DCIT, Jaipur V. M/S STATE BANK OF BIKANER & JAIPUR, Jaipur

ITA 581/JPR/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2076 (ITAT-JAIPUR)
• Duration Of Justice: 5 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 08-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROLLY AGARWAL
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Business expenditure; Question of law
• Section: 37; 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 581/JP/2012 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2009-10. DY. COMMISSIONER OF INCOME- TAX, CIRCLE-6, JAIPUR. CUKE VS. STATE BANK OF BIKANER & JAIPUR, TILAK MARG, C-SCHEME, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AADCS 4750 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 138/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2009-10. STATE BANK OF BIKANER & JAIPUR, TILAK MARG, C-SCHEME, JAIPUR. CUKE VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AADCS 4750 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. ROLLY AGARWAL (CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 08.08.2017. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 31/08/2017. VKNS'K@ ORDER PER BENCH : THESE TWO APPEALS BY THE REVENUE AND ASSESSEE ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD. CIT (APPEALS)-II, JAIPUR DAT ED 22.03.2012 AND 16.01.2015 PERTAINING TO A.Y. 2009-10. BOTH THE APPEALS ARE BE ING DISPOSED OFF BY WAY OF A 2 ITA NO. 581/JP/12 & 138/JP/15 STATE BANK OF BIKANER & JAIUPR, JAIUR. CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. FI RST, WE TAKE UP REVENUES APPEAL IN ITA NO. 581/JP/2012. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN 1. DELETING THE ADDITION OF RS. 39,05,53,749/- MADE BY THE AO ON ACCOUNT OF INCLUDING THE INTEREST OF GOVERNMENT AND OTHER SECURITIES IN THE INCOME OF THE ASSESSEE ON ACCRUAL BASIS AT RS. 11,89,48,78,076/- AS AGAINST THE INCLUSION BY THE A SSESSEE BANK ON THE DUE BASIS AT RS. 11,50,43,24,327/-. 2. DELETING ADDITION OF RS. 48,25,28,994/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF BROKEN PERIOD PAYMENT ON PURCHASES OF SECURITIES. 3. DELETING THE ADDITION OF RS. 65,68,06,244/- MADE BY THE AO IN RESPECT OF VALUATION OF INVESTMENT BY ADOPTING GLOB AL METHOD OF VALUATION OF SECURITIES AS AGAINST CATEGORY WISE ME THOD OF VALUATION FOLLOWED BY THE ASSESSEE. 4. DELETING THE ADDITION OF RS. 1,17,45,09,429/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF AMORTIZATION IN RESPE CT OF PERMANENT DIMINUTION IN THE VALUE OF SECURITIES HEL D BY THE BANK UNDER THE HELD TO MATURITY CATEGORY. 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IDENTICAL GROUNDS WERE RAISED IN THE APPEAL IN ITA NO. 438/JP/2009 PERTAINING TO A.Y. 2006-07 ON BEHALF OF THE REVENUE. HE SUBMITTE D THAT THE FACTS ARE IDENTICAL AS WERE IN THE A.Y. 2006-07. THE ISSUES ARE SQUARELY C OVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE ASSESSEES OWN CASE PERTAINING TO A.Y. 1997-98 TO 2000-01 AND 2004-05. 2.1. THE D/R HAS NOT CONTROVERTED THIS FACT. 2.2. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL ON RECORD. BOTH THE RESPECTIVE REPRESENTATIVES OF THE PARTIES HAVE ADOP TED THE SAME ARGUMENTS AS WERE 3 ITA NO. 581/JP/12 & 138/JP/15 STATE BANK OF BIKANER & JAIUPR, JAIUR. MADE IN THE REVENUES APPEAL IN ITA NO. 438/JP/2009 AND THE APPEAL OF THE REVENUE ON THE IDENTICAL GROUNDS RAISED MENTIONED HEREIN AB OVE HAVE BEEN DECIDED BY FOLLOWING JUDGMENT OF THE HONBLE HIGH COURT OF RAJ ASTHAN IN APPEALS PERTAINING TO THE ASSESSMENTS 1997-98 TO 2000-01 AND 2004-05. THE LD. COUNSEL HAS INVITED OUR ATTENTION, TO THE JUDGMENTS OF HONBLE HIGH COURT R ENDERED IN D.B. INCOME TAX APPEALS NO. 185/2014 AND 27/2015. THEREFORE, TAKING A CONSISTENT VIEW, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE FINDING OF THE LD. CIT (A) IN THIS APPEAL ALSO, SAME IS HEREBY AFFIRMED. THE GROUNDS OF REVENUES A PPEAL ARE REJECTED. THE APPEAL OF THE REVENUE IS DISMISSED. 