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. 52 OF 2015 BETWEEN: 1. COMMISSIONER OF INCOME TAX, ATVARA, MANGALORE 2. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -2 (1), MANGALORE ...APPELLANTS (BY SRI.E I SANMATHI, ADVOCATE) AND: M/S CORPORATION BANK HEAD OFFICE, P.B.NO.88, MANGALADEVI TEMPLE ROAD, PANDESHWAR, MANGALORE-575 001 PAN:AAACC7245E RESPONDENT (BY SRI.BALRAM R RAO, ADVOCATE) 2 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 BY HON BLE COURT AS DEEMED FIT AND SET ASIDE APPELLATE ORDER DATED 19.09.2014 PASSED BY ITAT, B BENCH, BANGALORE, AS SOUGHT FOR, IN RESPONDENT-ASSESSEE S CASE, IN APPEAL PROCEEDINGS IN ITA NO.1310 AND 1393/BANG/2012 FOR A.Y.2010-11. THIS APPEAL COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED FOLLOWING: JUDGMENT This appeal has been filed by Revenue which has been admitted by Bench of this Court vide order dated 31.03.2015 on following substantial question of law. 1. Whether, on facts and in circumstances of case, Tribunal was right in law in deleting addition representing expenditure relating to earning of exempt income ignoring provisions of section 14A(1) of Act r.w.Rule 8D? 2. Whether on facts and in circumstances of case, Tribunal was right in law in deleting addition representing excess claim of bad debts 3 written off under Section 36(1)(vii) of Act, exceeding credit balance of provision made under section 36 (1)(viia) of Act when provisions of this section did not permit such action? 3. Whether on facts and in circumstances of case, Tribunal was correct in holding that depreciation on valuation of investment portfolio is allowable by treating investments held by assessee bank as stock-in-trade once RBI Master Circular read with CBDT Circular No.665 came into force? 2. When matter was taken up today, learned counsel for parties jointly submitted that substantial question of law No.2 is covered by judgment dated 24.01.2020 passed in ITA No.256/2011 by Division Bench of this Court. Accordingly, aforesaid substantial question of law is answered in favour of assessee. 3. Similarly, 3rd substantial question of law is answered by Bench of this Court in judgment dated 16.01.2020 in ITA No.18/2014. 4 4. Insofar as substantial question of law No.1 is concerned, from perusal of order passed by Assessing Officer, we find that Assessing Authority while invoking provisions of Rule 14(A) (1) read with Rule 8(D) of Income Tax Act has not disclosed any basis for expenditure in relation to exempt income while invoking aforesaid provision. Therefore, aforesaid substantial question of law is answered in negative and in favour of assessee. Accordingly, appeal is disposed of. Sd/- JUDGE Sd/- JUDGE BVK Commissioner of Income-tax, Mangalore / Assistant Commissioner of Income-tax, Circle -2(1), Mangalore v. Corporation Bank