ACIT - 2(3)(1), MUMBAI V. DENA BANK, MUMBAI

ITA 5259/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7784 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 24-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MEENA
• Keywords: Revised return
• Section: 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A , MUMBAI BEFORE S HRI G.S. PANNU (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 5259 /MUM/20 1 6 ASSESSMENT YEAR: 2012 - 13 THE ACIT - 2(3)(1), ROOM NO. 552, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S DENA BANK, 17 - B, DENA BANK BUILDING, HARIMAN CIRCLE, FORT, MUMBAI 400023 PAN: AAACD4249B (APPELLANT) (RESPONDENT) REVENUE BY : SHRI R.P. MEENA ( CIT DR) ASSESSEE BY : SHRI S. ANANTHAN & MS. LALITHA RAMESHWARAN) (AR) DATE OF HEARING: 02/11 /201 7 DATE OF PRONOUNCEMENT: 22 / 12 /201 7 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 31/05/2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 6 [CIT(A)] , MUMBAI , FOR THE A S S ESSMENT YEAR 2012 - 13 , WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE A CT). 2. BRIEF FACTS OF TH E CASE ARE THAT THE ASSESSEE ENGAGED IN THE BUSINESS OF BANKING FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012 - 13 DECLARING THE TOTAL INCOME OF RS. 664,17,32,840/ - . T HE CASE WAS SELECTED FOR SCRUTINY AND THE AO ISSUED NOTICES, U/S 143 (2) AND 142 (1) OF THE ACT. THE ASSESSEE FILED REVISED RETURN DECLARING THE TOTAL INCOME AT RS. 658,32,50,402/ - . THE AO COMPLETED THE PROCEEDINGS U/S 143 (3) DETERMINING THE TOTAL INCOME AT RS. 2 ITA NO . 5259 /MUM/2016 ASSESSMENT YEAR: 2012 - 13 1017,93,29,520/ - UNDER NORMAL PROVISIONS OF ACT AND RS. 1312,34,59,472/ - U NDER SECTION 115JB OF THE ACT. THE AO MADE THE FOLLOWING ADDITIONS WHILE COMPUTING THE INCOME OF THE ASSESSEE UNDER THE NORMAL PROVISIONS OF THE ACT : - 1. ADDITION ON ACCOUNT OF BROKEN PERIOD INTEREST RS. 11,40,18,861/ - . 2. DISALLOWANCE U/S 14A READ WITH RULE 8D RS. 12,22,18,952/ - . 3. SIMILARLY, AO MADE AN ADDITION OF RS. 12,22,18,952/ - U/S 1 4 A WHILE COMPUTING THE INCOME OF THE ASSESSEE UNDER SECTION 115JB OF THE ACT. 4. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BY FILING FIRST APPEAL BEFORE THE LD. CIT (A ) , INTER ALIA ON THE GROUNDS THAT THE AO HAS WRONGLY HELD THAT THE PROVISIONS OF SECTION 115JB APPLIES TO ALL COMPANIES INCLUDING THE ASSESSEE COMPANY AND THAT THE AO HAS WRONGLY MADE ADDITION ON ACCOUNT OF BROKEN PERIOD INTEREST . THE LD. CIT (A) FOLLOWING THE DECISION OF ITAT RENDERED IN ASSESSEES OWN CASE FOR THE A.Y S . 2006 - 07, 2008 - 09, 2010 - 11 AND 2011 - 12 AND IN THE CASE OF KURUNG THAI BANK PLC (ITA NO. 3390/MUM/1990) DATED 30/09/2010 AND UNION BANK OF INDIA (ITA NO. 4702/MUM/2010) , DECIDED THE FIRST IS SUE IN FAVOUR OF THE ASSESSEE. SIMILARLY, THE LD. CIT (A) DECIDED THE SECOND GROUND OF APPEAL OF THE ASSESSEE AND DELETED THE ADDITION MADE ON ACCOUNT OF BROKEN PERIOD INTEREST RELYING ON VARIOUS JUDICIAL PRONOUNCEMENTS AND THE DECISION OF ITAT MUMBAI IN T HE ASSESSEES OWN CASE FOR THE A.Y. 2006 - 07 AND 2008 - 09. 