DCIT,LTU(2), CHENNAI V. INDIAN OVERSEAS BANK, CHENNAI

ITA 309/CHNY/2023

AI Insights

The case involves multiple appeals by both the Deputy Commissioner of Income Tax and M/s. Indian Overseas Bank concerning various assessment years. The appeals covered a range of issues including the reopening of assessments, taxation of notional gains, and the applicability of certain deductions under the Income Tax Act. The Tribunal's decisions were influenced by precedents set in previous cases involving similar issues, particularly those concerning the treatment of assets and liabilities during mergers and the interpretation of specific provisions of the Income Tax Act related to deductions and tax assessments.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472429 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Other Referred Cases: Bajaj Allianz Life Insurance Company Ltd vs. CIT, Vijayeshwari Textiles Ltd vs. CIT, Yuvraj vs UOI, Foramer France vs. CIT, RPG Transmissions Ltd vs. CIT, Union Bank of India vs. ACIT, ICICI Bank vs. ACIT, Saraswat Infotech Ltd vs. CIT, Damodar Valley Corporation vs. CIT, Pepsu Road Transport Corporation vs. CIT, Dhanuka & Sons vs. CIT, CIT vs. Vegetable Products Ltd
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A. SASIKUMAR
• Assessee Lawyers: C. NARESH; THIS TRIBUNAL; THIS
• Keywords: Set aside; Difference of opinion; Change of opinion; Reassessment proceedings; Question of law; Bad and doubtful debts; Depreciation; Reopening of assessment; Earning of tax free income; Competent authority; Reason to believe; Double taxation relief; Permanent establishment; Rule 8D; Revision of order; Tangible material
• Section: 147; 143(3); 250; 263; 192; 64; 48; 153; 43; 22; 90; 13; 139; 14A; 43B; 115JB; 264; 72; 20; 101

Judgement Text

" आयकर अपीलीय अिधकरण ‘डी’’ Ɋायपीठ चेɄई मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI माननीय ŵी मनोज क ुमार अŤवाल ,लेखा सद˟ एवं माननीय ŵी मनु क ुमार िगįर, Ɋाियक सद˟ क े समƗ। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER AND HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER आयकरअपील सं./ ITA Nos.309,524, 525,627/Chny/2023 & ITA No.396/Chny/2024 (िनधाŊरणवषŊ / Assessment Years: 2013-14, 2018-19,2019-2020, 2015-16 & 2015-2016) The Deputy Commissioner of Income Tax, Large Tax Unit, Chennai -600 034. Vs. M/s. Indian Overseas bank, 763, Anna Salai, Chennai 600 34. आयकरअपील सं./ ITA Nos.419,420,574 & 584/Chny/2023 (िनधाŊरणवषŊ / Assessment Year: 2018-2019, 2019-20, 2013-14 & 2015-2016) M/s. Indian Overseas bank, 763, Anna Salai, Chennai 600 34. [PAN: AAACI 1223J] (Appellant) Vs. The Deputy Commissioner of Income Tax, Large Tax Unit, Chennai. (Respondent) Assessee by : Shri. C. Naresh, C.A., Department by : Shri A. Sasikumar, CIT सुनवाई कȧ तारȣख/Date of Hearing : 14.11.2024 घोषणा कȧ तारȣख /Date of Pronouncement : 31.01.2025 2 ITA Nos .309, 419, 420 574 661/23 others आदेश / O R D E R PER MANU KUMAR GIRI (Judicial Member) The captioned appeals being ITA Nos.574/Chny/2023, 584/Chny/2023, 419/Chny/2023 and 420/Chny/2023 has been filed by the assessee and ITA Nos.309/Chny/2019, 627/Chny/2023, 524/Chny/2023, 525/Chny/2024 and ITA No.396/Chny/2024 has been filed by the revenue for aspsessment years 2013-14, 2015-16, 2018-19, 2019-20 and 2015-16 respectively against different impugned orders by CIT(A)/NFAC as per table below: Appellate order u/s 250 by NFAC / CIT(A)-17 under challenge Assessment Order u/s 143(3) of the Act Asst. Year 22.03.2023 by NFAC, Delhi. 03.12.2019 by ACIT, LTU-2, Chennai. 2013-14 09.01.2023 by NFAC, Delhi. 05.02.2020 by ACIT, LTU-2, Chennai. (Order Giving Effect) 2013-14 22.03.2023 by NFAC, Delhi. 03.12.2019 by ACIT, LTU-2, Chennai. 2015-16 12.12.2023 by NFAC, Delhi. 30.03.202 by NFeAC, Delhi. 2015-16 27.02.2023 by NFAC, Delhi. 30.04.2021 by NFeAC, Delhi. 2018-19 3 ITA Nos .309, 419, 420 574 661/23 others 27.02.2023 by NFAC, Delhi. 30.09.2021 by NFeAC, Delhi. 2019-20 2. The assessee M/s Indian Overseas Bank is a Scheduled Bank and assessable as a company for the purpose of Income tax. The assessee filed its return of income for AY 2013-14 on 29.11.2013 declaring income of Rs.966,16,62,596/-. The original assessment u/s 143(3) was completed on 31.12.2016 against which the appellant preferred appeals before the CIT(A) and Tribunal. Subsequently, AO issued notice u/s 148 dated 28.03.2019 reopening the assessment u/s 147. This appeal is arising out of the reopening of original assessment. The reopening issues are in AYs 2013- 14 and 2015-16. 3. At the outset, the ld. counsel for the assessee filed charts and fairly stated that in captioned appeals issues raised in the respective grounds of appeal are covered either in favor of assessee or revenue by the Co-ordinate Bench decision of the Tribunal and other orders of the Tribunal or special bench of the Tribunal. The ld.DR did not controvert the factual assertions of the ld. counsel for the assessee. Facts in these cases are similar to the facts for AY 2014-15 hence need no elaboration. 4. Now we would deal the cross appeals year wise as under: - 4.1 ITA No.574/Chny/2023 AY 2013-14 (Assessee’s Appeal): The appellant in this appeal has raised three issues viz; Re-opening of assessment, Taxation of notional gain on transaction of assets and liabilities of foreign branch 4 ITA Nos .309, 419, 420 574 661/23 others and Taxation of deferred income on interest rate swaps. If the assessee succeeds on the jurisdictional ground of re-opening, then there is no need to go into the other issues as these will become infructuous. For the reopening of the assessment the necessary facts are as under: 4.2 The assessment originally completed u/s 143(3) was reopened by issue of notice u/s 148 dated 28/03/2019 i.e., after a period of 4 years from the end of the assessment year even when there is no failure on the part of appellant to fully and truly disclose all the particulars required for the purpose of assessment. For the following reasons reopening was done. 1. Taxing the notional gain on translation difference of overseas branches 2. Taxing of deferred income on termination of rupee interest rate swaps and 3. Taxing the gain arising on account of sale of assets to ARC which had already been credited to income and offered to tax 4.3 The appellant submits that as can be seen from the reasons for reopening in respect of the first issue which is given in page 2 of the assessment order, \"As noticed from Schedule 17- Significant accounting policies under item 3.3. As noticed from Schedule 2 Reserves & Surplus IV Revenue and other reserves. It is evident that AO had formed an opinion that income has escapes assessment only based on facts already on record i.e.. from the Annual report filed along with the return of income and which was taken into consideration at the time of original assessment u/s 143(3) and there is no failure on part of appellant to fumish any information that has led to reopening of the assessment. On the second reason given for 5 ITA Nos .309, 419, 420 574 661/23 others reopening, as evident from the reason for reopening given in page 2of the assessment order. \"As noticed from Schedule 18 Note on Account item 5- Rupee Interest rate swap.... It is submitted that here again the AO reopens the assessment based on the information already on record i.e., annual report and hence there is no failure on part of appellant to fumish any information that has led to reopening of the assessment. On the third reason given for reopening the assessment, as can be seen from the reasons given in page3 of the assessment order\" As noticed from Note 13.3, it may again be seen that the reopening is again only based on annual report and hence there is no failure on part of appellant to furnish any information that has led to reopening of the assessment. it is submitted that even AO does not allege that there has been any failure on the part of appellant to fully and truly furnish any information that had led to the reopening of assessment. Since in appellants case the reopening is done after a period of 4 years from the end of the assessment year and there is no failure on the part of appellant to fully and truly disclose all material facts necessary for assessment, as per first proviso to section 147, the entire reassessment proceedings are bad in law and needs to be struck down as invalid. Reliance for the above view is placed on various judicial decisions including the dismissal of SLP by Supreme Court in case of Bajaj Allianz Life Insurance Company Ltd (125 taxmann.com 71) and Jurisdictional Madras High Court in case of Vijayeshwari Textiles Ltd. (121 taxmann.com 29). The assessee’s objection to assumption of jurisdiction by AO is disposed of vide separate order dated 26.08.2019. The ld.CIT(A) in the view of the judgment of the Hon’ble High Court of Bombay in the case of Yuvraj Vs UOI [2009] 315 ITR 84 has 6 ITA Nos .309, 419, 420 574 661/23 others dismissed the ground raised by the assessee challenging the validity of the issuance of notice u/s 148 of the Act. Hence, assessee is in appeal before us. 4.4 At the outset the ld. Counsel for the assessee submitted that in the similar circumstances, the reopening issue decided in favour of the assessee by the Co- ordinate bench of the Tribunal in assessee’s own case in ITA Nos.780 & 781 /Chny/2001 for AYs 1990-91 and 1991-92 dated 24.01.2022 which held as under: ‘’8.1 Even, depreciation (loss on revaluation) of investments as on 31.03.1990 is disclosed at page 59 of assessee’s paperbook. The assessee has also computed ‘Interest on securities on due and realisation basis’ and computed the entire amount which is enclosed in assessee’s paperbook at page 63. We noted that these are sufficient details and sufficient disclosure for framing of assessment because these details were available before AO during original assessment proceedings. Once assessment is framed u/s.143(3) of the Act originally for assessment year 1990-91 and reopening notice dated 04.03.1997, which is beyond 4 years and there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment, the reopening cannot be held to be valid. This proposition is supported by the decision of Hon’ble Supreme Court in the case of CIT vs. Foramer France, (2003) 264 ITR 566, wherein the Supreme Court has affirmed the decision of Hon’ble Allahabad High Court in the case of Foramer France vs. CIT, (2001) 247 ITR 436. The decision of Hon’ble Allahabad High Court, affirmed by Hon’ble Supreme Court, in the case of Foramer France, supra is as under:- 14. Having heard learned counsel for the parties, we are of the view that these petitions deserve to be allowed. 15. It may be mentioned that a new Section substituted Section 147 of the Income-tax Act by the Direct Tax Laws (Amendment) Act, 1987, 7 ITA Nos .309, 419, 420 574 661/23 others with effect from April 1, 1989. The relevant part of the new Section 147 is as follows : \"147. If the Assessing Officer, has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this Section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under Sub-section (3) of Section 143 or this Section has been made for the relevant assessment year, no action shall be taken under this Section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under Section 139 or in response to a notice issued under Sub-section (1) of Section 142 or Section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year.\" 16. This new Section has made a radical departure from the original Section 147 inasmuch as clauses (a) and (b) of the original Section 147 have been deleted and a new proviso added to Section 147. 17. In Rakesh Aggarwal v. Asst. CIT (1997] 225 ITR 496, the Delhi High Court held that in view of the proviso to Section 147 notice for reassessment under Section 147/148 should only be issued in accordance with the new Section 147, and where the original assessment had been made under Section 143(3) then in view of the proviso to Section 147, the notice under section 148 would be illegal if issued more than four years after the end of the relevant assessment year. The same view was taken by the Gujarat High Court in Shree Tharad Jain Yuvak Mandal v. ITO [2000] 242 ITR 612. 18. In our opinion, we have to see the law prevailing on the date of issue of the notice under Section 148, i.e., November 20, 1998. Admittedly, by that date, the new Section 147 has come into force and, hence, in our opinion, it is the new Section 147 which will apply to the facts of the present case. In the present case, there was admittedly no failure on the part of the assessee to make a return or to disclose fully and truly all material facts necessary for the assessment. Hence, the proviso to the new Section 147 squarely applies, and the impugned notices were barred by limitation mentioned in the proviso.” 