Commissioner of Income-tax, Trichy v. The Karur Vysya Bank Ltd
[Citation -2015-LL-0609-67]

Citation 2015-LL-0609-67
Appellant Name Commissioner of Income-tax, Trichy
Respondent Name The Karur Vysya Bank Ltd.
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 09/06/2015
Assessment Year 2002-03
Judgment View Judgment
Keyword Tags legal requirement • suspense account • interest paid
Bot Summary: For Appellant : Mr.J.Narayanasamy Standing Counsel for Income Tax For Respondent : Mr.Quadir Hoseyn JUDGMENT This Tax Case is filed by the Revenue as against the order of the Income Tax Appellate Tribunal raising the following 2 substantial questions of law: Whether on the facts and in the circumstances of the case, the Tribunal was right in not considering the ground raised by the Revenue with respect to the issue of disallowance of brokerage paid Whether on the facts and in the circumstances of the case the Tribunal was right in not considering the ground raised by the Revenue with respect to the issue of disallowance of unclaimed balances 2. Learned Standing Counsel appearing for the Revenue submitted that the Tribunal had not considered the grounds raised by the Revenue and hence the order of the Tribunal has to be set aside. Per contra, learned counsel appearing for the assessee submitted that the said grounds raised by the Revenue has been answered by the Tribunal in paragraph Nos.12 and 14 respectively. The Revenue had raised the following grounds in I.T.A.No. After considering the submissions of the Revenue, we notice that we have heard appeal filed by the Revenue above said on 19.12.2012 which has been decided vide order dated 17.01.2013. After perusing the same, we find that the Revenue had raised ground No.5 in the said appeal identical to ground No.2 and 2.1 in the instant case and we have restored it to the file of the Assessing Officer. In appeal before the CIT(A), the assessee relied on the order of the ITAT Chennai in preceding years as well as the judgment of the Hon'ble Madras High Court in assessee's own case.


IN HIGH COURT OF JUDICATURE AT MADRAS DATED: 09.06.2015 CORAM: HONOURABLE MR.JUSTICE R.SUDHAKAR and HONOURABLE Ms.JUSTICE K.B.K.VASUKI Tax Case (Appeal) No.804 of 2013 Commissioner of Income Tax Trichy. .. Appellant versus Karur Vysya Bank Ltd., Erode Road, Karur 639 002. .. Respondent PRAYER: Tax Case Appeal filed under Section 260A of Income Tax Act, 1961 as against order dated 30.01.2013 made in I..T.A..No.900/Mds/2010 on file of Income Tax Appellate Tribunal, Madras 'A' Bench for assessment year 2002-2003. For Appellant : Mr.J.Narayanasamy Standing Counsel for Income Tax For Respondent : Mr.Quadir Hoseyn JUDGMENT (Judgment of Court was delivered by R.SUDHAKAR,J.) This Tax Case (Appeal) is filed by Revenue as against order of Income Tax Appellate Tribunal raising following 2 substantial questions of law: " Whether on facts and in circumstances of case, Tribunal was right in not considering ground raised by Revenue with respect to issue of disallowance of brokerage paid? Whether on facts and in circumstances of case Tribunal was right in not considering ground raised by Revenue with respect to issue of disallowance of unclaimed balances?" 2. Learned Standing Counsel appearing for Revenue submitted that Tribunal had not considered grounds raised by Revenue and hence order of Tribunal has to be set aside. 3. Per contra, learned counsel appearing for assessee submitted that said grounds raised by Revenue has been answered by Tribunal in paragraph Nos.12 and 14 respectively. 4. Heard learned Standing Counsel appearing for Revenue and learned counsel appearing for assessee and perused materials placed before this Court. 3 5. Before Tribunal, Revenue had raised following grounds in I.T.A.No.900/Mds/2010, which is subject matter of present appeal : "The C.I.T.(Appeals) failed to appreciate that RBI is regulator of banks and can (nay, is required to ) give directions to banks with regard to SLR requirements, Cash Reserve Ratio and manner in which accounts are to be kept by banks. Pursuant to powers given by Banking Regulations Act, RBI had asked banks to maintain portfolio of securities in three categories viz., Held to Maturity (HTM), Available For Sale (AFS) and Held For Trading (HFT). It implies that investment in HTM category of securities is to be treated as "investment" of capital nature. With view to meet legal requirement of SLR as per Banking Regulations Act, RBI has directed Banks that securities held as HTM category are intended to be held as investment and shown in books of accounts at cost; while securities of HFT & AFS categories are treated as stock-in-trade. 2.1 C.I.T. (Appeals) erred in deleting disallowance of brokerage without appreciating that securities in HTM category would be investment of capital nature. C.I.T.(Appeals) ought to have restricted relief for brokerage paid in respect of AFS & HFT category of securities." 3.... 4 3.1.... 4. C.I.T.(Appeals) erred in deleting addition with regard to unclaimed balances. C.I.T.(Appeals) failed to follow ratio of decision of Apex Court in case of T.V.Sundaram Iyengar & Sons 222 ITR 344 (SC). balances lying unclaimed with bank for more than 3 years ought to have been confirmed by C.I.T.(Appeals) as these are to be treated as income in light of above referred decision." 6. It is seen from order of Tribunal that with regard to first question of law raised herein, Tribunal has considered grounds raised by Revenue and answered same in paragraph No.12, which reads as follows: "12. After considering submissions of Revenue, we notice that we have heard appeal (supra) filed by Revenue above said on 19.12.2012 [which has been decided vide order dated 17.01.2013]. After perusing same, we find that Revenue had raised ground No.5 in said appeal identical to ground No.2 and 2.1 in instant case and we have restored it to file of Assessing Officer. relevant findings are reproduced as under: "45. We have heard rival contentions of both parties and also perused assessment order as well as order of CIT(A) along with case law cited. It transpires that assessing authority had held that assessee's claim of interest paid on 5 securities as capital expenditure. In appeal before CIT(A), assessee relied on order of ITAT Chennai in preceding years as well as judgment of Hon'ble Madras High Court in assessee's own case. At same time, we also find that crucial factual aspect of issue in question have nowhere been adverted to CIT(A). In operative part of CIT(A) that it has been simply observed that in assessee's case Hon'ble High Court as well as Coordinate Benches of ITAT have decided issue in assessee's favour. This in our opinion, is nothing but sketchy finding of CIT(A). At same time, we cannot lose sight of fact that we have remained ground No.III back to Assessing Officer. In those circumstances, in order to avoid multiplicity of proceedings of same year before Assessing Officer in assessee's appeal and CIT(A) in Revenue's appeal, we find it appropriate that issue deserves to be redecided by Assessing Officer by way of detailed order in accordance with law after according opportunity of hearing to assessee. We also make it clear that we have not expressed any opinion on merits of issue. Therefore, Assessing Officer would be at liberty to examine issue afresh in light of judgment of Hon'ble Jurisdictional High Court above said as well as various orders of Coordinate Bench of ITAT, Chennai in earlier assessment years and case law of CIT vs. ING Vysya Bank Ltd. (supra). assessee would also be entitled to place reliance on any other case law, if so advised. ground is therefore, restored back to file of Assessing Officer." 7. With regard to second question of law, Tribunal considered said ground and answered same in paragraph No.14, which reads as follows: 6 "14. So far as grounds No.4 and 7 of Revenue are concerned, both parties before us have been fair enough to clarify that issues qua unclaimed balances, unclaimed stale drafts and unclaimed surplus jewellery auctions are pari materia to those decided in I.T.A.No.899/Mds/2010 for assessment year 2001-02 vide order dated 17.01.2013 (supra). While upholding CIT(A)'s order deleted disallowance on account of surplus amount received from jewellery auction, we have held as under: "63. Facts apropos are that in its profit and loss account, assessee had raised claim of Rs.1,62,971/- as expenses, which had been received from auction of jewellery. Its explanation before Assessing Officer was that when any balance is left in auction, same has to be paid to borrowers concerned. Assessing Officer did not agree to assessee's contention; in whose opinion, if any borrower did not turn up to collect surplus amount in question, same had to be retained in suspense account being liability. Accordingly, he followed assessment orders of earlier assessment years and made addition in assessee's total income." 8. In view of above, we find no justification to accept plea of Department that grounds raised were not considered by Tribunal. Department, if aggrieved should have file appeal on merits. questions of law raised does not merit consideration in view of clear finding of Tribunal. 7 9. Accordingly, this Tax Case (Appeal) stands dismissed. No costs. Index: Yes / No (R.S.,J.) (K.B.K.V.,J.) Internet: Yes / No 09.06.2015 sl To 1. Income Tax Appellate Tribunal, Madras 'A' Bench. 2. Commissioner of Income Tax (Appeals), Tiruchirapalli. 3. Assistant Commissioner of Income Tax, Company Circle-I, Trichy. R.SUDHAKAR,J. AND K.B.K.VASUKI,J. 8 sl Tax Case (Appeal) No.804 of 2013 09.06.2015 Commissioner of Income-tax, Trichy v. Karur Vysya Bank Ltd
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