The Commissioner of Income-tax, Trichy v. The Lakshmi Vilas Bank Ltd
[Citation -2020-LL-1104-24]

Citation 2020-LL-1104-24
Appellant Name The Commissioner of Income-tax, Trichy
Respondent Name The Lakshmi Vilas Bank Ltd.
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 04/11/2020
Assessment Year 2004-05
Judgment View Judgment
Keyword Tags loss on sale of securities • broken period interest • expenditure incurred • revenue expenditure • stock-in-trade • brokerage • held to maturity
Bot Summary: Whether, on the facts and in the circumstances of the case and the grounds raised herein, the Tribunal was right in holding that the brokerage expenses with respect to securities of HTM category is allowable as revenue expenditure And iii. We need not labour much to decide the substantial questions of law framed for consideration, since, in the assessee's own case, identical questions in a slightly different form, were considered by the Hon'ble Division Bench of this Court in TCA.Nos. In view of the submission, the substantial questions of law are answered in favour of the assessee and against the revenue. The following question of law, though raised, has not been admitted:- 'Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right, in law, in holding that the broken period interest is to be treated as revenue expenditure' 6. The finding of fact is to the effect that securities are held as stock-in-trade and that the income from sale there from is offered to tax as revenue. In the light of the admitted facts as seen from the order of the authorities, the expenditure incurred by the assessee towards broken 4 period is liable to be allowed as revenue expenditure. Thus, following the above referred to decisions, the tax case appeal filed by the Revenue is dismissed and the substantial questions of law are answered against the Revenue.


TCA.No.207 of 2018 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 04.11.2020 CORAM HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.207 of 2018 & CMP.No.3368 of 2018 Commissioner of Income Tax, Trichy ...Appellant Vs Lakshmi Vilas Bank Ltd., Karur ...Respondent APPEAL under Section 260A of Income Tax Act, 1961 against order dated 29.1.2016 passed by Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai made in I.T.A.No.1209/Mds/2014 for assessment year 2004-05. For Appellant: Mr.M.Swaminathan, SSC assisted by Mrs.V.Pushpa, SC For Respondent: Mr.R.Vijayaraghavan for M/s.Subbaraya Aiyer Padmanabhan Judgment was delivered by T.S.SIVAGNANAM,J This appeal has been filed by assessee under Section 260A of Income Tax Act, 1961 ('the Act' for brevity) challenging order 1/5 http://www.judis.nic.in TCA.No.207 of 2018 dated 29.1.2016 made in I.T.A.No.1209/Mds/2014 on file of Income Tax Appellate Tribunal, Chennai, 'A' Bench ('the Tribunal' for brevity) for assessment year 2004-05. 2. appeal was admitted on 30.11.2018 on following substantial questions of law: i. Whether, on facts and in circumstances of case and grounds raised herein, Tribunal was right in holding that amortisation expenses with respect to securities of (held to maturity) HTM category is allowable as revenue expenditure? ii. Whether, on facts and in circumstances of case and grounds raised herein, Tribunal was right in holding that brokerage expenses with respect to securities of (held to maturity) HTM category is allowable as revenue expenditure ? And iii. Whether, on facts and in circumstances of case and grounds raised herein, Tribunal was right in holding that loss on sale of securities of (held to maturity) category is allowable as deduction? 3. We have heard Mr.M.Swaminathan, learned Senior Standing Counsel assisted by Mrs.V.Pushpa, learned Standing Counsel appearing for Revenue and Mr.R.Vijayaraghavan,, learned counsel appearing 2/5 http://www.judis.nic.in TCA.No.207 of 2018 on behalf of respondent assessee. 4. We need not labour much to decide substantial questions of law framed for consideration, since, in assessee's own case, identical questions in slightly different form, were considered by Hon'ble Division Bench of this Court in TCA.Nos.826 to 828 of 2008 dated 01.2.2017 and were answered against Revenue in following terms : 4. Parties would agree that issue stands considered and accepted by this court in respect of assessment years 1985-86 and 1986- 87 in Tax Case (Appeal) Nos.94 and 95 of 2002, wherein, facts and circumstances remain identical. In view of submission, substantial questions of law are answered in favour of assessee and against revenue. 5. following question of law, though raised, has not been admitted:- 'Whether, on facts and in circumstances of case, Income Tax Appellate Tribunal is right, in law, in holding that broken period interest is to be treated as revenue expenditure?' 6. Both parties would agree that question is substantial question of law that merits consideration. Accordingly, we admit 3/5 http://www.judis.nic.in TCA.No.207 of 2018 same. finding of fact is to effect that securities are held as stock-in-trade and that income from sale there from is offered to tax as revenue. In light of admitted facts as seen from order of authorities, expenditure incurred by assessee towards broken 4 period is liable to be allowed as revenue expenditure. There is no infirmity in order of Tribunal in this regard. 7. question stands answered in favour of assessee, following judgment of Bombay High Court in American Express International Banking Corporation Vs. CIT (258 ITR 601). appeals are dismissed. 5. Furthermore, Tribunal, in common impugned order, took note of decision of this Court in case of CIT Vs. Karur Vysya Bank Ltd. [TCA.No.2139 of 2008 dated 13.7.2009]. 6. Thus, following above referred to decisions, tax case appeal filed by Revenue is dismissed and substantial questions of law are answered against Revenue. No costs. Consequently, connected CMP is also dismissed. 04.11.2020 RS 4/5 http://www.judis.nic.in TCA.No.207 of 2018 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J RS To Income Tax Appellate Tribunal, 'A' Bench, Chennai. TCA.No.207 of 2018& CMP.No.3368 of 2018 04.11.2020 5/5 http://www.judis.nic.in Commissioner of Income-tax, Trichy v. Lakshmi Vilas Bank Ltd
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