THE STATE BANK OF HYDERABD V. THE JOINT COMMISSIONER OF INCOME TAX

ITTA/131/2004

AI Insights

The case revolves around the taxation method of interest income on securities held by the State Bank of India for the assessment year 1994-95. The primary legal issue was whether the interest income should be computed on an accrual basis or a due basis. The Income Tax Appellate Tribunal had previously ruled that the interest should be taxed on an accrual basis. However, the State Bank of India appealed this decision, leading to the current judgment. The High Court examined precedents and rulings from other High Courts and the Supreme Court, ultimately deciding in favor of the appellant, the State Bank of India, by adopting the due basis method of taxation for the interest income.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 692293 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 04-01-2023
• Assessment Year: misc
• Other Referred Cases: State Bank of Travancore v. CIT, UCO Bank v. CIT, United Commercial Bank v. CIT, Global Trust Bank Ltd. v. DCIT, Credit Suisse First Boston (Cyprus) Limited v. Director of Income Tax (International Taxation), Commissioner of Income Tax v. State Bank of India
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J V PRASAD
• Assessee Lawyers: KARTHIK PUTTAMREDDY
• Keywords: Accrual basis; Income Tax; Interest on securities; Due Basis
• Section: 145; 260-A

Judgement Text

"IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD WEDNESDAY, THE FOURTH DAY OF JANUARY TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN THE HONOURABLE SRI JUSTICE N.TUKARAMJI INCOME TAX TRIBUNAL APPEAL NO: 13'l OF 2004 Appeal under section 260-A of the lncome Tax Act, 1961 against the order dated:25-6-2004 passed by the lncome Tax Appellate Tribunal, Hyderabad Bench-B Hyderabad in ITA No.225lHyd/1999 for the Assessment Year-1994-95. Preferred against the order of the Commissioner of lncome Tax (Appeal) Hyderabad Appellants Assistant Commissioner of lncome Tax in 21lTrlDCSR- 3/ClT (A)-ll98-99 dated.10.3.1997. Preferred against the order of the Deputy Commissioner of lncome Tax (Assts) Spl. Range 3, Hyderabad, in PAN/GIR No.S-74 dated:7.2. 1 997. Between: State Bank of lndia, Gunfoundry, Hyderabad. (Cause title is amended as per Court Order dated:2.1.20'18 in ITTA MP No 78412017) ...APPELLANT AND The Joint Commissioner of lncome Tax, Specia[ Range - lV, Basheerbagh, Hyderabad ...RESPONDENT Counsel for the Appellant: SRl. KARTHIK RAMANA PUTTAM REDDY, Advocate Counsel for the Respondent: SRl. J.V. PRASAD, SC FOR INCOME TAX The Court made the following: JUDGMENT I I THE HON'BLE THI] CHIEF TUSTICE UIIA]- BHTIYAN AND TI{E HON'BLE SRI JUSTICE N.TUKARAMJI I.T.'I\"A.NO .131 of 2004 JUDGMENI C,r rhe Llaa'bh the Cl,iel luro t 1ja/ Bhuyan) Heard Mr. IQrthik llamana Puttamreddy, learned counsel for the appellant and Mr. J.V.Prasad, learned Standing Counsel, 2. This appeal has been Frlcd by the asscssec 2.e., State Bank o[ India (as amended uide rhc court orclcr dated 02.01.2018 in I'|TAMP.No.781 f the assessee and against thc revcnuc. 13. Appeal is accordingly allowed. No costs. As a sequel, miscellaneous petitions, pending if any, sr.and ciosed. Sd/- B.S. CHIRANJEEVI JOINT REGI //TRUE COPY// SECTION OFFICER 1 . The Assistant Registrar, lncome Tax Appellant Tribunal Hyderabad Bench-B, Hyderabad. 2. The Commissioner, lncome Tax(Appeals), Hyderabad. 3. The Deputy Commissioner of lncome Tax (Assts) Special Range-3, Hyderabad. 4. One CC to SRl. KARTHIK RAMANA PUTTAM REDDY, Advocate [OPUC] 5. One CC to SRl. J.V. PRASAD, SC FOR INCOME TAX, Advocate [OPUC] 6. Two CD Copies I t To, u' ^,* l I HIGH COURT HCJ & NTRJ DATED:0410112023 JUDGMENT lTTA.No.l31 of 2004 ALLOWING THE IT\"TA WITHOUT COSTS. { st tt* N8 j. t.rE ST'1TE ''v 1, i DE . \": .- 2^ I I )l :: I I "