8 ITA Nos .309, 419, 420 574 661/23 others 8.2 Furthermore, the ld.AR relied on the decision of Hon’ble Madras High Court in the case of CIT vs. RPG Transmissions Ltd., [2014] 48 taxmann.com 57, wherein it was held as under:- “22. We find from the reasons set out in the assessment orders that the assessee has explained an disclosed the entire facts which would constitute a full disclosure and, therefore, we have no hesitation to hold that the reopening of assessment is barred by the proviso to section 147. Further, the facts which emerge from the assessment order as well as the order of Commissioner of Income-tax(Appeals) are well founded and in terms of the principles laid down by the apex court. For the aforesaid reasons, we find that the Tribunal has correctly appreciated the facts in holding that the reopening of the assessment orders are barred by limitation. We find that the Commissioner of Income-tax (Appeals) as well as the Tribunal has concurrently held from the facts that the proviso to section 147 would not apply to the facts of this case and since it is a finding of fact that too which is essentially based on the principles which are gathered from the judgments referred to above, we find that the Assessing Officer has departed from the said principles in arriving at a conclusion that the proviso to section 147 would apply in the instant case. We see no reason to deviate from the finding of fact and, hence, the appeal of the Revenue fails on this ground. Therefore, the first part of the substantial question of law No. 1 in T. C. (A.) Nos. 310 to 312 of 2007 with regard to the invocation of extended period of time under the proviso to section 147 is answered in the affirmative and in favour of the assessee.” 9. In view of the above facts and circumstance of case law of Hon’ble Supreme Court in the case of M/s. Foramer France and Jurisdictional High Court in the case of M/s. RPG Transmissions Ltd., supra, we are of the view that there is no whisper in the reasons recorded that there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment and the assessment was framed u/s.143(3) of the Act and reopening beyond 4 years which is against the provisions of the Act. Accordingly, we quash the reassessment proceedings and allow the appeal of the assessee. 9 ITA Nos .309, 419, 420 574 661/23 others 4.5 From above referred order of the Co-ordinate Bench of Tribunal in assessee’s own case, we also find that the AO had formed an opinion that income has escaped assessment only based on the facts and documents already on record i.e; from the Annual report which was filed with the return of income. During the original assessment proceedings u/s 143(3) these materials were duly available and considered by the AO as the case was selected for scrutiny under CASS. We also find that there is no fresh material came in the possession of the AO to justify re- opening of original assessment made u/s 143(3) of the Act. We have also gone through the reasons as stated in the Assessment order dated 03.12.2019 passed u/s 143(3) r.w.s 147 of the Act that there is no whisper of any allegation that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. Hence, respectfully following the order of Co-ordinate bench of the Tribunal in assessee’s own case in ITA Nos.780 & 781 /Chny/2001 for AYs 1990-91 and 1991-92 dated 24.01.2022, we quash the reassessment proceedings and allow the appeal of the assessee. In result, appeal of the assessee is allowed. 4.5 Therefore, in the light of our above order, the appeal of the revenue in ITA No.309/Chny/2023 AY 2013-14 is become infructuous. Hence, the appeal of the revenue is dismissed as infructuous. 5. ITA No.584/Chny/2023 AY 2015-16 (Assessee’s Appeal): 5.1 In this appeal, the assessee has raised two issues viz; Re-opening of assessment and Taxation of deferred income on interest rate swaps. If the assessee 10 ITA Nos .309, 419, 420 574 661/23 others succeeds on the jurisdictional ground of re-opening, then there is no need to go into the other issue as will become infructuous. For the reopening of the assessment the necessary facts are as under: 5.2 The appellant is a nationalized bank carrying on the business of banking. For the assessment Year 2015-16, the appellant filed its original return of income on 30.11.2015 declaring total income of Rs. 14, 17,79,678/- The assessment was completed u/s 143(3) on 29.12.2017 against which the appellant preferred an appeal to CIT(A) and then to ITAT. Subsequently, AO by issue of notice u/s 148 dated 28.03.2019 reopened the assessment u/s 147 against which the present appeal is filed. The following are the issues involved in the appeal. 5.3 The ACIT reopened u/s 147 the assessment already completed u/s 143(3) by issue of notice u/s 148. The reopening was done based on significant accounting policy and notes forming part of annual report which was already examined at the time of original assessment. The reopening was done to tax unamortized receipts in case of financial assets sold to ARC, amortization of premium on HTM Securities and deferred income on termination of rupee interest rate swaps. The reopening was made based on the return of income or the details furnished at the time of assessment and hence there was no new tangible material based on which the reopening was done. The assessment originally completed u/s 143(3) was reopened by issue of notice u/s 148 dated 28/03/2019. The reasons for reopening are as under:- 11 ITA Nos .309, 419, 420 574 661/23 others 1. Taxing the gain arising on account of sale of assets to ARC which had already been credited to income and offered to tax and 2. disallowance of amortization of premium on HTM investments 3. Taxing of deferred income on termination of rupee interest rate swaps The appellant submitted that as can be seen from the reasons for reopening in respect of the first issue which is given in page 2 of the assessment order, \"(1) Schedule 18- Notes on Account Para No. 13.3- Details of financial assets sold to securitization/Reconstruction company for asset restructuring it was stated as follows....... From the above it is evident that AO had formed an opinion that income has escapes assessment only based on facts already on record i.e.. from the Annual report filed along with the return of income and which was taken into consideration at the time of original assessment u/s 143(3) and there was no new tangible material that has led to reopening of the assessment. 5.4 On the second reason given for reopening, as evident from the reason for reopening, It was noticed from the annual report for the financial year 2014-15 (AY 2015-16) that in schedule 17 significant accounting policies the AO had formed an opinion that income has escapes assessment only based on facts already on record i.e., from the Annual report filed along with the return of income and which was taken into consideration at the time of original assessment u/s 143(3) and there was no new tangible material that has led to reopening of the assessment. 5.5 On the third reason given for reopening the assessment, it was noticed from schedule 18 Notes on Accounts on Interest rate swap, it may again be seen that 12 ITA Nos .309, 419, 420 574 661/23 others the reopening is again only based on annual report and hence there was no new tangible material that has led to reopening of the assessment. 5.6 It is that as evident from above the entire reopening was done based on material already on record and was not based on any new tangible material which came into the possession of AO after completion of assessment u/s 143(3). Therefore, the entire reassessment proceedings are bad in law and needs to be struck down as invalid. Reliance for the above view is placed on various judicial decisions including the Delhi High Court in case of Punjab & Sind Bank ([2019] 108 taxmann.com 351 (Delhi) and SLP filed against the said order was dismissed by Supreme Court reported in [2019) 108 taxmann.com 352 (SC). The assessee’s objection to assumption of jurisdiction by AO is disposed of vide separate order dated 26.08.2019. The ld.CIT(A) in the view of the judgment of the Hon’ble High Court of Bombay in the case of Yuvraj Vs UOI [2009] 315 ITR 84 has dismissed the ground raised by the assessee challenging the validity of the issuance of notice u/s 148 of the Act. Hence, assessee is in appeal before us. 5.7 At the outset the ld. Counsel for the assessee submitted that in the similar circumstances, the reopening issue decided in favour of the assessee by the Co- ordinate bench of the Tribunal in assessee’s own case in ITA Nos.782 & 1991 /Chny/2001 for AYs 1992-93 and 1993-94 dated 15.06.2022 which held as under: ‘’7. The reasons recorded by Ld. AO to reopen the assessment read as under: - 13 ITA Nos .309, 419, 420 574 661/23 others The assessee bank has been maintaining its books of accounts under mercantile basis. However, while admitting the interest on securities for Income Tax purposes, the assessee bank reduced the interest accrued due to profit & loss account and offers the same on receipt basis. In this way, the assessee bank had reduced a sum of Rs.12,66,24,544/- from the total income for the asst year 1991-92. In as much as the assessee offers the interest on securities on receipt basis, the sum of Rs. 12,66,24,544/- reduced from the total income for the asst year 1991-92 should have been offered to tax in the assessment for 1992- 93 on case basis. Failure on the part of the assessee to include such income has resulted in under assessment of income to the extent of Rs.12,66,24,544/-. I have reasons to believe that income chargeable to tax has escaped assessment within the meaning of Sec.147 of the Income Tax Act. Upon perusal of aforesaid reasons, it could be seen that while framing opinion of escapement of income, Ld. AO has not referred to any tangible material coming into the possession of Ld. AO subsequent to the framing of the regular assessment proceedings. It is an allegation that interest on securities have been offered on receipt basis and therefore, the receipts of earlier years as received in this year, was to be offered to tax. 8. It is discernible from records that the original return of income was already scrutinized by revenue u/s 143(3). The assessee, in its computation of income for AY 1992-93 (Page no. 72 to 78 of paperbook) reduced ‘interest on investments in govt. & other securities accrued but not received’ for Rs.1173.77 Lacs. The assessee also added a noted in the computation of income which read as under: - “The interest on securities which is offered to tax under the head “Business” consequent on the amendment to the Income-tax Act, 1961 is accounted and offered to tax under the head “Business”. The cash basis of accounting is continued to be adopted for income-tax purposes as the same basis was adopted from the inception, instead of accrued basis. The cash basis of accounting is regularly followed, notwithstanding the change in the head of income, viz, from ``Interest on Securities\" to Business\". It is evident from the computation of income that the assessee had disclosed full details of its claim in respect of interest accrued but not due in the computation of income furnished along with the return of income. The whole basis of reopening was the aforesaid computation along with notes thereon as furnished by the assessee along with the return of income. In other words, there was no new tangible material before Ld. AO to reopen the case of the 14 ITA Nos .309, 419, 420 574 661/23 others assessee and the reopening was based on existing material already available on record. In such a case, the reopening would become mere review of the order which is impermissible as per the decision of Hon‘ble Supreme Court in CIT V/s Kelvinator of India Ltd. (320 ITR 561). We are of the opinion that the formation of belief has to be on the basis of some fresh tangible material or new information which is not the case here. This being so, reassessment proceedings are liable to be quashed on legal grounds. 9. The aforesaid conclusion also find support from the decision of Hon’ble High Court of Madras in Tanmac India V/s DCIT (78 Taxmann.com 155) wherein reassessment was held to be not justified since the same was sought to be initiated on the basis of return of income and enclosures thereto which was already part of record. Similar is the ratio of decision in Pr. CIT V/s M.R.Narayanan (131 Taxmann.com 280) as well as in CIT V/s RPG Transmissions Ltd. (48 Taxmann.com 57). 10. Considering the ratio of aforesaid binding judicial pronouncements, the reassessment proceedings are liable to be quashed. We order so. The legal grounds urged by the assessee stand allowed. The Ld. AR submitted that in such an eventuality, the issue of computation of deduction u/s 80M would not arise. Concurring with the same, the ground thus raised stand dismissed as infructuous. The appeal stands disposed-off accordingly. 