1 IN HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS 31ST DAY OF JANUARY 2020 PRESENT HON BLE MR. JUSTICE ALOK ARADHE AND HON BLE MR. JUSTICE RAVI V. HOSMANI ITA NO. 154 OF 2012 BETWEEN: 1. COMMISSIONER OF INCOME-TAX-III, CENTRAL REVENUE BUILDINGS, QUEENS ROAD, BANGALORE-560 001 2. DEPUTY COMMISSIONER OF INCOME- TAX CIRCLE-1, UDUPI ...APPELLANTS (BY SRI.E I SANMATHI, ADVOCATE) AND: M/S SYNDICATE BANK H.O.MANIPAL RESPONDENT (BY SRI.T SURYANARAYANA, ADVOCATE) THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961 PRAYING TO DECIDE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED 2 BY HON BLE COURT AS DEEMED FIT AND SET ASIDE ORDER OF TRIBUNAL IN ITA NO.492/BANG/2009 & ITA NO.504/BANG/2009 DATED 13.01.2011, FOR ASSESSMENT YEAR 2005-2006, IN INTEREST OF JUSTICE AND EQUITY. THIS APPEAL COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED FOLLOWING: JUDGMENT Sri. E.I. Sanmathi, learned counsel for appellants. Sri. T. Suryanarayana, learned counsel for respondent. This appeal under Section 260 of Income Tax Act, 1961 has been filed by revenue which was admitted by Bench of this Court by order dated 29.11.2012 on following substantial questions of law. 1(a) Whether on facts and in circumstances of case, Hon ble tribunal were justified in law by restoring issue of write off of bad debts to assessing authority ignoring provisions of Section 36(1)(vii) which doesn t allow write off bad debts relating to urban branches and under 3 prudential write off without first setting off them against credit balance in Provision for Bad and doubtful Debts A/c? 1(b) Whether on facts and in circumstances of case, Hon ble tribunal were right in not considering decision of Full Bench of Kerala High Court in South Indian Bank Ltd., Vs/. CIT(2010) 191 Taxman 272 on above issue which was pleased in favour of Revenue? 2. Whether on facts and in circumstances of case, Hon ble tribunal were justified in law in allowing in full assessee s claim for Provision for Bad and Doubtful Debts u/s.36(1)(viia) amounting to Rs.399,43,71,239/- being 10% at average rural advances, even though assessee has debited only Rs.1,35,81,39,669/-? 4 3. Whether on facts and in circumstances of case, Hon ble tribunal was correct in holding that depreciation on valuation of investment portfolio is allowable by treating Investments held by assessee bank as stock-trade once RBI Master Circular read with CBDT Circular No.665 came into force? 4. Whether on facts and in circumstances of case, Hon ble tribunal was justified in not deciding about loss of revaluation of securities Rs.383,21,79,828/- which represent provision made to cover up probable diminution in value of assets, ignoring in process amended provisions of section 115JB? 5. Whether on facts and in circumstances of case, Hon ble 5 tribunal was justified in not deciding about amortization loss on revaluation of securities Rs.25,86,63,483/- which represent provision made to cover up probable diminution in value of assets, ignoring in process amended provisions of section 115JB? 2. When matter was taken up today, learned counsel jointly submitted that substantial question of law No.1(a) and No.1(b) were answered by judgment dated 21.10.2014 passed in ITA No.1066/2008. 3. Accordingly, aforesaid substantial questions of law are answered in favour of assessee. 4. It is further submitted that substantial question of law No.2 is covered by judgment dated 24.01.2020 passed in ITA No. 258/2011 has been answered. Accordingly, substantial question of law is 6 answered in terms of judgment dated 24.01.2020 passed in ITA No. 258/2011. 5. Learned counsel for parties jointly submitted that substantial question of law No.3 has been answered against revenue in decision rendered by this Court in case of KARNATAKA BANK LTD., VS. ASSISTANT COMMISSIONER CIT (34 TAXMAN.COM 150 (KAR.)). 6. Lastly it is urged that in view of answer to substantial question of law No.3, substantial questions of law No.4 and 5 have been rendered academic. Accordingly, appeal is disposed of. Sd/- JUDGE Sd/- JUDGE BVK Commissioner of Income-tax-III, Bangalore / Deputy Commissioner of Income-tax Circle-1, Udupi v. Syndicate Bank