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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 8TH DAY OF NOVEMBER, 2021
PRESENT
THE HON’BLE MRS. JUSTICE S. SUJATHA AND
THE HON’BLE MR. JUSTICE S. RACHAIAH
INCOME TAX APPEAL NO.362 OF 2018
BETWEEN
THE PR. COMMISSIONER OF
INCOME-TAX, CIT(A)
C.R. BUILDING, ATTAVARA
MANGALURU-575 001.
THE ASST. COMMISSIONER
OF INCOME TAX
CIRCLE-2(1), C.R. BUILDING
ATTAVARA,
MANGALURU-575 001.
...APPELLANTS (BY SHRI K.V. ARAVIND, ADVOCATE (PHYSICAL HEARING))
AND
M/S. CORPORATION BANK HO MANGALURU TEMPLE ROAD PANDESHWARA MANGALURU – 575 001. PAN:AAACC 7245E.
...RESPONDENT (BY SHRI T. SURYANARAYANA, ADVOCATE (PHYSICAL HEARING))
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THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 17.01.2018 PASSED IN ITA NO.206/Pan./2016, FOR THE ASSESSMENT YEAR 2012-13.
THIS INCOME TAX APPEAL COMING ON FOR HEARING, THIS DAY, S.SUJATHA J., DELIVERED THE FOLLOWING:
JUDGMENT
This appeal is filed by the revenue/appellants under Section 260A of the Income Tax Act, 1961 [‘Act’ for short] assailing the order of the Income Tax Appellate Tribunal “C” Bench, Bangalore [‘Tribunal’ for short] dated 17.01.2018 passed in ITA No.206/Pan/2016 relating to the Assessment Year 2012-13.
The revenue has filed the appeal raising the following substantial question of law No.1 to 6: 1. “Whether on the facts and in the circumstances of the case, Tribunal is right in law in setting aside the disallowance made under the head investment portfolio by following its earlier order passed in assessee’s own case for A.Y.2010-11 and 2011-12 which has not reached finality even when according to guidelines, the securities should have been investments but same cannot be applied for
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accounts for finalizing affairs of assessee for filing of return of income and as per the principles of Accountancy and decision of Apex and Southern Court in the case of UCO Bank V/s CIT (240 ITR Page 355) and Southern Technologies reported in 320 ITR page 577 (SC)2010 wherein it is held that income should be recognized in a way which reflects a true and fair picture of the affairs of the Assessee? 2. Whether on the facts and in the circumstances of the case, Tribunal is right in law in setting aside the disallowances made under Section 36(1) (viia) and also (viii) by relying upon its earlier orders passed for the assessment years 2009-10 to 2011-12? 3. Whether on the facts and in the circumstances of the case, Tribunal is right in law in setting aside the disallowance of expenditure incurred on earning exempt income under Section 14A read with Rule 8D of the Act by following its earlier order passed in assessee’s own case for A.Y.2010- 11 and 2011-12 which has not reached finality even when the assessing authority rightly disallowed the said expenditure as all the conditions for invoking said provision were satisfied in case of assessee?
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Whether on the facts and in the circumstances of the case, Tribunal is right in law in setting aside the disallowance made under Section 40(a)(ia) of the Act by following its earlier order passed in assessee’s own case for A.Y.2010-11 and 2011-12 which has not reached finality even when the assessing authority rightly made disallowance as the payments made to NFS is nothing but commission/brokerage and as such the assessing authority invoked said section as since assessee had not deducted TDS as required under Section 194H of the Act? 5. Whether on the facts and in the circumstances of the case, Tribunal is right in law in setting aside the disallowances made under Section 36(1) (viia) and (viii) by relying upon its earlier orders passed for the assessment years 2009-10 to 2011-12 which have been challenged before this Hon’ble High Court and even when the assessing authority rightly disallowed the claim made under said sections on the basis of material available on record and after application of relevant provisions of the Act? 6. Whether on the facts and in the circumstances of the case, Tribunal is right in law in setting in holding that the provisions of Section 115JB is not
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applicable to the assessee-Bank by following its earlier order passed in assessee’s own case for A.Y.2010-11 and 2011-12 which has not reached finality even when the said decision’s have not reached finality ignoring section 2(17) of the Act whereby the assessee can be considered as Company and further by virtue of Explanation 3 by Finance Act, 2012, it is made clear that for assessment year beginning on or before 1st April 2012, a banking company has an option for MAT, to prepare its profit and loss account either in accordance with the provisions of I.T.Act or in accordance with the provisions governing it, therefore, the MAT provisions are applicable to assessee-Bank?”
Substantial question of law No.3 and 6 were admitted by this Court.
Learned counsel for the revenue made an endeavour to admit substantial question No.1 and 4.
Learned counsel for both the parties submit ad-idem that substantial question of law No.2 and 5 does not arise for consideration.
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Substantial question of law No.6 is answered as per decision of the Co-ordinate Bench of this Court in ITA No.18/2014 and connected matters, (DD: 16.01.2020) in the case of The Commissioner of Income Tax & another v/s M/s.ING Vysaya Bank Limited in favour of the assessee and against the revenue.
Substantial questions of law No.1, 3 and 4 are answered against the revenue and in favour of the assessee in the light of the decision of the Co-ordinate Bench of this Court in ITA No.427/2015 (DD 23.11.2020), the assessee’s own case.
Appeal stands dismissed accordingly.
Sd/- JUDGE
Sd/-
JUDGE