DCIT-2(2)(1), Mumbai V. M/S STATE BANK OF INDIA , Mumbai

ITA 3036/MUM/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 8185 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2015-2016
• Appeal Filed On: 08-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 3036/MUM/2019 Assessment Year: 2015-16 DCIT-2(2)(1), Room No. 545, 5 th floor, Aayakar Bhavan, Mumbai-400020. Vs. M/s State Bank of India (Successor to State Bank of Bikaner and Jaipur), FR&T Department, 3 rd floor, SBI Bhavan, Nariman Point, Mumbai-400020. PAN No. AAACS 8577 K (Earlier AADCS 4750 R) Appellant Respondent Revenue by : Mr. Manoj Kumar, CIT-DR Assessee by : Mr. Ketan Ved & Ms. Shraddha Jain, ARs Date of Hearing : 28/07/2022 Date of pronouncement : 12/08/2022 ORDER PER OM PRAKASH KANT, AM This appeal by the Revenue is directed against the order dated 26.02.2019 passed by the Ld. Commissioner of Income Tax (Appeals)-5, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2015-16, in respect of rectification order passed by the Ld. Assessing Officer. The reproduced as under: “On the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the assessee’s plea that the interest income on securities has to be taxed on the due basis only without appreciating that as per the mercantile system of accounting followed by the assessee interest on securities has to be taxed on accrual basis.” 2. Briefly stated, the facts of the case are that the assessee sought for rectification of interest income on the securities Assessing Officer. According to the assessee, the interest of securities was taxable on the due basis. The assessee worked out such interest amount o to the Assessing Officer interest income on securities taxed on accrual basis amount ₹1818,75,14,980/- by the assessee to the return of income had already offered ₹1743,28,84,330/- on due basis and therefore according to the The grounds raised by the Re reproduced as under: On the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the assessee’s plea that the interest income on securities has to be taxed on the due basis only without appreciating that as r the mercantile system of accounting followed by the assessee interest on securities has to be taxed on accrual Briefly stated, the facts of the case are that the assessee sought for rectification of interest income on the securities . According to the assessee, the interest of securities was taxable on the due basis. The assessee worked out such interest amount on due basis to ₹1743,28,84,330/ to the Assessing Officer interest income on securities taxed on accrual basis amount of which was worked out to by the assessee. The assessee in the computation to the return of income had already offered on due basis and therefore according to the State Bank of India ITA No. 3036/M/2019 2 grounds raised by the Revenue are On the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the assessee’s plea that the interest income on securities has to be taxed on the due basis only without appreciating that as r the mercantile system of accounting followed by the assessee interest on securities has to be taxed on accrual Briefly stated, the facts of the case are that the assessee sought for rectification of interest income on the securities before the . According to the assessee, the interest of securities was taxable on the due basis. The assessee worked out 28,84,330/-. According to the Assessing Officer interest income on securities should be was worked out to . The assessee in the computation to the return of income had already offered interest of on due basis and therefore according to the assessee, the Assessing Officer of same amount again while computing the assessed income. The assessee in the rectification application filed before Assessing Officer submitted that though it had already offered addition of ₹1743,28,84,330/ however, same was added same should be reduced rectified assessment order difference of amount of interest on due basis, 3. Aggrieved, the assessee filed appeal before the Ld. CIT(A Ld. CIT(A) deleted the addition of interest on accrued basis following his finding in the appeal against the assessment order. The relevant finding of the Ld. CIT(A) is reproduced as under: “7.3.1 During the course of appellate proceedings, the Ld. has submitted that the issue raised herein is similar/identical to the issue raised in order u/s 143(3) of assessee, the Assessing Officer was not supposed to make addition same amount again while computing the assessed income. The assessee in the rectification application filed before Assessing Officer submitted that though it had already offered 1743,28,84,330/- i.e. the amount on interest due, added again in the assessment order same should be reduced. The Ld. Assessing Officer accor rectified assessment order, but, he also made an addition for the difference of amount of interest securities on accrual basis interest on due basis, for net amount of ₹754,630,650/ Aggrieved, the assessee filed appeal before the Ld. CIT(A Ld. CIT(A) deleted the addition of interest on accrued basis following his finding in the appeal against the assessment order. The relevant finding of the Ld. CIT(A) is reproduced as under: 7.3.1 During the course of appellate proceedings, the Ld. has submitted that the issue raised herein is similar/identical to the issue raised in order u/s 143(3) of State Bank of India ITA No. 3036/M/2019 3 supposed to make addition same amount again while computing the assessed income. The assessee in the rectification application filed before the Ld. Assessing Officer submitted that though it had already offered i.e. the amount on interest due, in the assessment order, therefore, . The Ld. Assessing Officer accordingly addition for the interest securities on accrual basis and 754,630,650/-. Aggrieved, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) deleted