THE COMMISSIONER OF INCOME TAX vs. STATE BANK OF MYSORE

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 29TH DAY OF JANUARY, 2016

:PRESENT: THE HON’BLE MR.JUSTICE N.K. PATIL

AND

THE HON’BLE MRS.JUSTICE S. SUJATHA

I.T.A.NO.401 OF 2010 Between:

And :

State Bank of Mysore, P.B. No.9727, K.G. Road, Bangalore-25.

…Respondent (By Sri. K.S. Ramabadran, Advocate) *** This ITA is filed U/s. 260A of the Income Tax Act, 1961, praying to formulate the substantial question of law, allow the appeal and set aside the orders passed by the Income Tax Appellate Tribunal, Bangalore, in ITA No. 706/Bang/2008 dated 18/06/2010 and confirm the order of the Appellate Commissioner confirming the order passed by

the Deputy Commissioner of Income Tax, Circle-12(3), Bangalore.

This ITA coming on for Hearing, this day, N.K.PATIL J., delivered the following: :J U D G M E N T:

This appeal by the Revenue is arising out of the impugned order dated 18/06/2010, passed in ITA No.706/Bang/2008, by the Income Tax Appellate Tribunal, Bangalore Bench-B, Bangalore, confirming the order of the Appellate Commissioner for considering the following substantial question of law: (i) Whether the Appellate Authorities were correct in holding that a provision of Rs.92,89,000/- current category of investments or available for sale securities is an allowable deduction debited to the Profit and loss account despite the same being an asset not being affected by market value either appreciation or depreciation?

of a sum of Rs.92,89,000/- for “current category of investments or available for sale securities” and debited to the Profit and Loss account and claimed as an expense. The Assessing Officer has passed an assessment order on 31.5.2007 disallowing the same. Being aggrieved, assessee has filed an appeal before the Appellate Commissioner, who in turn, by order dated 12.3.2008

holding

that current category of investments or available for sale securities was held as stock in trade and on its valuation as closing stock in accordance with RBI guidelines and as per market rate was an allowable deduction in the Profit and Loss account. Being aggrieved by the said order, the appellants herein have approached the Appellate Tribunal, which in turn, by order dated 18.6.2010 has confirmed the finding of the Appellate Commissioner and consequently rejected the appeal filed by the Revenue. Being aggrieved by the order impugned passed by the Appellate Tribunal, the Revenue has presented

this appeal for considering the substantial question of law as stated above. 3. We have heard the learned counsel for the Revenue and learned counsel for the respondent. 4. During the course of submission, learned counsel appearing for both the parties, submitted that, the subject matter involved in this case is directly covered by the judgment passed by the Division Bench of this Court dated 11.3.2013 in I.T.A.No.687/2008 (The Commissioner of Income Tax and another Vs. Vijaya Bank). Therefore, they submitted that following the said judgment this appeal may also be disposed of. 5. The above submission made by learned counsel for both the parties is placed on record. 6. The appeal filed by the Revenue is dismissed answering the substantial question of law in favour of assessee and against the Revenue, following the judgment of the Division Bench of this Court dated

11.3.2013 in I.T.A.No.687/2008 (The Commissioner of Income Tax and another Vs. Vijaya Bank) and for the reasons stated therein.

Sd/- JUDGE

Sd/-

JUDGE tsn*