5.8 From above referred order of the Co-ordinate Bench of Tribunal in assessee’s own case, we also find that the AO had formed an opinion that income has escaped assessment only based on the facts and documents already on record i.e; from the Annual report which was filed with the return of income. During the original assessment proceedings u/s 143(3) these materials were duly available and considered by the AO as the case was selected for scrutiny under CASS. We also find that there is no fresh material came in the possession of the AO to justify re- opening of original assessment made u/s 143(3) of the Act. We have also gone through the reasons as stated in the Assessment order dated 03.12.2019 passed u/s 143(3) r.w.s 147 of the Act that there is no whisper of any allegation that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. Hence, respectfully 15 ITA Nos .309, 419, 420 574 661/23 others following the order of Co-ordinate bench of the Tribunal in assessee’s own case in ITA Nos.782 & 1991 /Chny/2001 for AYs 1992-93 and 1993-94 dated 15.06.2022, we quash the reassessment proceedings and allow the appeal of the assessee. In result, appeal of the assessee is allowed. 5.9 Therefore, in the light of our above order, the appeal of the revenue in ITA No.627/Chny/2023 AY 2015-16 is become infructuous. Hence, the appeal of the revenue on the ground of Amortisation of premium of HTM securities is dismissed as infructuous. 6. ITA No.396/Chny/2024 for AY 2015-16 (Revenue’s Appeal): In this appeal, the revenue has raised 3 issues. Being first issue, the revenue has challenged the order of the ld. CIT(A) quashing the notice u/s 148 of the Act etc.. If the revenue fails on the jurisdictional ground of challenging the order of the ld. CIT(A) quashing the notice u/s 148 of the Act then there is no need to go into the other issue on merit as will become infructuous. For the reopening of the assessment the necessary facts are as under: 6.1 Assessee has filed the return of income during the AY 2015-16 on 30-11-2015 declaring total income of Rs 14,17,79,678/- The details of assessment /revision /rectification/reassessment orders passed are as under: Assessment order under section Date of order Assessed income under normal computation 143(3) 29-12-2017 6845,40,31,723 Giving effect to CIT (A) 25-02-2019 3547,72,36,987 16 ITA Nos .309, 419, 420 574 661/23 others 143 r.w.s. 147 03-12-2019 4317,07,57,990 The case was reopened by issue of notice u/s 148 of the Act on 29-03-2021 under a reasonable belief that the income has escaped assessment within the meaning of provisions of section 147 of the Act after recording the reason and obtaining approval of competent authority under section 151 of the Act. The reason recorded for reopening of the case under section 147 of the Act, 1961 is as under:- ‘’The assessee company M/s Indian Overseas Bank is a Scheduled Bank and assessed in the status of company for the purposes of Income Tax Act. It filed its return of income for the AY 2015-16 on 30/11/2015 declaring income of Rs. 14,17,79,678/- under normal provisions (after set off of brought forward loss of Rs. 31,66,36,42,782) and book profits of Rs. 41,13,18,277/- u/s 115JB of the Act. As the tax on the income under normal provisions was more than the tax on the book profits, the same was adopted. The details of the assessment/revision/re-assessment orders passed are as under- Assessment order under section Date of order Assessed income under normal computation 143(3) 29-12-2017 6845,40,31,723 Giving effect to CIT (A) 25-02-2019 3547,72,36,987 143 r.w.s. 147 03-12-2019 4317,07,57,990 17 ITA Nos .309, 419, 420 574 661/23 others In the assessment order dated 03/12/2019 u/s 143(3) rws 147, assessed income was arrived at Rs.4317,07,57,990/- after making disallowances for amortization of income earned from the assets sold to ARCs (Rs.270.20 Crore) & amortization of premium or the investments held in HTM category(Rs.88.37 Crore). Deduction u/s 36(1) (vila) was computed taking into account the additions and disallowances made in the scrutiny/revision/reassessment orders. In the 143(3) rws 147 order dated 03/12/2019, deduction u/s 36(1)(viia) amounting to Rs.2158,14,51,164 was allowed. After the allowance of the above, the brought forward loss of Rs.700,85,74,289/- pertaining to AY2014-15 was set off. The total assessed income was determined as Rs.4317,07,57,990/- (after allowing deduction under section 80G). In this regard, it was stated as under:- ‘’For scheduled banks, allowance of deduction under Section 36(1) (vila) is prescribed under two limbs (i) 7.5% of total income (computed before making any deduction under this clause and Chapter VIA), and (ii) the sum computed representing 10% of aggregate averaged advances of the rural branches. i.e. for the purposes of computing the deduction representing 7.5% of the total income, the brought forward losses is required to be set off and the resultant Gross Total Income should be adopted as the Total Income. However, in the computation of the eligible deduction under the first limb i.e. 7.5% of total income was arrived, without taking into account the brought forward losses of Rs. 700,85,74,289/- set off, which is not correct. This has resulted excess deduction u/s 36(1)(viia). Accordingly, it is submitted that, I have reason to believe, that the income chargeable to tax has escaped assessment for the A.Y 2015-16 and I solicit the approval of Additional Commissioner of Income-Tax for issue of notice u/s 148 for the Assessment Year 2015-16. It is evident from the above facts that the assessee had not truly and fully disclosed material facts necessary for his assessment for the year under consideration thereby necessitating reopening u/s 147 of the Act. It is true that the assessee has filed copy of the annual report and audited P&L Account and balance sheet along with return of income where various information/material were disclosed. However, the requisite full and true 18 ITA Nos .309, 419, 420 574 661/23 others disclosure of all material facts necessary for assessment has not been made as noted above. It is pertinent to mention here that even though the assessee has produced books of accounts, annual report, audited P&L account and balance sheet or other evidence as mentioned above, the requisite materials facts are noted above in the reasons for reopening were embedded in such a manner that material evidence could not be discovered by the AO and could have been discovered with due diligence, accordingly attracting provisions of Explanation 1 of Section 147 of the Act’’. 6.2 The assessee’s objection to assumption of jurisdiction by AO is disposed of vide separate order dated 28.01.2022. Before the ld.CIT(A), the assessee inter-alia submitted that the appellant in its grounds challenged the issuance of the notice u/s 148 of the Act when there was no tangible material available before the AO. Further appellant submitted that the AO used the books of the appellant to arrive at the reasons implying that the material fact was always truly and fully disclosed by the appellant and that the issue of disallowance u/s 36(1) (via) of the Act is a legal and debatable issue and not a factual issue and hence the notice u/s 148 of the Act and subsequent assessment is bad in law and is liable to be quashed. The appellant relied on the order of the Hon'ble ITAT in its own case in ITA 1147/Mds/2008 for the AY 2003-04 which was not taken into account by the AO while framing the assessment. The appellant submitted that the above decision had become final as according to appellant no appeal was preferred against the said order by department to High Court. The submission of the appellant was examined with regard to the challenge of the validity of the notice, as the appellant has stated that it has complied with the notices and participated in the re-assessment proceedings. The notice u/s 148 of the Act was issued after taking the approval of the JCIT dated 19 ITA Nos .309, 419, 420 574 661/23 others 22.03.20221 and the notice was issued on 29.03.2021. The appellant in support relied on the case of Voltas Ltd. Vs. ACIT 141 taxmann.com 127 stressing that the facts relating to the appellant with regard to the A.Y., the issuance of notice u/s 148 of the Act and the purported reasons for reinitiating the proceedings are identical. Therefore, in the light of the above facts and the ratio of the law the notice u/s 148 of the Act and the re-assessment be quashed and also relied upon the order of the Tribunal in its own case for AY 1990-91 and 1991-92 in ITA Nos.780, 781/Chny/2001 dated 24.01.2022 (referred supra). The ld.CIT(A) on the basis of the order of the Tribunal in assessee’s own case for AY 1990-91 and 1991-92 in ITA Nos.780, 781/Chny/2001 dated 24.01.2022 and other decisions allowed the appeal of the assessee and quashed the re-opening proceedings and also disposed of the appeal on merits. Hence, Revenue is in appeal before us. 6.3 At the outset the ld. Counsel for the assessee submitted that in the similar circumstances, the reopening issue decided in favour of the assessee by the Co- ordinate bench of the Tribunal in assessee’s own case for AY 1990-91 and 1991-92 in ITA Nos.780, 781/Chny/2001 dated 24.01.2022. 6.4 From above referred order of the Co-ordinate Bench of Tribunal in assessee’s own case, we also find that the AO had formed an opinion that income has escaped assessment only based on the facts and documents already on record i.e; from the Annual report which was filed with the return of income. During the original assessment proceedings u/s 143(3) these materials were duly available and 20 ITA Nos .309, 419, 420 574 661/23 others considered by the AO as the case was selected for scrutiny under CASS. We also find that this is the third time, the case of the assessee is reopened. We also find that there is no fresh material came in the possession of the AO to justify re- opening of original assessment made u/s 143(3) of the Act. This is a clear case of ‘change of opinion’ which is not permissible to reopen the final original assessment. Hence, respectfully following the order of Co-ordinate bench of the Tribunal in assessee’s own case in AY 1990-91 and 1991-92 in ITA Nos.780, 781/Chny/2001 dated 24.01.2022, we endorse the order of the ld. CIT(A) quashing the reassessment proceedings and dismiss the appeal of the Revenue. In result, appeal of the revenue is dismissed. 7. ITA No.419/Chny/2023 AY 2018-19 (Assessee’s Appeal): The appellant is a nationalized bank. For the AY 2018-19 it filed return of income declaring loss under Normal method at Rs.6629.86 Crores And loss u/s 115JB of Rs.9049.06 Crores. For this assessment year (‘AY’ in short), the following issues are in dispute: 7(i) No draft assessment order passed by AO: The assessee has challenged the order u/s 143(3) r.w.s 144B passed by AO on the ground that the order u/s 143(3) r.w.s 144B dated 30.04.2021 is passed without passing any draft assessment order or without giving an opportunity to the assessee which is contrary to the express provisions of the section 144B(1)(xvi)(b) of the Act. 21 ITA Nos .309, 419, 420 574 661/23 others We find that in similar situation, the Hon’ble Jurisdictional High Court in the case of Devendran Coal International Private Limited Vs ITO & Ors dated 05.09.2023 W.P.No.9420 of 2022 and W.M.P.Nos.9166 & 9168 of 2022 has held as under: 8. In this case, no Draft Assessment Order has been passed by the Assessing Unit as is contemplated under Section 144B of the Income Tax Act, 1961. Thus, there is a material violation of the procedure prescribed under Section 144B of the Income Tax Act, 1961. 9. Consequently, the Impugned Order is set aside and the case is remitted back to the respondents to pass a fresh order on merits and in accordance with law within a period of six (6) months from the date of receipt of a copy of this order. The Impugned Order which stands quashed shall be treated as a Draft Assessment Order/Show Cause Notice for the petitioner to respond to the same. Respondent shall make suitable arrangements in the portal to ensure the petitioner is able to upload the reply by giving prior notice to the petitioner. The respondent shall follow the procedure under Section 144B of the Income Tax Act, 1961. 10. The writ petition stands disposed of with the above observations and directions. No cost. Consequently, connected miscellaneous petitions are closed. Reading from the Hon’ble jurisdictional High Court order wherein the Hon’ble Court has set aside the matter and the case was remitted back to the respondents to pass a fresh order on merits and in accordance with law. We find that at this stage, after a gap of almost 4 years it is not viable for us to remand back the appeal only for the compliance. In the peculiar facts and circumstances of this case, assessee has already been given proper opportunity of hearing to prosecute its case. Both orders are speaking orders and no prejudice has been caused. Hence, in the light of above peculiar facts of this case, we dismiss this ground of the assesee. We further observe that 22 ITA Nos .309, 419, 420 574 661/23 others at the beginning itself, the assessee would have challenged this issue before the Hon’ble High Court in writ petition as done in the case of Devendran Coal International Private Limited Vs ITO & Ors (supra). Hence, we dismiss this ground of the assessee’s appeal. 