the addition of interest on accrued basis following his finding in the appeal against the assessment order. The relevant finding of the Ld. CIT(A) is reproduced as under: 7.3.1 During the course of appellate proceedings, the Ld. AR has submitted that the issue raised herein is similar/identical to the issue raised in order u/s 143(3) of the Act and the decision taken therein may also be taken in this appeal. The contention of the appellant has been considered carefully. From recor disposing off the appeal against order u/s 143(3) of the Act for the assessment year under consideration, vide order dated 26.02.2019 in Appeal No.CIT(A) 337/17-18 (ITBA Appeal No. CIT(A), Mumbai 18), the impugned issue of addition made on account of "Interest accrued but not due" has already been. decided in favour of the appellant and it has been held that interest on securities is to be taxed on due basis and not accrual basis. Since the issue un AO is directed to revise the income as per decision given in above referred appellate order dated 26.02.2019 of the undersigned. Hence, the Ground No. 1 raised in appeal is decided accordingly, subject to above di 4. Aggrieved, the Revenue is before the Tribunal raising the grounds as reproduced as above. 5. We have heard the rival submissions of the parties on issue dispute and perused the relevant material on record. We find that the Assessing Officer in the rectification order added the difference of the amount of the interest accrued on securities which was due on such securities the Act and the decision taken therein may also be taken in this appeal. The contention of the appellant has been considered carefully. From records, it is observed that while disposing off the appeal against order u/s 143(3) of the Act for the assessment year under consideration, vide order dated 26.02.2019 in Appeal No.CIT(A)-5/ACIT-2(2)(1)/IT 18 (ITBA Appeal No. CIT(A), Mumbai-5/10399/17 8), the impugned issue of addition made on account of "Interest accrued but not due" has already been. decided in favour of the appellant and it has been held that interest on securities is to be taxed on due basis and not accrual basis. Since the issue under consideration remains same, so the Ld. AO is directed to revise the income as per decision given in above referred appellate order dated 26.02.2019 of the undersigned. Hence, the Ground No. 1 raised in appeal is decided accordingly, subject to above directions.” Aggrieved, the Revenue is before the Tribunal raising the grounds as reproduced as above. We have heard the rival submissions of the parties on issue dispute and perused the relevant material on record. We find that er in the rectification order added the difference of the amount of the interest accrued on securities and which was due on such securities, amounting to ₹ State Bank of India ITA No. 3036/M/2019 4 the Act and the decision taken therein may also be taken in this appeal. The contention of the appellant has been ds, it is observed that while disposing off the appeal against order u/s 143(3) of the Act for the assessment year under consideration, vide order 2(2)(1)/IT- 5/10399/17- 8), the impugned issue of addition made on account of "Interest accrued but not due" has already been. decided in favour of the appellant and it has been held that interest on securities is to be taxed on due basis and not accrual basis. der consideration remains same, so the Ld. AO is directed to revise the income as per decision given in above referred appellate order dated 26.02.2019 of the undersigned. Hence, the Ground No. 1 raised in appeal is Aggrieved, the Revenue is before the Tribunal raising the We have heard the rival submissions of the parties on issue-in- dispute and perused the relevant material on record. We find that er in the rectification order added the difference and the interest ₹754,630,650/-. The Ld. CIT(A) has already deleted the said addition following his finding in the appeal against the original assessment order. Before us, the Ld. Counsel of the assessee has submitted that the issue has already been decided Hon’ble Bombay High Court. He referred to the decision of the Co ordinate Bench in ITA Nos. 3685 & 4951/M/2013, wherein taxation of interest on due basis has been upheld. The relevant finding of the decision of the Co-ordinate Bench is repro 52. The Ld. A.R. for the assessee brought the fact on record that this issue has also been decided in favour of the assessee in earlier years from A.Y. 1991 upheld by the Hon’ble Bombay High Court. This fact has been controverted by the Ld. D.R. for the Revenue 53 We have perused the order passed by the co Bench of the Tribunal in assessee’s own case for A.Y. 2001 in ITA No.4656/M/2011 which is on identical issues, the operative part of which is “48. Ground no.2, raised by the Revenue is, the learned CIT(A) erred in allowing the taxing of interest on securities on due basis. 49. During the course of hearing, on a perusal of the record available before The Ld. CIT(A) has already deleted the said addition following his finding in the appeal against the original assessment order. Before us, the Ld. Counsel of the assessee has submitted that the issue has decided in favour of the assessee by th Hon’ble Bombay High Court. He referred to the decision of the Co ordinate Bench in ITA Nos. 3685 & 4951/M/2013, wherein taxation of interest on due basis has been upheld. The relevant finding of the ordinate Bench is reproduced as under: 52. The Ld. A.R. for the assessee brought the fact on record that this issue has also been decided in favour of the assessee in earlier years from A.Y. 1991-92 to 2004-05 which has been upheld by the Hon’ble Bombay High Court. This fact has been controverted by the Ld. D.R. for the Revenue. 