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

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ITA/344/2012HC KarnatakaKAHC01043674201218 December 2018Bench: RAVI MALIMATH,K.NATARAJAN3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the substantial questions of law were covered by a previous judgment of the same court in favour of the assessee. Therefore, the appeal was decided in line with that precedent.

What were the facts?

The Revenue appealed against an ITAT order allowing depreciation on the valuation of the assessee bank's investment portfolio. The core issue was whether these investments should be treated as stock-in-trade after RBI and CBDT circulars came into force.

What were the issues?

Whether depreciation on the valuation of an investment portfolio treated as stock-in-trade is allowable for a bank, and if the ITAT's order was perverse by following non-final decisions.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

ON THE 18TH DAY OF DECEMBER, 2018

BEFORE

THE HON'BLE MR. JUSTICE RAVI MALIMATH

AND

THE HON’BLE MR.JUSTICE K.NATARAJAN

INCOME TAX APPEAL NO.344 OF 2012

BETWEEN:

1.

THE COMMISSIONER OF INCOME TAX – MANGALURU.

2.

THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-2(1), BENGALURU. ... APPELLANTS (BY SRI E. I. SANMATHI, ADVOCATE)

AND:

M/S. CORPORATION BANK H.O. MANGALADEVI TEMPLE ROAD, PANDESHWAR, MANGALURU.

...RESPONDENT

(BY SRI K. P. KUMAR, SENIOR ADVOCATE ALONG WITH SRI BALRAM R. RAO, ADVOCATE)

THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF THE INCOME-TAX ACT 1961, ARISING OUT OF ORDER DATED 18/06/2012 PASSED IN INCOME

2 TAX APPEAL NO.794/BANG/2011, FOR THE ASSESSMENT YEAR 2008-2009, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN; MODIFY THE APPELLATE ORDER DATED 18/06/2012 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'A' BENCH, BENGALURU, AS SOUGHT FOR, IN APPEAL PROCEEDINGS INCOME TAX APPEAL NO.794/BANG/2011.

*****

THIS INCOME TAX APPEAL COMING ON FOR HEARING THIS DAY, RAVI MALIMATH J., DELIVERED THE FOLLOWING:

JUDGMENT

The appeal was admitted to consider the following two substantial questions of law: “i. Whether on the facts and 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?

ii. Whether on the facts and circumstances of the case, the Tribunal’s order can be said as perverse in nature since the Tribunal has

3 followed the decisions which have not reached finality?”

2.

Both learned counsels submit that the aforesaid substantial questions of law are covered by the judgment of this Court in the case of COMMISSIONER OF INCOME TAX VS. CORPORATION BANK, passed in Income tax Appeal No.268 of 2009, dated 02.12.2014, wherein the very same questions of law were answered in favour of the assessee and against the revenue. Hence, following the aforesaid judgment, the substantial questions of law are answered accordingly.

The writ petition stands disposed off.

Sd/-

Sd/- JUDGE

JUDGE

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