7(ii) Deduction u/s 36(1)(vii): The appellant had claimed a sum of Rs.8751.17 crores towards bad debts written off. However, based on the explanation 2 to section 36(1)(vii) the AO allowed the deduction at Rs.3903.90 crores after reducing the opening credit balance and disallowed Rs.4847.27 crores. On this issue, the ld. CIT(A) based on his order in ITA No.197/2017-18 dated 31.01.2019 for AY 2015-16, similarly, has directed the AO to verify the genuineness of the claim of the assessee that there is no opening balance in provisions for bad and doubtful debts u/s 36(1)(viia) and recompute the bad debts allowed u/s 36(1)(vii) of the Act. We find from the record that the ld. CIT(A) is right in remitting back the issue to AO for verification the genuineness of the claim of the assessee. Hence, this ground of appeal of assessee is dismissed. 7(iii) Contribution of staff welfare fund: The AO based upon the earlier year, disallowed contribution of Rs.6,69,69,031/- made by the bank to Staff Welfare Fund stating that the fund is not recognized u/s 11 of the Act. However, the assessee contended that the payment was consequent 23 ITA Nos .309, 419, 420 574 661/23 others to a contractual obligation and that recognition of the fund is not the prescribed criteria. We find from the chart submitted; this ground has been decided against the assessee by the co-ordinate bench of the Tribunal in assessee’s own case in ITA Nos.948 & 777 /Chny/2018 for AY 2014-15 which held as under: ‘’9. On the issue of Disallowance of contribution to staff welfare fund, the AR relied on the order of this tribunal in the assessee’s own case in ITA No. 776/Chny/2018 dated 28.02.2019 for assessment year 2013-14 , the relevant portion is extracted as under: “ 8. The next ground raised by the assessee is with Regard to disallowance of contribution to staff welfare fund. The Ld. AR submitted that this issue was decided against the assessee by this Tribunal in its own case for the assessment year 2011-12 in ITA No.77/Mds/2014. 8.1 On hearing both sides, we find that this Tribunal vide order dated 03.04.2017 in ITA No.77/Mds/2014 for the assessment year 2011-12 has decided this issue against the assessee. The relevant portion of the order of this Tribunal, supra, is extracted as under:- “12. The third ground is with regard to disallowance of contribution of staff welfare fund. 13. At the outset, the Ld. AR. submitted that this issue came for consideration before this Tribunal in assessee’s own case in ITA No.2126/Mds/2013(supra). 14. We have heard both the parties and perused the material on record. As rightly pointed out by the Ld. AR this issue was decided against the assessee by the Co- ordinate Bench of Chennai Tribunal in assessee’s own case for assessment year 2010-11 cited supra, wherein Tribunal held that: “67. The next issue in the appeal of the assessee is that Commissioner of Income Tax (Appeals) erred in not allowing deduction in respect of contribution to staff welfare fund overlooking the mandatory requirement of payment as an employer. 68. At the time of hearing, counsel for the assessee submits that this issue has been decided against the assessee by the co-ordinate Bench for the assessment 24 ITA Nos .309, 419, 420 574 661/23 others year 2008-09 in ITA No.1815/Mds/2011 dated 2.4.2013 in para 14 of the order. Respectfully following the said order of this Tribunal, we dismiss the ground of assessee on this issue.” 14.1 Respectfully following the above decision of Tribunal in assessee’s own case for assessment year 2010-11, we reject this ground raised by the assessee.” In view of the above, respectfully following the above order of this Tribunal, we reject the corresponding grounds of appeal of the assessee.” 10. We heard the rival submissions. In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment years, respectfully following it, we reject the corresponding grounds of the assessee. Respectfully following the co-ordinate bench order referred supra we also decide this ground against the assessee. Accordingly, this ground of assessee is dismissed. 7 (iv) Restricting relief u/s 90 to the extent of foreign tax paid instead of tax charged on foreign Income which is included in Taxable Income: The AO did not allow Double Income Tax Relief by way of exclusion of income of foreign branches from chargeability in India based on the Double Tax Avoidance Agreements entered into with respective countries. From chart submitted by the ld. counsel, we find that this ground has been decided against the assessee by the co-ordinate bench of the Tribunal in assessee’s own case in ITA Nos.948 & 777 /Chny/2018 for AY 2014-15 which held as under: ‘’5. On the issue of Restriction of relief u/s. 90 to the extent of tax paid in foreign country instead of tax charged on foreign income which is included in total income, the AR relied on the order of this tribunal in the assessee’s own case in ITA No. 776/Chny/2018 dated 28.02.2019 for assessment year 2013-14, the relevant portion is extracted as under: 25 ITA Nos .309, 419, 420 574 661/23 others “ 6.1 On hearing rival contentions, we find that this issue was decided against the assessee in its own case for the assessment year 2011-12 in ITA No.77/Mds/2014 vide order dated 03.04.2017. The relevant portion of the said order is extracted here under:- 18. The last ground: in this appeal is with. regard to restricting the relief u/s.90 to the extent of tax paid in the foreign country. 19. We have heard both the parties arid perused the material on record. In our opinion, the same issue came for consideration before the co-ordinate Bench of Chennai Tribunal in assesse’s own case for assessment year 2010-11 cited supra, wherein Tribunal held that:- ‘76. Counsel for the assessee submits that this issue has been decided against the assesee by the co-ordinate Bench for the assessment year 2009-10/n 174 No.1949/Mds/2012 dated 18.6.2014 at pages 11 to 13 in paras 21 to 25 of the order, 77. We have perused the said order of this Tribunal and find that the issue has been decided against the assessee holding as under: 21. The seventh substantive ground challenges the ClTA’s order restricting relief 90% of the tax paid in foreign countries 22. Factual backdrop qua this issue is that the assessee had raised a claim of double taxation relief in memo of income from its overseas branches in south Korea, Singapore, Thailand, Sri lanka and Hong Kong amounting to Rs.357,573/- Rs.21,32,37,338/-, Rs.I7,84,71,232, Rs.42,94,845/- and Rs.39,80,57,968/- respectively. Its thrust was upon various Double Taxation Avoidance Agreements DTAAs between India and the said countries except Hong Kong. The Assessing Officer had restricted this relief @ 16.5% Le the prevailing tax rate in Hongkong. Thereafter, he distinguished case law PVAL .Kulandaganchettiarvs CIT, 267 ITR 654 by observing that contrary to the facts of this case, Shri Chéttiar was fiscally domiciled in Malaysia and did not have any permanent establishment in India. On DTM with south Korea, the Assessing Officer was of the view that the 26 ITA Nos .309, 419, 420 574 661/23 others terms contained therein did not give exclusive rate of tax to the concerned country and it had only provided for credit method of relief in double taxation. Accordingly, he declined to accept the assesse’s claim. 23. Coming to the DTMs between India and Singapore, Thailand and Sri lanka, the Assessing Officer observed that they also recognized ‘credit’ method. He alleged the assessee not to have provided any difference in rates of tax in the above stated tax jurisdictions. Simultaneously, the Assessing Officer held that on furnishing details on assessee’s part; the claim would be allowed in its favour. This resulted in disallowance/addition of 55, 65,44,48/-. 24. In lower appellate order, the CIT(A) has quoted a notification No. SO 2123(E) dated 28.8.2008 reported as 304 ITR(St )63, clarifying that in such a case involving a DTAA, an income has to be included in the total receipts and the necessary relief is to be granted by ‘elimination’ method or as per the terms of agreement seeking to avoid double taxation. He relies upon Finance Act, 2012 inserting explanation 3 to section 90 making the notification retrospectively applicable. In this manner, the CIT(A) has directed the Assessing Officer to allow relief to the assessee as per the aforesaid notification. 25. We have heard both parties and gone through the relevant findings in the orders of Assessing Officer as well as the ClT(A). The parties are unanimous before us that this vary issue stands decided in the Revenue’s favour by the ‘tribunal’‘supra) in preceding assessment year. So, we also follow suitand reject the assessee’s relevant grounds.” 78 Respectfully following the said decision, we dismiss the ground raised by the assessee on this issue.” 6.2 In view of the above findings of this Tribunal, we find no reason to interfere with the order of the Ld. CIT(A) on this issue and reject the grounds raised by the assessee.” 6. We heard the rival submissions. In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment years, respectfully following it , we find no reason to interfere with the 27 ITA Nos .309, 419, 420 574 661/23 others order of the Ld. CIT(A) and hence reject the corresponding grounds of the assessee’’. In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment years, respectfully following the co-ordinate bench order referred supra we also reject and decide this ground against the assessee. Accordingly, this ground of assessee is dismissed. 7 (v) Depreciation on goodwill: The AO disallowed depreciation on goodwill amounting to Rs.6,16,99,643/- by not taking into the decision of the Hon’ble Apex Court in Smifs Securities (348 ITR 302 SC). The ld. Counsel for the assessee from chart submitted that this ground has been decided against the assessee by the co-ordinate bench of the Tribunal in assessee’s own case in ITA Nos.948 & 777 /Chny/2018 for AY 2014-15 which held as under: ‘’7. On the issue of Depreciation on Goodwill, the AR relied on the order of this tribunal in the assessee’s own case in ITA No. 776/Chny/2018 dated 28.02.2019 for the assessment year 2013-14 , the relevant portion is extracted as under: 7. The next issue raised by the assessee is with regard to denial of depreciation on goodwill and the Ld. AR submitted that the Bank had during the year ended 31.01.2010 taken over assets &liabilities of Shree Suvama Sahakari Bank Ltd. The excess of Liabilities over Assets amounting to Rs.246,52,02,148/- has been treated as Goodwill, Depreciation on the said amount of Goodwill based on the WDV as on 01.04.2012 of Rs. 26,00,01,789/- has been claimed as deduction based on the decision of Supreme Court in the case of CIT vs Smift Securities Ltd (Civil Appeal No.5961 of 2012 (Arising out of SLP (c) No.35600 of 2009) dated 22.08.2012.The AO rejected this claim on the following reasons: 28 ITA Nos .309, 419, 420 574 661/23 others “As held by the assessee, assessee has taken over the specific asset and liabilities of M/s.Shree Swatna Sahakari Bank Ltd as existing as on 19.05.2009 as per the approval of RBI. Accordingly it resulted in excess of liabilities over assets absorbed on account of absorption scheme of RB1. The liabilities are balance sheet entries and same will be considered as and when incurred or paid as per the provisions of IT Act. Considering such liabilities as good will is neither justifiable nor based on any prudent accounting norms/methods of due diligence. Assessee’s contention is devoid of merits and support of law. • As per the definition of the goodwill as made in the provisions of IT Act the same is read as under:- From the above it is clear that the assessee merely equated excess liabilities as attributable to goodwill on account of absorption scheme In fact it is opposite to the goodwill as defined in the IT Act as above and same do not qualify asset leave alone intangible asset as it is a liability. Hence assessee’s contention to that liability. Hence assessee’s contention to treat liability as an intangible asset if far stretched and contrary to the provisions of IT Act in latter and spirit. Assessee was requested to reconcile the good will as reflected in the books of the absorbed concern i.e. M/s Shree Swarna Sahakari Bank Ltd as appearing in their block of assets prior to its absorption. Hence assessees notional working of goodwill based on excess liabilities is not allowable as intangible asset qualified under good will. • Any absorption scheme surplus of asset over liabilities has to be taken to reserves account of balance sheet. Subsequent to absorption as held by Hon’ble ITAT in the case of Spencer and Company Ltd of ITAT vide ITR No.440 of 2011. On similar analogy the surplus of liabilities over assets has to be taken to the balance sheet and same has no bearing on Profit and Loss account of assessee as it tantamount to skewed representation of profits on the year of absorption so as to avoid genuine taxes due to exchequer.” 