53 We have perused the order passed by the co-ordinate Bench of the Tribunal in assessee’s own case for A.Y. 2001 in ITA No.4656/M/2011 which is on identical issues, the operative part of which is as under: “48. Ground no.2, raised by the Revenue is, the learned CIT(A) erred in allowing the taxing of interest on securities on due basis. 49. During the course of hearing, on a perusal of the record available before -us, we find that identical issue State Bank of India ITA No. 3036/M/2019 5 The Ld. CIT(A) has already deleted the said addition following his finding in the appeal against the original assessment order. Before us, the Ld. Counsel of the assessee has submitted that the issue has in favour of the assessee by the order of the Hon’ble Bombay High Court. He referred to the decision of the Co- ordinate Bench in ITA Nos. 3685 & 4951/M/2013, wherein taxation of interest on due basis has been upheld. The relevant finding of the duced as under: 52. The Ld. A.R. for the assessee brought the fact on record that this issue has also been decided in favour of the assessee 05 which has been not ordinate Bench of the Tribunal in assessee’s own case for A.Y. 2001-02 in ITA No.4656/M/2011 which is on identical issues, the “48. Ground no.2, raised by the Revenue is, the learned CIT(A) erred in allowing the taxing of interest on securities on due basis. 49. During the course of hearing, on a perusal us, we find that identical issue has been consistently decided in favour of the assessee and against the Revenue by the Tribunal in assessee's own case for the assessment year 1991 2000, 2000-01 and 2008 case in State Bank of I 4563/Mum/2016, order dated 3rd February 2020, for the A.Y. 2008-09, has decided this issue in favour of the assessee and against the Revenue. Consistent with the view taken by the Tribunal in assessee's own case as cited supra, the order of the learned CIT(A) on this issue by dismissing the ground raised by the Revenue. The learned Counsel for the assessee also submitted before us that that the appeal filed by the Revenue in assessee's own case before the Hon'ble Jurisdictional High Court for the assessment year 1996-97, the said appeal was also dismissed vide its order dated 1st August 2016. Ground no. 2, raised by the Revenue is dismissed.” 54. Since the issue has already been set at rest by the co ordinate Bench of the Hon’ble Bombay High Court for A.Y. 1996 scope to interfere into the findings returned by the Ld. CIT(A). Hence, ground No.5 is also determined against the Revenue.” 5.1 As the issue of taxing of i settled in favour of the assessee and therefore following the decision as been consistently decided in favour of the assessee and against the Revenue by the Tribunal in assessee's own case for the assessment year 1991-92, 1995-96, 1996-97, 1999 01 and 2008-09. The Tribunal in assessee's own case in State Bank of India v/s DCIT, ITA no.3644 & 4563/Mum/2016, order dated 3rd February 2020, for the 09, has decided this issue in favour of the assessee and against the Revenue. Consistent with the view taken by the Tribunal in assessee's own case as cited supra, we uphold the order of the learned CIT(A) on this issue by dismissing the ground raised by the Revenue. The learned Counsel for the assessee also submitted before us that that the appeal filed by the Revenue in assessee's own case before the dictional High Court for the assessment year 97, the said appeal was also dismissed vide its order dated 1st August 2016. Ground no. 2, raised by the Revenue 54. Since the issue has already been set at rest by the co ordinate Bench of the Tribunal which has been confirmed by the Hon’ble Bombay High Court for A.Y. 1996-97, we find no scope to interfere into the findings returned by the Ld. CIT(A). Hence, ground No.5 is also determined against the As the issue of taxing of interest of securities on due basis is settled in favour of the assessee and therefore following the decision State Bank of India ITA No. 3036/M/2019 6 as been consistently decided in favour of the assessee and against the Revenue by the Tribunal in assessee's own case 97, 1999- 09. The Tribunal in assessee's own ndia v/s DCIT, ITA no.3644 & 4563/Mum/2016, order dated 3rd February 2020, for the 09, has decided this issue in favour of the assessee and against the Revenue. Consistent with the view taken by we uphold the order of the learned CIT(A) on this issue by dismissing the ground raised by the Revenue. The learned Counsel for the assessee also submitted before us that that the appeal filed by the Revenue in assessee's own case before the dictional High Court for the assessment year 97, the said appeal was also dismissed vide its order dated 1st August 2016. Ground no. 2, raised by the Revenue 54. Since the issue has already been set at rest by the co- the Tribunal which has been confirmed by 97, we find no scope to interfere into the findings returned by the Ld. CIT(A). Hence, ground No.5 is also determined against the nterest of securities on due basis is settled in favour of the assessee and therefore following the decision of the Co-ordinate Bench (supra), we reject the contention of the Revenue. The ground raised by the Revenue is dismissed. 6. In the result, the ap Order pronounced in the open Court in Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 12/08/2022 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// ordinate Bench (supra), we reject the contention of the . The ground raised by the Revenue is dismissed. In the result, the appeal filed by the Revenue is dismissed. ounced in the open Court in 12/08/2022. Sd/ SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary ITAT, Mumbai State Bank of India ITA No. 3036/M/2019 7 ordinate Bench (supra), we reject the contention of the . The ground raised by the Revenue is dismissed. peal filed by the Revenue is dismissed. /08/2022. Sd/- OM PRAKASH KANT) MEMBER Sr. Private Secretary) ITAT, Mumbai