THE COMMISSIONER OF INCOME TAX vs STATE BANK OF MYSORE

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 4TH DAY OF SEPTEMBER, 2015

PRESENT

THE HON'BLE MR. JUSTICE VINEET SARAN

AND

THE HON’BLE MR. JUSTICE B.MANOHAR

ITA NO.689/2009

BETWEEN

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

THE DY. COMMISSIONER OF INCOME-TAX CIRCLE-12(3), C.R.BUILDING, QUEENS ROAD, BANGALORE. ... APPELLANTS

(BY SRI.K.V.ARAVIND, ADV.)

AND

M/S STATE BANK OF MYSORE HEAD OFFICE, K.G.ROAD, BANGALORE.

...RESPONDENT (BY SRI K.R.VASUDEVAN, ADV.,)

THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED: 29.05.2009 PASSED IN ITA NO.647/BNG/2008 FOR THE ASSESSMENT YEAR 2005-06 PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BANGALORE, CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE

ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-12(3), BANGALORE.

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

JUDGMENT

The Revenue has preferred this appeal challenging the order passed in ITA No.647/Bang/2008 dated 29.05.2009 by the Income Tax Appellate Tribunal holding that the assessee is entitled to value all the investment at cost prices or market value whichever is lower by treating such investment as stock-in-trade. Aggrieved by the said order, the Revenue is in appeal before us.

This appeal has been ADMITTED on the following question of law:

“Whether the Tribunal was correct in allowing depreciation claim of Rs.127,21,17,913/- on “held on maturity” investments by treating it as stock-in-trade despite the same not being traded on a regular basis by the assessee in accordance with RBI and CBDT circulars?”

In the case of Karnataka Bank –vs- Commissioner of Income Tax in ITA No.172/2009 decided on 11.03.2013, a Division Bench of this Court has answered the said substantial question of law in favour of the assessee and against the Revenue.

For the reasons stated therein, this appeal is dismissed answering the substantial question of law in favour of the assessee and against the Revenue. Ordered accordingly.

Sd/-

JUDGE

Sd/-

JUDGE TL

THE COMMISSIONER OF INCOME TAX vs. STATE BANK OF MYSORE