29 ITA Nos .309, 419, 420 574 661/23 others 7.1 The Ld. AR invited our attention to the copy of Memorandum of Understanding for the proposed transferor dated 17.02.2009 and to the Schedule to the MoU and submitted that as per the MoU, liabilities to be taken over as on 31.12.2008 was valued at I1,078.13 crores and the assets to be taken over as on 31.12.2008 was valued at I870.58 crores and the resultant deficit of I207.55 crores was notionally treated as purchase consideration and argued that on this amount the assessee claimed depreciation. In support of his contention, he relied on the judgement of the Hon’ble Supreme Court in the case of Smifs Securities Ltd.(348 ITR 302) dated 22.08.2012. 7.2 Per contra, the Ld. DR invited our attention to para 12 of the Memorandum of Understanding, which is extracted as under: “12. Regarding Goodwill:-Since the business of Transferor Bank is under moratorium from 14/09/2006, the Transferor Bank does not enjoy any goodwill in commercial terms. Accordingly, no monetary consideration is provided for goodwill.” and submitted that as per the agreement, it is clear the transferor bank does not enjoy any goodwill in commercial terms and hence, there is no goodwill. The Ld. DR further invited our attention to the following portion of the judgement of the Hon’ble Supreme Court in the case of Smifs Securities Ltd.(348 ITR 302) : “Assessing Officer, as a matter of fact, came to the conclusion that no amount was actually paid on account of goodwill. This is a factual finding. The Commissioner of Income Tax (Appeals) [“CIT(A)’, for short] has come to the conclusion that the authorised representatives had filed copies of the Orders of the High Court ordering amalgamation of the above two Companies; that the assets and liabilities of M/s. YSN Shares and Securities Private Limited were transferred to the assessee for a consideration; that the difference between 30 ITA Nos .309, 419, 420 574 661/23 others the cost of an asset and the amount paid constituted goodwill and that the assessee Company in the process of amalgamation had acquired a capital right in the form of goodwill because of which the market worth of the assessee-Company stood increased. This finding has also been upheld by Income Tax Appellate Tribunal [‘ITAT, for short]. We see no reason to interfere with the factual finding” and submitted that the decision of the Supreme Court is distinguishable on facts of the assessee’s case. In the reported case, the assets and liabilities of M/s. YSN Shares and Securities Private Limited were transferred to the assessee for a consideration; that the difference between the cost of an asset and the amount paid constituted goodwill and that the assessee- Company in the process of amalgamation had acquired a capital right in the form of goodwill because of which the market worth of the assessee-Company stood increased. This finding has also been upheld by Income Tax Appellate Tribunal. However, in the assessee’s case, there is a deficit or loss of Rs.207.55 crores in the purchase consideration. Further, as per transfer agreement extracted, supra, itself it is clear that the transferor bank does not enjoy any goodwill in commercial terms and hence, there is no goodwill. When there is no goodwill and the assessee has also not paid any amount for goodwill it is not entitled to claim any goodwill, consequently no depreciation can be allowed. 7.3 We heard rival submissions and gone through relevant material. It is clear from the above that the assessee did not have any goodwill in commercial terms as it has acquired more liabilities than the assets. The Ld.DR’s submission that when there is no goodwill as per the terms of the agreement as well as in reality. When the assessee has not paid any amount for the goodwill, it cannot claim existence of any goodwill. When there is no existence of goodwill, it is not entitled for any depreciation. Therefore, the assessee’s corresponding grounds fail.” 8. We heard the rival submissions. In view of the above findings of the Tribunal in the assessee’s own case in the earlier assessment 31 ITA Nos .309, 419, 420 574 661/23 others years, respectfully following it, we reject the corresponding grounds of the assessee. In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment years, respectfully following the co-ordinate bench order referred supra we also reject and decide this ground against the assessee. Accordingly, this ground of assessee is dismissed. 7 (vi) Provision for leave salary: The AO disallowed the claim of assessee in respect of provision made for leave salary based on actuarial valuation amounting to Rs.88.33 Crore. Assessee contended that the AO failed to appreciate that the provisions of section 43B are not applicable for the above provision since it is neither a statutory liability nor a contractual liability. The ld. Counsel fairly conceded that this issue of provision for leave salary has already been decided against the assessee by the co-ordinate bench of the Tribunal in assessee’s own case in ITA Nos.948 & 777 /Chny/2018 for AY 2014-15 dated 20.01.2020 which held as under: “23. On the issue of disallowance of provision for leave encashment, the ld DR presented the case on the lines of grounds of appeal. Per contra, the ld AR relied on the orders of this tribunal in the assessee’s own case in ITA No. 947/Chny/2018, dated 28.02.2019, for assessment year 2013-14, the relevant portion is extracted as under: “15. The next ground raised by the Revenue is against the disallowance of provision made for leave salary on actuarial valuation. With regard to the issue on leave salary, the AO held that it is only a provision and hence disallowed. Aggrieved, the assessee filed an appeal before the Ld. CIT(A) and the Ld. CIT(A) allowed the appeal based on this Tribunal’s decision in assessee’s 32 ITA Nos .309, 419, 420 574 661/23 others case for assessment year 2010-11 in ITA No.2031/Mds/2013 dated 26.09.2014. Before us, the assessee submitted that the provision for leave salary cannot be disallowed u/s. 43B for the reason that leave provision is a contractual liability and therefore, it cannot be treated at par with tax, duty, cess or fee u/s. 43B. However, in the SLP (Civil) Nos. 22889/2008 dated 08.05.2009 in the case of CIT &ors. Vs M/s. Exide Industries Ltd & ANR, wherein, the Apex Court held that “ pending hearing and final disposal of the Civil Appeal, Department is restrained from recovering penalty and interest which has accrued till date. It is made clear that as far as the outstanding interest demand as of date is concerned, it would be open to the Department to recover that amount in case Civil Appeal of the Department is allowed. We further make it clear that the assessee would, during the pendency of this Civil Appeal, pay tax as if section 43B(f) is on the statute Book but at the same it would be entitled to make a claim in its returns.” In view of the above, subject to the conditions imposed by the Apex Court, supra, the addition made is sustained.” 24. We heard the rival submissions. In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment year, respectfully following it, the addition is sustained’’. In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment year, respectfully following it we also sustain the addition. Accordingly, this ground of assessee is dismissed. 8. ITA No.524/Chny/2023 AY 2018-19 (Revenue’s Appeal): 8 (i) Deduction u/s 36(1)(viia) based on advance outstanding and not on incremental advances: The AO restricted the deduction to Rs.422.420 crores as against Rs.1408.41 crores claimed by the assessee, by wrongly considering the incremental advances of rural branches instead of the advances outstanding at the end of each month. Before us, the ld. Counsel for the assessee submitted that this issue has been 33 ITA Nos .309, 419, 420 574 661/23 others allowed in favour of assessee by the co-ordinate bench of the Tribunal in assessee’s own case in ITA Nos.948 & 777 /Chny/2018 for AY 2014-15 which held as under: ‘’17. On the issue of deduction u/s. 36(1)(viia) based on advances outstanding and not on incremental advances, the ld DR presented the case on the lines of grounds of appeal . Per contra, the ld.AR relied on the orders of the Calcutta High Court in the case of Uttarbanga Kshetriya Gramin Bank in ITA No. 76/Kol/2016 and the assessee’s own case in ITA No. 947/CHny/2018 dated 28.02.2019, the relevant portion is extracted as under: “13. With regard to the claim that the deduction u/s 36(1)(viia) needs to be calculated based on the incremental advances for each month and not on the outstanding advance as on the last day of the relevant month, the Ld. DR submitted on the lines of grounds of appeal. Per contra, the Ld.AR submitted that this issue was decided by this Tribunal in favour of the assessee in ITA No.77/Mds/2014 vide order dated 03.04.2017. The relevant portion of the said order of this Tribunal is extracted as under:- “Next we take up Revenue’s appeal in ITA.No.35/Mds/2014 The first issue in the appeal of the Revenue is that commissioner Tax (Appeals) erred in directing the Assessing Officer to the aggregate average advances outstanding at the end of each month and not the incremental advances granted during each month while computing deduction under section 36(i)(viia) of the Act. 22. We have heard the submissions of the Counsel and perused the material on record. In our opinion, this issue is squarely covered by the decision of the Co- ordinate Bench of Chennai Tribunal in assessee’s own case in 1TA No.2O3l/Mds/2013 for assessment year2010-11 wherein held that “80. At the time of hearing counsel for the assessee submits that the present issue has been decided in favour of the assessee by this Tribunal for the assessment year 2009-10 in ITA No. 1949/Mds/2012 dated 18.6.2014 at pages 24 to 26 in pares 55 to 59 of the order. He places reliance on the said order. Departmental 34 ITA Nos .309, 419, 420 574 661/23 others Representative relies on the order of the Assessing Officer. 81. Similar issue has been raised by the Revenue in ITA No.2030/Mds/2013 for the assessment year 2007-08 and we have dealt with this issue in para 51 & 52 of this order. For the reasons mentioned therein and the decision holds good for the assessment year 2010-11, we reject the grounds raised by the Revenue on this issue.” 22.1 In view of the above Order of Tribunal in the appeal of Revenue, we dismiss the ground raised by the Revenue. Respectfully following the above decisions, the grounds of the Revenue are dismissed.” Respectfully following the above decisions, the grounds of the Revenue are dismissed.” 18. We heard the rival submissions. In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment years respectfully following it, we reject the corresponding grounds of the Revenue’. However, the counsel for the assessee fairly conceded that Hon’ble jurisdictional High Court decided this ground partly in favour of assessee in the case of City Union Bank [TCA 961 of 2010] Para 10.2-12 which reads as under: ‘’10.2 Similarly, the second issue relating to deduction of Rs.8.53 crores u/s 36(1)(viia) with regard to the provision for bad and doubtful debts, is covered by the decision in Principal Commissioner of Income Tax, Jalpaiguri v. Uttarbanga Kshetriya Gramin Bank [(2018) 94 taxmann. Com 90 (Calcutta), in favour of the assessee and the relevant passage of the same is usefully extracted below: “6. Mr. Nizamuddin, learned advocate appeared on behalf of the Revenue and submitted the amended direction made by the Tribunal on the ITO has resulted in the assessee getting double deduction which is not permissible on computation made under Rule 6ABA. He submitted a double deduction in the manner thus obtained by the assessee has not been expressly provided. He relied on a judgment of the Supreme Court in the case of Escorts Ltd. v. Union of India reported in (1993) 199 ITR 43, on the 35 ITA Nos .309, 419, 420 574 661/23 others following portion in the said judgment appearing in page 64 of the report. “A double deduction cannot be a matter of inference, it must be provided for in clear and express language, regard being had to its unusual nature and its serious impact on the revenues of the State.