SBI COMMERICAL & INTERNATIONAL BANK LTD, MUMBAI V. DCIT CIR 2(2), MUMBAI

ITA 6787/MUM/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84214 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 11-11-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 24-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, M UMBAI BEFORE HONBLE S/SHRI VIJAY PAL RAO (JM) , AND B.R.BASKARAN (AM) , . . , ./I.T.A. NOS.6786 & 6787/MUM/2010 ( / ASSESSMENT YEARS : 1997-1998 & 2002-03) STATE BANK OF INDIA, FINANCIAL REPORTING AND TAXATION DEPARTMENT, CORPORATE CENTRE, STATE BANK BHAVAN, 3 RD FLOOR, MADAME CAMA ROAD, MUMBAI-400021 . / VS. DY.. COMMISSIONER OF INCOME TAX CIRCLE 2(2), MUMBAI. ( / APPELLANT) .. ( / RESPONDENT) ./ ./ PAN/GIRNO.:AAACS8249J ! / APPELLANT BY : SHRI C NARESH ' ! /RESPONDENT BY SHRI LOVE KUMAR # ' $% / DATE OF HEARING : 11.11.2014 &' ' $% /DATE OF PRONOUNCEMENT : 14.11.2014. / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: BOTH THE APPEALS HAVE BEEN FILED BY THE ASSESSEE C HALLENGING THE ORDERS PASSED BY LD CIT(A)-5, MUMBAI AND THEY RELATE TO TH E ASSESSMENT YEARS 1997- 98 AND 2002-03. SINCE THE ISSUE URGED IN THESE APP EALS IS IDENTICAL IN NATURE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2. THE SOLITARY ISSUE URGED IN BOTH THESE APPEALS R ELATES TO THE VALIDITY OF ASSESSING THE BROKEN PERIOD INTEREST ARISING FROM T HE GOVERNMENT SECURITIES. 3. THE LD COUNSEL APPEARING FOR THE ASSESSEE SU BMITTED THAT THE ASSESSEE HAS BEEN ACCOUNTING THE BROKEN PERIOD INTEREST, BUT OFFERING THE SAME FOR TAXATION ONLY ON THE DUE DATES. ACCORDINGLY, IT DE DUCTED THE BROKEN PERIOD I.T.A. NOS.6786 & 6787/MUM/2010 2 INTEREST FROM THE TOTAL INCOME, SINCE THE SAID BROK EN INTEREST CANNOT BE SAID TO HAVE ACCRUED. THE ASSESSING OFFICER REJECTED THE S AID CLAIM OF DEDUCTION MADE IN BOTH THE YEARS UNDER CONSIDERATION AND THE SAME WAS ALSO UPHELD BY THE LD CIT(A). THE LD COUNSEL SUBMITTED THAT THE CO-ORDIN ATE BENCH OF TRIBUNAL HAS CONSIDERED AN IDENTICAL ISSUE IN THE ASSESSEES OWN CASE IN ITA NOS. 3479, 3480 & 661/MUM/2011 RELATING TO THE ASSESSMENT YEARS 200 3-04, 2004-05 AND 2005- 06 AND HAS DECIDED THE SAME IN FAVOUR OF THE ASSESS EE BY FOLLOWING THE JURISDICTIONAL HONBLE BOMBAY HIGH COURTS DECISION RENDERED IN THE CASE OF CIT VS. BANK OF RAJASTHAN (326 ITR 526), WHEREIN IT WAS HELD THAT THE INTEREST ON GOVERNMENT SECURITIES CAN BE SAID TO HAVE ACCRUED O NLY WHEN IT BECOMES DUE. ACCORDINGLY, THE TRIBUNAL HELD THAT THE BROKEN PERI OD INTEREST CAN BE BROUGHT TO TAX ONLY ON THE RELEVANT DUE DATES. THE LD COUNSEL SUBMITTED THAT THE HONBLE BOMBAY HIGH COURT HAS REITERATED THE VIEW TAKEN BY IT IN THE CASE OF BANK OF RAJASTHAN (SUPRA) IN YET ANOTHER CASE, VIZ., DIRECT OR OF INCOME TAX (INTL. TAXATION) VS. CREDIT SUISSE FIRST BOSTON (CYPRUS) LTD (2013)( 351 ITR 323). 4. WE ALSO HEARD LD D.R, WHO DID NOT DISPUTE THE SU BMISSIONS MADE BY THE LD A.R. 5. ACCORDINGLY, BY FOLLOWING THE DECISION OF H ONBLE JURISDICTIONAL HIGH COURT, REFERRED SUPRA, WE HOLD THAT THE BROKEN PERIOD INTE REST CAN BE SAID TO HAVE ACCRUED ONLY ON THE DUE DATE OF THE RESPECTIVE GOVE RNMENT SECURITIES AND HENCE THEY CANNOT BE TAXED IN THE MIDDLE OF THE PERIOD. ACCORDINGLY, WE SET ASIDE THE ORDERS OF LD CIT(A) IN BOTH THE YEARS AND DIRECT TH E ASSESSING OFFICER TO DELETE THE IMPUGNED ADDITION MADE. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSE SSEE ARE ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 14TH NOV, 2014 . &' # () * + 14TH NOV , 2014 ' ' , - SD SD ( / VIJAY PAL RAO ) ( . . ,/ B.R. BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ( # MUMBAI: 14TH NOV,2014. I.T.A. NOS.6786 & 6787/MUM/2010 3 . . ./ SRL , SR. PS !'# $#%! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. # 0$ ( ) / THE CIT(A)- CONCERNED 4. # 0$ / CIT CONCERNED 5. 6. 1, $ 2 , % 2 , ( # / DR, ITAT, MUMBAI CONCERNED ,3 4 / GUARD FILE. 5 # / BY ORDER, TRUE COPY 6 (ASSTT. REGISTRAR) % 2 , ( # /ITAT, MUMBAI