PR COMMISSIONER OF INCOME TAX-2 V. CANARA BANK

ITA/197/2024

AI Insights

The case involves an appeal by the Revenue against the order of the Income Tax Appellate Tribunal (ITAT), which had previously negated the Revenue's appeal following a Coordinate Bench decision of the High Court. The Revenue challenged the ITAT's decision, which held a second order under Section 263 of the Income Tax Act as null and void, citing that the first order under the same section had been set aside and confirmed by the High Court. The Revenue raised several substantial questions of law, including the applicability of a Supreme Court decision on intangible assets and the classification of trademark expenses as capital expenditure. The respondent, Canara Bank, defended the ITAT's decision, emphasizing adherence to the law as declared by the Coordinate Bench.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 699286 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 14-02-2025
• Assessment Year: misc
• Other Referred Cases: COMMISSIONER OF INCOME TAX vs. M/S. CANARA BANK, CIT V/s Finlay Mills Ltd
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MANASA ANANTHAN; TANMAYEE RAJKUMAR
• Assessee Lawyers: SANMATHI INDRAKUMAR; DILIP
• Keywords: Capital expenditure; Income tax appeal; Intangible assets; ITAT order; Trademark
• Section: 263; 32(1)(ii); 260-A

Judgement Text

" - 1 - NC: 2025:KHC:6665-DB ITA No. 197 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF FEBRUARY, 2025 PRESENT THE HON'BLE MR JUSTICE KRISHNA S DIXIT AND THE HON'BLE MR JUSTICE G BASAVARAJA INCOME TAX APPEAL NO.197 OF 2024 BETWEEN: 1. PR. COMMISSIONER OF INCOME TAX-2 BMTC BUILDING, KORAMANGALA, BENGALURU. 2. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2(1)(1), BANGALORE. …APPELLANTS (BY SRI. SANMATHI INDRAKUMAR AND SRI. DILIP.M, ADVOCATES) AND: CANARA BANK REP BY ITS DIRECTOR FM WING HEAD OFFICE, 112, J C ROAD, BANGALORE – 560 002. PAN NO. AAACC6106G …RESPONDENT (BY MS. MANASA ANANTHAN, ADVOCATE FOR SRI. TANMAYEE RAJKUMAR.,ADVOCATE) THIS INCOME TAX APPEAL IS FILED UNDER SEC. 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 30.1.2024 PASSED IN (IN ITA NO. 994/BANG/2023 FOR THE ASSESSMENT YEAR 2008-09 AND ETC., THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE KRISHNA S DIXIT AND HON'BLE MR JUSTICE G BASAVARAJA Digitally signed by LAKSHMINARAYAN N Location: High Court of Karnataka - 2 - NC: 2025:KHC:6665-DB ITA No. 197 of 2024 ORAL JUDGMENT (PER: HON'BLE MR JUSTICE KRISHNA S DIXIT) The Revenue is in appeal for laying a challenge to the ITAT order dated 30.01.2024 whereby its Appeal in ITA No.994/Bang/2023 has been negatived following a Coordinate Bench decision of this Court in ITA No.346/2018 between COMMISSIONER OF INCOME TAX vs. M/S. CANARA BANK disposed of on 10.02.2023. 2. The Revenue has raised the following substantial questions of law for consideration: a. Whether on the facts and circumstances of the case and in law, the Tribunal's order can be said as perverse in holding that second order passed under Section 263 of the Act is null and void as the first 263 order has been set aside by Tribunal which is confirmed by this Hon'ble Court, ignoring that both proceedings are different and as such the second 263 cannot be said d null and void? b. Whether on the facts and circumstances of the case and in law, the Hon'ble Tribunal was justified in following decision of Apex court in case of CIT V/s Finlay Mills Ltd (reported in 20 ITR page 475 (1951) which is applies to prior to the insertion of definition of - 3 - NC: 2025:KHC:6665-DB ITA No. 197 of 2024 intangible assets under Section 32 w.e.f 1/4/1999? c. Whether on the facts and circumstances of the case and in law, the Hon'ble Tribunal was justified in not appreciating that Section 32(1)(ii) clearly classifies Trademark as an intangible asset? d. Whether on the facts and circumstances of the case and in law, the Hon'ble Tribunal was justified in confirming the order passed by appellate authority dated 11/10/2023 when assessing authority rightly made disallowance entire logo expenses as same is capital expenditure as per Section 32 (1)9ii) of the Act? 3. Learned counsel appearing for the Assessee resists the appeal contending that there is no error attributable to the order of the Tribunal, since it has simply followed the law declared by the Coordinate Bench in M/S. CANARA BANK supra. The reply of the panel counsel that this judgment is put in challenge before the Apex Court in Dairy No.44987/2023 and therefore, the matter requires consideration at the hands of this Court is difficult to countenance, especially when there is no interim order granted by the Apex Court staying the said judgment. - 4 - NC: 2025:KHC:6665-DB ITA No. 197 of 2024 In the above circumstances, this appeal being devoid of merits is liable to be and accordingly rejected reserving liberty to the Revenue to seek revival depending upon the outcome of the challenge now pending before the Apex Court. In that connection all contentions of the parties are kept open. Costs made easy. Sd/- (KRISHNA S DIXIT) JUDGE Sd/- (G BASAVARAJA) JUDGE DR List No.: 1 Sl No.: 12 "