“ 7. Mr. Khaitan, learned senior Advocate appeared on behalf of the assessee and submitted that the computation to be made as prescribed by Rule 6ABA is for the purpose of fixing the limit of the deduction available under section 36(1)(viia). Clause (a) and (b) in Rule 6ABA cannot be given the restricted interpretation. The amount of advances as outstanding at the last day of each month would be a fluctuating figure depending on the outstanding as increased or reduced respectively by advances made and repayments received. The assessee might provide for bad and doubtful doubts but the deduction would only be allowed at the percentage of aggregate average advance, computation of which is prescribed by Rule 6ABA. 8. We find from the amended direction made by the Tribunal that such direction is in terms of Rule 6ABA. The ITO has made the computation of aggregate monthly advances taking loans and advances made during only the previous year relevant to assessment year 2009-10 as confirmed by CIT (A). The Tribunal amended such direction, in our view, correctly applying the rule. 9. For the reasons aforesaid we do not find the questions suggested to be substantial questions of law involved in the case. As such the application and appeal are dismissed. “ 11. This court has no disagreement with the legal proposition laid down in the aforesaid decisions. However, in the present case, though there was no double deduction, as alleged by the appellant / Revenue, there was no clear vision about the advances made by the rural and non-rural branches of the bank and the quantum of deduction was not properly determined by the assessing officer based on the materials furnished by the respondent / assessee. In this context, the relevant paragraphs of the assessment order dated 31.03.2006 passed by the assessing officer are quoted below: “5.3 When the assessee was asked to clarify whether the advances which were considered to be bad and 36 ITA Nos .309, 419, 420 574 661/23 others doubtful in earlier years and for which the provision was made so as to claim deduction under section 36(1)(viia) of the Act, have been recovered subsequently, it was stated that as the provision claimed was not with reference to any particular debt due to the assessee but on an overall basis, it is not possible to certify that the bad debts claimed as trading loss for deduction u/s 36(1)(viia) was recovered or not. It was also stated that the assessee would not be able to give age-wise details of outstanding advances for the branches more so for the rural branches with reference to which the deduction was claimed, so as to determine whether any advance of earlier year for which provision was made is still outstanding. 5.4. In other words, the assessee is not in a position to give details of the advances with reference to which the deduction of Rs.14.99 crores was allowed as per Annexure 2 as deduction under section 36(1)(viia) towards unknown and anticipated trading loss by virtue of mere provision made on adhoc basis for bad and doubtful debts and to confirm that these advances were still outstanding as at the end of the previous year relevant to this accounting year.” “6.3.1. Therefore due to assessee’s inability to relate the provision to any particular advance of a branch, it cannot be said whether it is a provision for rural advance or for non-rural advance so as to examine the monetary limit prescribed under section 36(1)(viia) for allowing deduction thereunder. Then such provision is only reserve for bad debts and not provision for bad and doubtful debts. Though the provisions of section 36(1)(viia) may be understood as a beneficial provision to the assessee company to claim deduction even in respect of reserve created by it to meet certain anticipated loss or contingency due to default of its debtors whom the assessee may not be able to easily identify at the end of the previous year, yet the computation machinery for determining the deduction admissible in the matter of write off bad and doubtful debts of rural or non-rural advance u/s 36(1)(v) read with the proviso thereunder and section 36(2)(v) of the Act would fail.” Thus, it is evident from the above extract that the quantum of deduction arrived at by the assessing officer was not based on the documents produced by the respondent / assessee. The CIT(A) as well as the Tribunal also, did not look into those aspect, while allowing the deduction claimed by the respondent / assessee. Therefore, this court is of the opinion that for that limited purpose, 37 ITA Nos .309, 419, 420 574 661/23 others the matter has to be re-examined by the assessing officer and the same has also been agreed upon by the learned counsel appearing for both sides. 12. In such view of the matter, the order of the Tribunal, which is impugned herein, is set aside and the matter is remitted to the assessing officer for quantification of the deduction allowable to the respondent. The assessing officer shall complete the said exercise, after providing due opportunity to the respondent for submission of both oral and documentary evidence, if any, and pass appropriate orders, on merits and in accordance with law, within a period of three months from the date of receipt of a copy of this judgment’’. Therefore, respectfully following the Hon’ble jurisdictional High Court in the case of City Union Bank judgment referred supra we also remit this issue to AO for quantification of the deduction allowable. The AO is directed to proceed with the quantification of the deduction as per the judgment of the Hon’ble jurisdictional High Court delivered in the case of City Union Bank referred supra and shall complete the said exercise, after providing due opportunity to the respondent. Accordingly, this ground of revenue is allowed for statistical purposes. 8(ii) Recovery in respect of bad debts written off relating to rural branches: The AO held that the appellant has not filed evidences to prove that this sum was already taxed in the earlier years. The appellant submitted that orders for the earlier years are available with the revenue wherein the bad debts written off of the rural branches have never been allowed by the revenue hence no need to file evidences. 38 ITA Nos .309, 419, 420 574 661/23 others As stated by the ld. Counsel for the assessee that this issue has been allowed in favour of assessee by the co-ordinate bench of the Tribunal in assessee’s own case in ITA Nos.948 & 777 /Chny/2018 for AY 2014-15 which held as under: ‘’11. On the issue of Recovery in respect of bad debts written off relating to rural branches viz ground nos 5.1 & 5.2, the AR relied on the order of this tribunal in the assessee’s own case in ITA No. 776/Chny/2018 dated 28.02.2019 for assessment year 2013-14 , the relevant portion is extracted as under: “9. The next ground raised by the assessee is with regard to recovery of bad debts written off relating to rural branches. The Ld. AR submitted that this issue was decided in favour of the assessee by this Tribunal in ITA No35/Mds/2014vide order dated 03.4.2017. 9.1 Heard the rival submissions and perused the order of this Tribunal in ITA No.35/Mds/2017 dated 03.04.2017. The relevant portion of the order of this Tribunal, supra is extracted here under:- 27. The Fifth ground is with regard to addition towards bad debts recovered. 27.1 After hearing both the parties, the same issue came for consideration before this Tribunal in ITA No.1949/Mds./2012 vide order dated 18.06.2014 in assesse’s own case wherein the Tribunal held that: “52. Relevant facts qua this ground are that in Rs memo of income, the assessee is stated to have claimed deduction towards bad debts recovered. It explained before the Assessing Officer that this amount pertained to rural advances written off but not allowed in various preceding assessment years. It stressed the fact that when bad debts itself had been disallowed as deduction, recovery thereof could not have been taxed in the Impugned assessment year. The Assessing Officer held that the assessee had ordinarily claimed the above bad debts written off as expenditure. Further, he observed that it had a/so fifed appeals before the ‘tribunal’ and the issue was yet to attain finality. Accordingly, he disallowed the aforesaid amount. 53. In lower appellate order, the CIT(A) holds that the recovery made in respect of bad debts could be 39 ITA Nos .309, 419, 420 574 661/23 others taxed only if the bad debts themselves are allowed as a deduction by quoting section 41(4) in support. He disagrees with the Assessing Officer after expressing an opinion that when the bad debts written off had not been allowed as a deduction, the same cannot be taxed again. Therefore, the Revenue has raised the instant ground. 54. We have heard both parties and gone through the orders of Assessing Officer and CIT(A). Even the Revenue does not dispute that the assessee had raised its claim of deduction of bad debts relating to the very sums in preceding assessment years. The Assessing Officer did not allow this relief in relevant previous year, when it has recovered the aforesaid debts, the Revenue is again seeking to tax the same. There is no cogent evidence before us to dispute this factual position Moreover, the CIT(A) has cited section 41(4) of the Act whilst granting relief. The Revenue has failed to point out any legal or factual error in CIT(A)’s findings Therefore, the same are affirmed. However, as a matter of caution, we observe that the assessee’s claim of bad debts pertaining to those sums in preceding assessment years, if any, shall be deemed to have been dismissed. With these observations, the Revenue’s ground is rejected.” In view of the above Order of Tribunal, we dismiss the ground raised by the Revenue. Further, we make it clear that if it is allowed as bad debt in earlier years and recovered the same in the assessment year under consideration to be treated as income of assessee.” 9.2 Respectfully following the above order of this Tribunal, we allow these grounds of the assessee subject to the above lines. ” 12. We heard the rival submissions. In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment years, respectfully following it, we allow the corresponding grounds of the assessee. In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment years, respectfully following the co-ordinate bench order 40 ITA Nos .309, 419, 420 574 661/23 others referred supra we also allow and decide this ground in favour of assessee and against the revenue. Accordingly, this ground of revenue is dismissed. 8(iii) Disallowance under section 14A read with Rule 8D: The assessee argued that the AO failed to appreciate that since exempt income were received from securities which were held as stock in trade therefore, Rule 8D read with section 14A(2)(3) could not have been invoked. The ld.CIT(A) relied upon the judgment of the Hon’ble Supreme Court in the case of Maxopp Investment [402 ITR 640 SC] and held that the dominant intention will not be relevant for determining disallowance u/s14A hence upheld the disallowance. We find from chart submitted, this ground has been partly decided in favour of assessee by the co-ordinate bench of the Tribunal in assessee’s own case in ITA Nos.948 & 777 /Chny/2018 for AY 2014-15 which held as under: ‘’21. On the issue of Disallowance u/s. 14A, the ld DR presented the case on the lines of grounds of appeal. Per contra, the ld AR relied on the orders of this tribunal in the assessee’s own case in ITA No. 947/Chny/2018 dated 28.02.2019 , the relevant portion is extracted as under: “14. The next ground raised by the Revenue is against the disallowance under section 14A. The Ld. DR submitted on the lines of grounds of appeal. However, the Ld AR submitted that this issue was decided in favour of the assessee by the Hon’ble Supreme Court in the case of Maxopp Investment Ltd (402 ITR 640) and this Tribunal in ITA No.77/Mds/2014 vide order dated 03/04/2017 decided partly in the assessee’s favour in its own case. The relevant portion of the order of this Tribunal dated 03.04.2017 is extracted as under:- 8. The second ground is with regard to disallowance u/s.14Ar.w.Rules 8D of the Income Tax Rules, 1962. 9. At the outset, the Id.A.R submitted that this issue came for consideration before this Tribunal in assessee’s own case in IT.A.No.2126/Mds/20 13(supra) wherein the Tribunal held that: 63. Counsel for the 41 ITA Nos .309, 419, 420 574 661/23 others assessee submits that assessee bank is holding securities as stock-in-trade, when once securities are held as stock-in trade, no disallowance under section 14A is warranted. The counsel submits that co-ordinate Bench of this Tribunal decided similar issue for the assessment year 2009-10 in ITA No.1949/Mds/2012 dated 18.6.2014. Referring to the said order, counsel submits that In principle, the Tribunal decided the issue in favour of the assessee holding that provisions of section 14A have no application when the securities are held as stock-in-trade. However, the Tribunal remitted the matter to the file of the Assessing Officer to ascertain whether securities are held as stock-in trade. 64. Departmental Representative places reliance on the orders of lower authorities in invoking provisions of section 14A read with Rule 8D for the purpose of disallowing expenditure attributable for earning dividend income. 