3. NOW WE TAKE UP ASSESSEES APPEAL IN ITA NO. 138/JP/2015 PERTAINING TO ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS RAISED T HE FOLLOWING GROUNDS OF APPEAL:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE ORDER BY LD. COMMISSIONER OF INCOME TAX (APPEALS) U/S 154 IS ILL EGAL AND BAD IN LAW. 2. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERR ED ON FACTS AND IN LAW IN DISALLOWING BROKEN PERIOD INTEREST AT RS. 48,25,28,994/- WITHOUT DEALING WITH THE VARIOUS CONTENTIONS RAISED BY THE ASSESSEE. HE HAS FURTHER ERRED IN MAKING THE DISALLOWANCE ON THE BASIS OF DECISION OF RAJASTHAN HIGH COURT IN CASE OF CIT VS. BANK OF RAJASTHAN LTD. 316 ITR 391 DATED 24.03.2008 BY NOT CONSIDERIN G THE SUBSEQUENT JUDGMENT OF HONBLE SUPREME COURT IN CASE OF CIT VS . CITI BANK NA IN CIVIL APPEAL NO. 1549/2006 DATED 12.08.2008 BY FOLL OWING THE DECISION OF HIS PREDECESSOR CIT (A) AND HONBLE ITAT AGAINST WHICH MISCELLANEOUS APPLICATION FILED BY ASSESSEE IS PEND ING BEFORE IT. 3. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS FUR THER ERRED ON FACTS AND IN LAW IN DISALLOWING THE GROSS BROKEN PE RIOD INTEREST WITHOUT CONSIDERING THAT BROKEN PERIOD INTEREST RECEIVED OF RS. 39,36,75,251/- IS ALREADY TAXED AND THEREFORE EVEN IF DISALLOWANCE TO BE MADE IT SHOULD BE RESTRICTED TO NET AMOUNT OF BROKEN PERIOD INTEREST PAID AT RS. 8,88,53,743/-. 4 ITA NO. 581/JP/12 & 138/JP/15 STATE BANK OF BIKANER & JAIUPR, JAIUR. 4. APPELLANT CRAVES TO ADD, AMEND, ALTER OR MODIFY ANY OF THE GROUND OF APPEAL. 5. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 4. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT LD . CIT (A) RECTIFIED HIS ORDER UNDER SECTION 154 ON THE BASIS THAT THE IN THE APPE LLATE ORDER DATED 22.03.2012 THE LD. CIT (A) DID NOT CONSIDER THE JUDGMENT OF THE HO NBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BANK OF RAJASTHAN, 316 ITR 391 (RAJ.) THEREBY THE LD. CIT (A) CONFIRMED THE ADDITION ON ACCOUNT OF NET BROKEN PER IOD INTEREST. AGGRIEVED, THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THIS TRIB UNAL. 5. THE LD. COUNSEL FOR THE ASSESSEE HAS REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF AND SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HONBLE RAJASTHAN HIGH COURT IN THE ASSESSEES OWN CASE. 5.1. ON THE CONTRARY, THE LD. D/R OPPOSED THE SUBMI SSIONS. 5.2. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FI ND THAT THE HONBLE RAJASTHAN HIGH COURT IN D.B. INCOME TAX APPEAL NO. 446/2008 I N THE CASE OF CIT VS. SBBJ HAD FRAMED THE QUESTION OF LAW AS UNDER :- WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE ITAT HAS NOT ACTED ILLEGALLY AND PERVERSELY IN HOLDING THAT THE BROKEN PERIOD INTEREST ON PURCHASE OF SECURITIES IS DEDUCTIBLE U/ S 37 OF THE ACT AS BUSINESS EXPENDITURE ? THE HONBLE HIGH COURT AFTER CONSIDERING THE VARIOU S CASE LAWS DECIDED THE ISSUE AGAINST THE REVENUE. THEREFORE, RESPECTFULLY FOLLOW ING THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT, WE HEREBY DIRECT THE AO TO DELETE THE ADDITION. 5 ITA NO. 581/JP/12 & 138/JP/15 STATE BANK OF BIKANER & JAIUPR, JAIUR. 6. OTHER GROUNDS RAISED ARE GENERAL IN NATURE AND N EEDS NO ADJUDICATION. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 8. IN TOTALITY, THE APPEAL OF THE REVENUE IS DISMIS SED WHEREAS THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/08/201 7. SD/- SD/- FOE FLAG ;KNO DQY HKKJR (VIKRAM SINGH YADAV) (KUL BHARAT) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 31/08/2017. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE DCIT, CIRCLE-6, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- STATE BANK OF BIKANER & JAIPUR, JAI PUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 581/JP/2012 & 138/JP/2015} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR 6 ITA NO. 581/JP/12 & 138/JP/15 STATE BANK OF BIKANER & JAIUPR, JAIUR.