TaxTMI 
TaxTMI 
2021 (11) TMI 383
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....Bengaluru, in ITA.No.813/Bang/2011 dated 30.03.2016. 2. The appeal was admitted by this Court to consider the following substantial questions of law:- 1. "Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside the disallowance of expenditure of earning exempt income under Sec.14A of the Act by erroneously holding that no disallowance is called for under Section 14A of the Act by following earlier order which has not reached finality even when all the ingredients of Section 14-A are satisfied in the case of Assessee? 2. "Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside the disallowances of deprecation on HTM category....
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....sions of Section 115JB are not applicable to banking companies as no accounts are drawn up as per the requirement of Schedule VI of the Companies Act 1956 by following its earlier orders which has not reached finality? 6. "Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside relying upon Circular No.18 of 2015 dated 2.11.2015, the fact that investments are shown as Stock in Trade in books of account, loss/deprecation on account of fall in value of securities held by assessee bank should be allowed as deduction and therefore the income arising there from should also be treated as business income ignoring Section 45(2) which requires investments are to be treated as Stock in Trade? ....
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....issioner of Income-tax Vs. Syndicate Bank reported in (2020) 115 taxmann.Com 287 (Karnataka) has considered the identical issue and has held as under:- "9. From perusal of Section 14A of the Act, it is evident that for the purposes of computing the total income under this chapter, no deduction shall be allowed in respect of the expenditure incurred by the assessee in relation of the income which does not form part of his total income under the Act. The expenditure, the return of investment and cost of requisition are distinct concepts. Therefore the word 'incurred' in section 14A of the Act have to be read in the context of the scheme of the Act and if so read, it is clear that it disallows certain expenditures incurred to ....
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....was loss of Rs. 21.75 crores and the same was claimed as deduction, which was disallowed by the Assessing Officer and the same was confirmed by the learned CIT(A) as well as the Tribunal and the matter is pending adjudication before this Court. Having observed so, it has observed that in the year of merger of LCB with assessee-bank no deduction was allowed on the excess of liabilities over the assets, in such circumstances, the subsequent realization out of the assets of LCB cannot be brought to tax. But for want of such material evidence proceeded to confirm the order of the learned CIT(A) dismissing the appeal filed by the revenue. 8. It is well settled by law that if the disallowance is made at the time of merger of the LCB with the a....