5 . AGGRIEVED BY THE ORDER OF LD. CIT (APPEAL S ), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING EFFECTIVE GROUND S : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT (A) HAS ERRED IN HOLDING THAT THE PROVISION OF SECTION 115JB CANNOT BE APPLIED TO THE ASSESSEE COMPANY RELYING ON THE DECISION OF THE HONBLE ITAT & THE LD. CIT (A) DECISION IN 3 ITA NO . 5259 /MUM/2016 ASSESSMENT YEAR: 2012 - 13 THE ASSESSEES OWN CASE FOR A.Y. 2006 - 07 & 2008 - 09, 2010 - 11 AND 2011 - 12 IN THE ASSESSEE OWN CASE AND ALSO THE DECISION OF THE HONBLE ITAT IN THE CASE OF KURUNG THAI BANK PLC (ITA NO. 3390/M/90) DATED 30.09.2010 AND UNION BANK OF INDIA (ITA NO. 4702/MUM/2010). 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN CONSIDERING THE BROKEN PERIOD INTEREST CLAIMED BY THE ASSESSEE BANK AND ACCORDINGLY DELETED THE ADDITION MADE BY THE AO AMOUNTING RS. 11,40,18,861/ - RELYING ON VARIOUS JUDICIAL DECISIONS AND ALSO THE DECISION OF THE HONBLE ITAT IN THE ASSESSEES OWN CASE FOR A.Y. 2006 - 07 & 2008 - 09. 6. T HE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELIED ON THE ASSESSMENT ORDER PASSED BY THE AO. 7. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT BOTH THE GROUNDS OF APPEAL ARE THE COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE ITAT, MUMBAI PASSED IN ASSESSEES OWN APPEALS FOR THE A.Y. 2006 - 07 , 2008 - 09, 2010 - 11 AND 2011 - 12,. SINCE, THE ORDER PASSED BY THE LD. CIT (A) IS IN ACCORDANCE WITH THE DECISION OF T HE ITAT RENDERED IN THE ASSESSEES OWN APPEALS FOR THE AFORESAID ASSESSMENT YEARS , T HERE IS NO MERIT IN THE APPEAL OF THE REVENUE. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO GONE THROUGH THE MATERIAL ON RECORD. VIDE FIRST GROUND OF APPEAL, THE REVENU E HAS CHALLENGED THE FINDINGS OF THE LD. CIT (A) THAT THE PROVISIONS OF SECTION 115JB CANNOT BE APPLIED TO THE ASSESSEE BANK. WE NOTICE THAT THE LD. CIT (A) HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE COORDINATE BENCHE S OF THE TRIBUNAL IN THE ASSESSEES OWN CASE, ITA NO. 2337/M/2011 AND ITA NO. 2731/M/2011 DATED 10/04/2013 FOR A.Y. 2006 - 07 AND ITA NO. 3676/M/2012 DATED 09/04/2014 FOR A.Y. 2008 - 09 AND THE DECISION RENDERED BY ITAT, MUMBAI IN KURUNG THAI BANK PLC (ITA NO. 3390/M/90 DATED 30/09/2010 AND 4 ITA NO . 5259 /MUM/2016 ASSESSMENT YEAR: 2012 - 13 UNION BANK OF INDIA (SUPRA). THE OPERATIVE PART OF THE FINDINGS OF THE LD. CIT(A) READ S AS UNDER: - 4.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND SUBMISSION MADE BY THE LD. AR. IT IS SEEN THAT SIMILAR ISSUE HA S COME UP FOR CONSIDERATION IN THE IMMEDIATELY PRECEDING A.YS. 2010 - 11 AND 2011 - 12. AFTER CONSIDERING THE FACTS OF THE CASE AND SUBMISSIONS OF THE APPELLANT, THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT VIDE PARA 4.2 AND 4.3 OF APPEAL NO. CIT (A) - 6/IT - 26 & IT - 188/2013 - 14 DATED 28.12.2015. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREUNDER FOR READY REFERENCE AND CLARITY.: - 4.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSION MADE BY THE LD. AR. I HAVE ALSO GONE THROUGH THE DECISIONS RELIED UPON BY LD. AR. IT IS SEEN FROM THE DETAILS AND VARIOUS DECISIONS THAT THIS ISSUE HAS BEEN DECIDED IN APPELLANTS FAVOUR BY HONBLE ITAT, MUMBAI IN APPELLANTS OWN CASE IN ITA NO. 2337/M/2011 & ITA NO. 2731/M/2011 DATED 10.04.2013 FOR A .Y. 2006 - 07 AND ITA NO. 3676/M/2012 DATED 09.04.2014 FOR A.Y. 2008 - 09. FURTHER, AS SUBMITTED BY THE LD. AR, THIS ISSUE HAS ALSO BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY HONBLE ITAT, MUMBAI IN THE CASE OF KURUNG THAI BANK PLC (ITA NO. 3390/M/90 DATED 30.0 9.2010) AND UNION BANK OF INDIA (SUPRA). RESPECTFULLY FOLLOWING THE ABOVE ORDERS, THIS GROUND IS ALLOWED. 4.3 SINCE IT HAS BEEN HELD THAT THE PROVISIONS OF SECTION 115JB ARE NOT APPLICABLE TO THE APPELLANT BANK, THE WITHOUT PREJUDICE GROUNDS DO NOT REQUIR E ADJUDICATION. IN THE RESULT, THE GROUND IS ALLOWED. 9. SINCE, T HE LD. CIT (A) HAS DECIDED THIS GROUND IN ACCORDANCE WITH THE DECISION OF THE CO - ORDINATE BENCH RENDERED IN ASSESSEES OWN CASE FOR THE A.Y. 2006 - 07, 2008 - 09 , 2010 - 11 AND 2011 - 12 AFORESAI D, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT (A). ACCORDINGLY, WE UPHOLD THE FINDINGS OF THE LD. CIT (A) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 10. THE SECOND GROUND PERTAINS TO ADDITION ON ACCOUNT OF BROKEN P ERIOD INTEREST PAID BY THE APPELLANT FOR ACQUIRING SECURITIES. AS POINTED OUT BY THE LD. 5 ITA NO . 5259 /MUM/2016 ASSESSMENT YEAR: 2012 - 13 COUNSEL FOR THE ASSESSEE , THE LD. CIT(A) HAS DECIDED T HIS GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE LD. CIT(A) PASSED IN THE ASSESSE ES OWN CASE FOR THE A.Y. 2010 - 11 AND 2011 - 12. WE FURTHER NOTICE THAT THE CIT (A) HAS DECIDED THIS ISSUE IN THE A.Y. 2010 - 11 AND 2011 - 12 RELYING ON THE VARIOUS JUDGMENTS INCLUDING THE JUDGMENT OF THE HONBLE SUPREME COURT DELIVERED IN CIT VS. CITY BANK AND HONBLE BOMBAY HIGH COURT IN AMERICAN EXPRESS INTERNATIONAL BANKING CORPORATION VS. CIT 258 ITR 601 (BOM) AND THE DECISIONS OF THE COORDINATE BENCHES RENDERED IN APPELLANTS OWN CASE ITA NO. 2337/M/2011 DATED 10.04.2013 FOR A.Y. 2006 - 07 AND ITA NO. 3676/M /2012 DATED 09.04.2014 FOR A.Y. 2008 - 09. THE FINDINGS OF LD. CIT (A) READ AS UNDER: - 5.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE ON THE SUBMISSION OF APPELLANT. I HAVE ALSO GONE THROUGH THE DECISIONS RELIED UPON BY LD. AR AND THE AO. IT IS SEE N THAT SIMILAR ISSUE HAS COME UP FOR CONSIDERATION IN APPELLANTS OWN CASE IN THE IMMEDIATELY PRECEDING A.YS. 2010 - 11 AND 2011 - 12. AFTER CONSIDERING THE FACTS OF THE CASE AND SUBMISSIONS OF THE APPELLANT, THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLA NT VIDE PARA 5.3 OF APPEAL NO. CIT (A) - 6/IT - 26 & IT - 188/2013 - 14 DATED 28.12.2015. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREUNDER FOR READY REFERENCE.: - 5.3 BE THAT AS IT MAY, I FIND THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT B Y THE HONBLE SUPREME COURT IN THE CASE OF CIT V. CITIBANK NA IN CIVIL APPEAL NO. 1549 OF 2006 DATED 12.08.2008. FURTHER, HONBLE BOMBAY HIGH COURT IN THE CASE OF AMERICAN EXPRESS INTERNATIONAL BANKING CORPORATION (SUPRA) HAS ALSO DECIDED THIS ISSUE IN FAV OUR OF THE APPELLANT. IT WAS ALSO SUBMITTED THAT HONBLE ITAT, D BENCH, MUMBAI IN APPELLANTS OWN CASE HAS DECIDED THIS ISSUE IN ITS FAVOUR IN ITA NO. 2337/M/2011 DATED 10.04.2013 FOR A.Y. 2006 - 07 AND ITA NO. 3676/M/2012 DATED 09.04.2014 FOR A.Y. 2008 - 09 . RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF HONBLE SUPREME COURT, JURISDICTIONAL HIGH COURT AND HONBLE ITAT, IT IS HELD THAT THE BROKEN PERIOD INTEREST PAID BY THE APPELLANT IS ALLOWABLE AS DEDUCTION IN COMPUTING THE TOTAL INCOME. THE GROUND IS ACCOR DINGLY, ALLOWED. 6 ITA NO . 5259 /MUM/2016 ASSESSMENT YEAR: 2012 - 13 5.3 SINCE THE FACTS ARE SIMILAR, FOLLOWING THE REASONS GIVEN IN APPELLANTS OWN CASE FOR A.Y. 2010 - 11 AND 2011 - 12 (SUPRA), NO DISALLOWANCE IS CALLED FOR IN RESPECT OF BROKEN PERIOD INTEREST ON SECURITIES. ACCORDINGLY, THE ADDITION OF RS. 11,40,18,861/ - ON ACCOUNT OF BROKEN PERIOD INTEREST FOR ACQUIRING SECURITIES IS DELETED. THE GROUND IS ALLOWED. 11. SINCE, T HE LD. CIT (A) HAS DECIDED THE SAID ISSUE BY FOLLOWING THE DECISION OF CIT (A) IN ASSESSEES OWN APPEAL FOR THE A.Y. 2010 - 11 AND 2 011 - 12. WE FURTHER NOTICE THAT THE LD. CIT (A) HAS DECIDED THIS ISSUE BY FOLLOWING THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. CITIBANK DELIVERED IN CIVIL APPEAL NO. 1549 OF 2006 DATED 12.08.2008 AND THE JUDGMENT OF HONBLE BOMBAY HIGH COU RT IN AMERICAN EXPRESS INTERNATIONAL BANKING CORPORATION (SUPRA) AND THE DECISION OF ITAT, MUMBAI PASSED IN THE ASSESSEES OWN CASE, ITA NO. 2337/M/2011 DATED 10/04/2013 FOR THE A.Y. 2006 - 07 AND ITA NO. 3676/M/2012 DATED 09/04/2014 FOR THE A.Y. 2008 - 09. H ENCE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT (A). ACCORDINGLY, WE UPHOLD THE FINDINGS OF THE LD. CIT (A) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. IN THE RESULT, APPEAL FILED BY THE REVENUE FOR A SSESSMENT YEA R 2012 - 2013 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 TH. DECEMBER , 2017 . SD/ - SD/ - ( G.S. PANNU ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 22 / 12 / 2017 ALINDRA, PS 7 ITA NO . 5259 /MUM/2016 ASSESSMENT YEAR: 2012 - 13 / 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 . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI