appeal is disposed of.

Sd/-

JUDGE

Sd/-

JUDGE

SBS

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