THE COMMISSIONER OF INCOME TAX vs M/S BANK MUSCAT SAOG

- 1 - IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 30TH DAY OF OCTOBER 2015 PRESENT

THE HON’BLE MR.JUSTICE VINEET SARAN

AND

THE HON’BLE MRS. JUSTICE S. SUJATHA

I.T.A. NO. 837 OF 2009

BETWEEN:

THE COMMISSIONER OF INCOME TAX C.R.BUILDING, QUEENS ROAD BANGALORE

THE ASST. COMMISSIONER OF INCOME TAX (INTL. TAXN.) CIRCLE 1(1), C.R.BUILDING QUEENS ROAD BANGALORE ... APPELLANTS

(BY SRI. K V ARAVIND, ADV.)

AND

M/S BANK MUSCAT SAOG NO.29, INFANTRY ROAD BANGALORE ... RESPONDENT

(BY SMT. VANI H, ADV.)

THIS ITA IS FILED U/S.260-A OF I.T.ACT, 1961 ARISING OUT OF ORDER DATED 24-07-2009 PASSED IN ITA

- 2 - NO.125/BNG/2009, FOR THE ASSESSMENT YEAR 2003-2004, PRAYING TO (I) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN; (II) ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT BANGALORE IN ITA NO.125/BNG/2009 DATED 24-07-2009, CONFIRMING THE ORDER PASSED BY THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, (INTL., TAXN.,) CIRCLE-19(1), BANGALORE.

THIS ITA APPEAL COMING ON FOR FINAL HEARING THIS DAY, VINEET SARAN J. DELIVERED THE FOLLOWING:

JUDGMENT

This appeal has been filed by the Revenue raising the following questions of law: 1. Whether the Appellate Authorities were correct in holding that broken period interest was not liable to income tax when the same had accrued and the assessee had accounted for it under mercantile system of accounting?

Whether the judgment of this Hon’ble Court in CIT vs. Canara Bank 195 ITR 66 and Vijaya Bank Ltd. vs. CIT 187 ITR

- 3 - 541 (SC) is applicable to the current assessment year when the provision of Section 18 of the Interest Tax Act has been omitted and Section 145 of the Income Tax Act has been amended?

We have heard learned counsel for the parties and have perused the record.

During the course of arguments it was brought to our notice that the questions raised by the Revenue in this appeal, have been answered against the Revenue by Division Bench of this court in the case of COMMISSIONER OF INCOME TAX VS. CANARA BANK report in

(1992) 195 ITR 66.

Learned counsel for the parties do not dispute this position. Accordingly, for the reasons given in the case of Canara Bank (supra), the questions involved in this appeal are also answered in favour of the assessee

- 4 - and against the Revenue. The appeal accordingly stands dismissed.

No order as to costs.

Sd/- JUDGE

Rd/-

THE COMMISSIONER OF INCOME TAX vs. M/S BANK MUSCAT SAOG