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

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ITA/345/2012HC KarnatakaKAHC01043557201218 December 2018Bench: RAVI MALIMATH,K.NATARAJAN3 pages
AI SummaryAllowed

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. This previous judgment had answered the same questions in favour of the assessee bank.

What were the facts?

The Revenue appealed against an ITAT order allowing depreciation on the valuation of an investment portfolio for a bank. The appeal raised questions about whether 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 is allowable by treating investments as stock-in-trade. Whether the ITAT's order was perverse for following decisions that had not reached finality.

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.345 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

2 OUT OF ORDER DATED 18/06/2012 PASSED IN INCOME TAX APPEAL NO.795/BANG/2011, FOR THE ASSESSMENT YEAR 2009-2010, 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.795/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 appearing for the parties 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 appeal stands disposed off.

Sd/-

Sd/- JUDGE

JUDGE

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