65. We have perused the order of co-ordinate Bench of this Tribunal for the assessment year 2009-10, wherein the Tribunal held that authorities below have wrongly invoked section 14A in case of investments held as stock-in-trade. While holding so the Tribunal observed as under:‘15. We have considered the rival contentions, perused the relevant findings and the judicial precedents undisputedly, the assesse had earned income of 21 crores from investments made in mutual funds and equities. Its stand adopted throughout has been to have held the investments as ‘stock-in- trade’. There is no finding on this issue forthcoming either from the Assessing Officer or the CIT(A). We have also perused the ‘guard’ fife pertaining to l.T.A.No. 1815/Mds/2011 decided on 2.4.2013(supra). It is evident there from that the very disallowance stands upheld by a co-ordinate bench. Its plea challenging applicability of section 14A in case of investment held as ‘stock-in trade’ appears to have neither been raised nor adjudicated. So, we treat it as a fresh plea not covered by the earlier order. Thus, the new issue that arises for our consideration is as to whether a disallowance u/s 14A can be made even in a case when the investments giving rise to an ‘exempt’ income are held as ’stock-in trade’ or not. Proceeding on the same, we find that the case law quoted by the assessee (supra) squarely supports its plea. The Revenue has brought to our notice a recent Third Member decision in case of D.H. Securities P. Ltd vs DCIT (2014] 31 (Trib) 381. This decision follows the judgment of the hon’ble 42 ITA Nos .309, 419, 420 574 661/23 others Bombay high court (which is also the concerned jurisdictional high court) in case of Godrej & Boyce Manufacturing Co. Ltd vs A CIT, 328 ITR 81 and that of hon’ble Calcutta high court in Dhanuka & Sons vs CIT, 339 ITR 319. Not only this, the hon’ble Third Member also refers to the case law CC! Ltd.(supra) and expresses a view that the aforesaid decisions of other hon’ble high courts were not brought to the notice of the Karnataka high court. In these circumstances, the picture that emerges is that various high courts have expressed divergent opinions on this legal issue. That being the case, we apply the decision of CIT vs Vegetable Products Ltd 88 ITR 192 and in the view favourable to the assessee is followed. So, in principle, we hold that the authorities below have wrongly invoked section 14A in case of investments held as ‘stock-in trade’ wherein the ‘exempt’ income by way of dividends is only incidental. It is also made clear that since there is no verification of the factual position of investments held as ‘stock-in-trade’, we accept the assessee’s contentions in principle only and remit the issue back to the Assessing Officer to determine the true factual position. The assessee’s alternative plea carries only an academic significance. The relevant ground is accepted for ‘statistical purposes.” 66. Since the facts and circumstances are identical, following the said decision of this Tribunal, we allow the ground raised by the assessee.” 10. On the other hand, the ld.D.R relied on the orders of the lower authorities in invoking the provisions of the section 14A r.w.Rule 8D He further submitted for assessment year 2008-09, the same issue was decided against the assessee. 11. We have heard both the parties and perused the material on record. We have gone through the order of the assessment order. There is no finding in the assessment order regarding treatment of exempted income yielding assets as stock-in-trade. Hence, in our opinion, if it is treated as stock-in-trade by the assessee, then the claim of assessee is to be allowed in terms of Order of Tribunal in ITA No.2126/Mds./2013 (supra). Accordingly, this issue is remitted to the file of AO for fresh consideration. This ground is allowed for statistical purposes. In view of the above reasoning of this Tribunal, following it , we remit this issue back to the file of AO for fresh consideration. This ground is allowed for statistical purposes. 43 ITA Nos .309, 419, 420 574 661/23 others ” 22. We heard the rival submissions. In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment year, respectfully following it, we remit this issue back to the file of the AO for fresh consideration. This ground is treated as allowed for statistical purposes. Respectfully following the co-ordinate bench order referred supra, we remit this issue back to the file of the ld. Assessing Officer for fresh consideration. Accordingly, this ground of revenue is allowed for statistical purpose. 8(iv) Depreciation on UPS at 60%: The AO disallowed depreciation claimed on UPS on the contention that UPS is not an energy saving device and only a part of general plant and machinery. Before us, fairly stated by the ld. Authorized Representative for the assessee that this issue has been decided against the revenue by the co-ordinate bench of the Tribunal in assessee’s own case in ITA Nos.948 & 777 /Chny/2018 for AY 2014-15 which held as under: ‘’13. On the issue of Depreciation on UPS allowed at 60% instead of 80%, the AR relied on the order of this tribunal in the assessee’s own case in ITA No. 776/Chny/2018 dated 28.02.2019 for assessment year 2013-14, the relevant portion is extracted as under: “10. The next ground raised by the assessee is with regard to depreciation on UPS allowed at 60% instead of 80% claimed by the assessee. The Ld. AR submitted that this issue was decided against the assessee by this Tribunal in ITA No,77/Mds/2014 dated 3.4.2017 for the assessment year 2011-12. 15. The fourth ground in this appeal is with regard to disallowing the claim of depreciation on UPS at 80% overlooking the fact that UPS is an energy saving device entailing for higher depreciation. 16. At the time of hearing, the Id.A.R submitted that this issue came for consideration before this Tribunal in assessee’s own case in I.T.A.No.2l26/Mds/2013(supra) and the Tribunal decided the issue against the assessee. 44 ITA Nos .309, 419, 420 574 661/23 others 17. We have heard both the parties and perused the material on record. As rightly pointed out by the ld.A.R, this issue was decided against the assessee by the Coordinate Bench of Chennai Tribunal in assesse’s own case for assessment year 2010-11 cited supra, wherein Tribunal held that: “69. The next issue in the grounds of appeal of the assessee is that Commissioner of Income Tax (Appeals) erred in confirming the order of the Assessing Officer disallowing the claim of depreciation on UPS at 80% overlooking the fact that UPS is an energy saving device entailing for higher depreciation. 70. Counsel for the assessee submits that this issue has been decided against the assessee by the co-ordinate Bench for the assessment year 2009-10 in ITA No.1949/Mds/2012 dated 18.6.2014 at pages 10 & 11 in para 16 to 18 of the order. Respectfully following the said decision, we dismiss the grounds raised by the assessee on this issue.” Respectfully following the above decision of Tribunal in assessee’s own case for assessment year 2010-11, we reject this ground raised by the assessee.” In view of the above reasoning of this Tribunal, we reject this issue raised by the assessee.” 14. We heard the rival submissions. In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment years, respectfully following it, we reject the corresponding grounds of the assessee. Respectfully following the co-ordinate bench order referred supra we also reject and decide this ground against the revenue. Accordingly, this ground of revenue is dismissed. 8.(v) Depreciation on ATM: The AO disallowed excess depreciation claimed on ATM on the contention that ATM is not a computer and is only a part of general plant and machinery. The ld. counsel pointed out that the issue of depreciation on ATM has been decided in favour of 45 ITA Nos .309, 419, 420 574 661/23 others assessee by the co-ordinate bench of the Tribunal in assessee’s own case in ITA Nos.948 & 777 /Chny/2018 for AY 2014-15 which held as under: ‘’15. On the issue of depreciation on ATM, the AR relied on the order of this tribunal in the assessee’s own case in ITA No. 776/Chny/2018 dated 28.02.2019 for assessment year 2013-14, the relevant portion is extracted as under: “11. The next ground raised by the assessee iswith regard to the depreciation on ATM. The Ld. AR submitted that this issue was decided in favour of the assessee by the Hon’ble Bombay High Court in the case of CIT Vs.Saraswat Infotech Ltd. in ITA(L) No.1243 of 2012. On hearing both sides, we find that the Hon’ble Bombay High Court in the above cited case has held as under:- 5) In second appeal, the Tribunal by its order dated 14.03.2012 held that UPS is an integral part of the computer system and regulate the flow of power to avoid any kind of damage to the computer network due to fluctuation in power supply which could lead to loss of valuable data. The Tribunal relied upon the decision of Delhi High Court dated 20/1/2011 in the matter of CIT Vs. Orient Ceramics & Industries Ltd in which UPS was held to be the part of the computer system and depreciation at 60% was allowed. Similarly, so far as ATMs are concerned, the Tribunal on finding of fact concluded that ATM cannot function without the help of computer and would be a part of the computer used in the banking industry. Reliance was placed by the Tribunal upon the decision of the Delhi Bench of Tribunal in the matter of DCIT v. Global Trust Bank (ITA No.474/D/09) wherein it has been held that ATM was a computer equipment and depreciation @ 60% was allowed. So far as the use of software is concerned, the Tribunal records a fact that the evidence of the use of the software on 31/3/2008 was produced before the Tribunal. Thus, the Tribunal held that depreciation @ 30% on software was rightly claimed.” Respectfully following the judgement of the Hon’ble High Court in the case of Saraswat Infotech Ltd., supra, we allow this ground of the assessee . In the result, the assessee’s appeal is partly allowed.” 46 ITA Nos .309, 419, 420 574 661/23 others 16. We heard the rival submissions. In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment years, respectfully following it, we allow the corresponding grounds of the assessee’. In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment years, respectfully following the co-ordinate bench order referred supra we also decide this ground in favour of assessee and against the revenue. Accordingly, this ground of revenue is dismissed. 8(vi) Applicability of Provisions of section 115JB: This ground has been allowed in favour of assessee by the co-ordinate bench of the Tribunal in assessee’s own case in ITA Nos.948 & 777 /Chny/2018 for AY 2014-15 which held as under: ‘’29. On the issue of applicability of provisions of section 115JB, the Ld. AR relied on the order of the Calcutta ITAT in the case of UCI Bank (2015) 64 Taxmann.com 51 and Damodar Valley Corporation in ITA No. 438/Kol/2017, which is relied on by the Ld. CIT(A) in allowing the appeal in its favour. 30. We heard the rival submissions. Since, the Ld. CIT(A) has followed and applied the decision of Calcutta ITAT in the case of UCI Bank (2015) 64 Taxmann.com 51 and Damodar Valley Corporation in ITA No. 438/Kol/2017, we do not find any reason to interfere with the order of the Ld. CIT(A) and hence, the corresponding grounds of the Revenue on this ground as well as the other grounds raised by the Revenue with regard to the various additions made in computing book profits are dismissed’’. It is also pointed out that this issue has been decided by the Special Bench of Tribunal Mumbai in the case of Union Bank of India [ITA 424/Mum/2020]. Hence, respectfully following the co-ordinate bench order referred supra we also decide this ground in favour of assessee and against the revenue. Accordingly, this ground of Revenue is dismissed. 47 ITA Nos .309, 419, 420 574 661/23 others 8.(vii) Various additions under MAT: This ground has been allowed in favour of assessee by the co-ordinate bench of the Tribunal in assessee’s own case in ITA Nos.948 & 777 /Chny/2018 for AY 2014-15 which held as under: ‘’30. We heard the rival submissions. Since, the Ld. CIT(A) has followed and applied the decision of Calcutta ITAT in the case of UCI Bank (2015) 64 Taxmann.com 51 and Damodar Valley Corporation in ITA No. 438/Kol/2017, we do not find any reason to interfere with the order of the Ld. CIT(A) and hence, the corresponding grounds of the Revenue on this ground as well as the other grounds raised by the Revenue with regard to the various additions made in computing book profits are dismissed’’. Respectfully following the co-ordinate bench order referred supra we also decide this ground in favour of assessee and against the Revenue. Accordingly, this ground of Revenue is dismissed 9. ITA No.420/Chny/2023 AY 2019-20 (Assessee’s Appeal) and ITA No.525/Chny/2023 AY 2019-20 (Revenue’s Appeal): 9.1 We find that most of the recurring issues for this year are covered in terms of our above order in ITA No.419 & 524/Chny/2023 (supra) except the issues raised in revenue’s appeal relating to payment of pre-existing liability of items covered u/s 43B, Prior period expenses and Interest on IDPI Bonds. Therefore, our above order in ITA No.419 & 524/Chny/2023 (supra) will apply mutatis mutandis to appeals in ITA No.420/Chny/2023 AY 2019-20 and ITA No.525/Chny/2023 AY 2019-20. 9.2 Now we will take up the issues raised in revenue’s appeal relating to prior period expenses and Interest on IDPI Bonds as under: 48 ITA Nos .309, 419, 420 574 661/23 others Prior period expenses: The assessee has claimed expenditure pertaining to prior period, that is 2017-18, which is mentioned in the Form 3CD audit report. The AO denied the claim and added back for the reason that it is not pertaining to the year in consideration. The ld.CIT(A) also upheld the addition. The assessee submitted that major portion of prior period item relates to items such as arrears of rent, lighting charges etc. The liability to pay the said sums or the invoices for the said sums were received only in the current year and hence these cannot be treated as prior period expenses. The assessee further, submitted that it has branches spread across the country, and settlement of claim and payment thereof is a continuous process and no expenditure can be treated as propor period expenses overlooking this fact. Therefore, AO cannot add the sum of Rs.3.57 Crores in computing the total income. The assessee, before us relied upon the order of the Tribunal in the case of Bank of India (ITA No.2781/Mum/2011) which held as under: 12. The next ground is against the disallowance of Rs. 2,93,434, held to be prior period expenses, debited to the P&L Account. 13. The facts involved in this issue are that there are claims on expenses such as rent, electricity, payments to R&T Agents, repairs etc. pertaining to preceding year, where the payments made in the current year. The AO held that these are prior period expenses, the AO disallowed the same and added these to the income of the assessee. 14. Aggrieved the assessee approached the CIT(A), who sustained the disallowance, simply by observing that since the assessee has not been able to substantiate the claims made along with evidence that the expenses having accrued or crystallized in the current year. 15. Aggrieved the assessee is before the ITAT. 16. Before us the AR reiterated the submissions made before the revenue authorities and submitted, “The expenditure stated as relating to prior period consisted of rent, electricity charges, payment to R & T agents, repairs etc. The claims in respect of all these expenses were received only during the current assessment year and hence they cannot be treated as prior period expenses. Further the liability to pay these sums arose only in the current year and therefore 49 ITA Nos .309, 419, 420 574 661/23 others these are not prior period expenses. It is also submitted that in the case of assesses like that of the appellant with branches spread across the country, incurring of expenditure is a continuous process and no part of the expenses can be cut off and treated as prior period expenses. Reliance for this view is placed on the decision of ITAT, Mumbai in the case of Toyo Engineering India Limited Vs JCIT 100 TTJ 373 wherein it was held as under: “Even though a previous year is directly cut off on 31st March of every year, the actual carrying on of business which is a live process, cannot be cut off as exactly, especially in an organization like that of the assessee where activities are carried out through various site offices. Therefore, it is quite natural that there would be an amount of overflow of in formation after the close of the accounting year. Therefore, to certain extent, the claim of the assessee that the details of such expenditure were received only after the close of the accounting year, could be accepted. It is a continuous process to incur expenditure and to account for in the books of account. Therefore, even though they are treated technically as prior period expenses, it relates to a continuous flow of expenditure. Therefore, there is no justification in disallowing the expenditure, otherwise normally eligible for deduction. Reliance is also placed on the decision in the case of Union Bank of India in ITA no. 4720 to 4724/Mum/2010 for the assessment years 2002-03 to 2006 07 dated 30/06/2011 where under similar circumstances the claim of the appellant was allowed. Copy of the above decision is enclosed in annexure 6. Reliance is also placed on the decision of Saurastra Cement and Chemical Industries Vs CIT 213 ITR 523 Guj). The AR, therefore, submitted that since the issue is settled, no disallowance should be made. 16. DR relied on the orders of the revenue authorities. 18. We have heard the arguments of both the sides and have also perused the written submissions made before us and the case laws cited. We find that coordinate Bench at Mumbai in the case of Union Bank of India Vs ACIT, Mumbai, ITA no. 4720 & 4724/Mum/2010 (appeals filed by the department), it was held, Ground No. 1 raised by the Revenue (in ITA Nos. 4702 to 4706/M/10 for A.Yrs. 2002-03 to 2006-07) is with respect to prior period expenses. The expenditure disallowed as in the nature of rent, municipal taxes etc. where usually the amounts are paid after detailed negotiations and receipt of demand of the arrears amount from the parties. The Ld. CIT(A) taking into consideration the nature of expenditure had come to a conclusion that since the bank is a nationalized bank subjected to audit, the claim that the liability to pay the expenses arose in the relevant assessment year would not be a matter of doubt particularly considering the nature of expenditure. He therefore allowed the amount on the ground that no infallible or demonstrable proof had to be necessarily given to allow the above sum as an expenditure. The Ld. counsel for the assessee submitted as follows: “Further in the case of assessee like that of the respondent, which has branches all over India incurring of expenditure as a continuous process and cannot be cut off at any point of time to be classified as prior expenditure and disallowed.” We find that the decision of the 50 ITA Nos .309, 419, 420 574 661/23 others Jurisdictional Court in the case of Engg. India Ltd. Vs JCIT 110 TTJ 373 wherein it has been held as follows: “It is quite natural that there would be an amount of overflow of information after the close of the accounting year. Therefore, to certain extent, the claim of the assessee that the details of such expenditure were received only after the close of the accounting could be accepted. It is a continuous process to incur expenditure and to account for in the books of account. Therefore, even though they are treated technically as prior period expenses, it relates to a continuous flow of expenditure. Therefore, there is no justification in disallowing the expenditure, otherwise normally eligible for deduction.” Respectfully following the above, we dismiss the ground raised by the Revenue.” Since the issue now is settled on identical grounds by the coordinate Bench, respectfully following the decision in the case of Union Bank of India, we delete the addition made by the revenue authorities on this issue. Addition of Rs. 2,93,434 is deleted. We have gone through the orders of the lower authorities and we appreciate the submissions of the appellant that the liability to pay the said sums or the invoices for the said sums were received only in the current year and hence these cannot be treated as prior period expenses. The assessee has branches spread across the country, and settlement of claim and payment thereof is a continuous process and no expenditure can be treated as prior period expenses overlooking this fact. Hence, in the light of the order of the Tribunal referred supra we refrain from interfering in the order of the ld.CIT(A). Hence, the appeal of the revenue is dismissed. 9.3 Interest on IDPI Bonds: The assessee has challenged the of AO in making a disallowance of Rs.35.34 Crores interest paid on perpetual bonds on the ground that the amount is debited to reserves and is to be equated to share capital whereas on facts the bonds represent borrowings made by appellant and any interest paid on such 51 ITA Nos .309, 419, 420 574 661/23 others borrowings is allowable as deduction u/s 36 of the Act. He ld. CIT(A) relied upon the order of the Tribunal in the case of ICICI Bank ITA No.3864/Mum/2019 for AY 2010-11 allowed the appeal of the assessee. The Tribunal in the case of ICICI Bank ITA No.3864/Mum/2019 held as under: ‘’10. Heard both the sides and perused the material on record. The A.O has disallowed the claim of interest made u/s 36(1)(iii) by treating the perpetual bond as equity in nature. In support of his finding the A.O has placed reliance on the observation of the Pr. CIT made in the order u/s 263 in the case of the assessee for A.Y. 2013-14. These observations are as under: (i) (ii) (iii) Perpetual bond with no maturity date; right to redeem that assessee not with the Investors; showing in the balance sheet as debt or borrowings. However, it is observed that A.O has failed to controvert the undisputed fact that assessee has issued innovative perpetual debt instruments (IPDI) which carry a fixed rate of interest. The holder of these instruments had no right in management of the assessee bank. The assessee had paid interest to the bond holder after deducting tax at source. We have also perused the schedule 4 of the balance sheet placed in the paper book wherein at serial no. (vi) Innovative Perpetual Debt Instruments was placed under the head borrowings. The interest payment on these debt instruments was paid before computing profit of the assessee bank. We have also perused the detail of the redemption of perpetual debt instrument made by the assessee placed in the paper book reproduced as under: Sr. No. Series Allotment date Date of redemption Principle amount 1. DAG06RRB 09.08.2006 09.08.2016 Rs.233,00,00,000 Interest for the period FY. 2009-10 2. 23,53,30,000 DSP06RRB 13.09.2006 13.09.2016 RS.550,00,00,000 54,89,00,000 3. DJA07RB1 15.01.2007 16 ITA Nos. 3215 & 3864/Mum/2019 ICICI Bank Ltd. Vs. The ACIT-2(3)(2) 30.04.2017 Rs.18,00,00,000 4. 1,79,63,998 DJA08RB1 10.01.2008 30.04.2018 Rs.500,00,00,000 5. 50,75,00,000 BHSTN7.25% 24.06.2006 2,47,65,45,011 31.10.2016 USD 34,00,00,000 1,16,68,81,013 It is further noticed that the assessee had demonstrated from the submission that these debt instruments were also redeemed. We also find that facts of the case of Pepsu Road Transport Corporation Vs. CIT 130 ITR 18 (P & H) relied upon by the ld. D.R. are distinguishable from the case of the assessee. In that case the capital was not borrowed but the same was provided by the Government as per the provisions of the Road Transport Corporation Act, 1950 whereas in the case of the assessee bank it had borrowed the money from the lenders. Similarly the fact of the case of Bank of India Vs. ACIT vide 122 taxman.com 247 (Mum ITAT) are also distinguishable from the case of the assessee. In that case the revenue had not discussed about the terms on which perpetual bond were issued. Therefore, the issue was remained back to the ld. CIT(A) for fresh adjudication. We have also perused the decision of 52 ITA Nos .309, 419, 420 574 661/23 others Kerala Road Transport Corporation Vs. ITO 34 TTJ 101 Cochin, ITAT, wherein held that payment of interest was not made to the corporation but it was the payment made to the third parties. In the light of the above facts and circumstances merely that RBI recognizes to treat the said debt instruments as additional Tier/Capital would not change the nature of Innovative Perpetual Debt Instruments which were of the nature of long term borrowings and the interest paid was debited to the profit and loss account. These debt instruments were also redeemed on different dates as discussed supra in this order, therefore, we don’t find any reason to interfere in the decision of ld. CIT(A), accordingly, this ground of appeal of the revenue is dismissed’’. Therefore, we are of view that the order of the ld. CIT(A) is justified and right in deleting the addition of Rs.35.34 crores relying order of the Tribunal referred supra. Hence, we dismiss the appeal of the revenue. 10. To summarize the results, the appeals of the assessee in ITA Nos.574/2023 for assessment year 2013-14, 584/2023 for assessment year 15-16 and 420/2023 for assessment year 2019-2020 stand allowed whereas assessee appeal in ITANo.419/2023 for assessment year 2018-2019 stand dismissed. The appeals of the Revenue in ITA Nos.309/2023 for assessment year 2013-2014, 627/2023 for assessment year 2015-2016, ITA No.525/2023 for assessment year 2019-2020 and ITA No.396/2024 for assessment year 2015- 2016 are dismissed. ITA No.524/2023 for assessment year 2018-2019 partly allowed for statistical purpose Order pronounced in open court on 31st January, 2025 at Chennai. Sd/- Sd/- (मनोज क ुमार अŤवाल) (मनु क ुमार िगįर) (MANOJ KUMAR AGGARWAL) लेखा सद˟ / ACCOUNTANT MEMBER (MANU KUMAR GIRI) Ɋाियक सद˟ / JUDICIAL MEMBER चेɄई Chennai: िदनांक Dated :31 -01-2025 KV आदेश कȧ ĤǓतͧलͪप अĒेͪषत /Copy to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT, Chennai. 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF "