TaxTMI 
TaxTMI 
2026 (6) TMI 1123
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....ided hereinafter. 2. Briefly stated, the assessee is a public sector banking company that filed its return of income on 29 November 2016, declaring a total taxable income of Rs. 21,837,848,090. The return was selected for scrutiny through a notice issued under section 143(2) on 3 July 2017, followed by notices under section 142(1). Thereafter, pursuant to the assessment order, the assessee's total income was assessed at Rs. 97,276,907,662. 3. Aggrieved the assessee preferred an appeal before the learned CIT - A who deleted most of the addition by the appellate order. 4. Shri Shivananda Kalakeri, learned CIT-DR, vehemently referred to the assessment order and submitted that the learned CIT(A) deleted all additions by relying on decisions of the coordinate Benches or the Hon'ble High Court in the assessee's own case. He further submitted that, since most of these additions are being contested by the learned AO before higher forums, they are also being challenged in the present appeal. He placed strong reliance on the assessment order in support of all grounds of appeal. 5. Shri S. Anantha, Chartered Accountant and learned Authorized Representative, submitted a chart and c....
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....deduction relating to rural branch advances at Rs. 1907,22,64,670/- under section 36(1) (viia) read with Rule 6ABA. 8. Ld CIT A allowed the claim of the assessee based on Bangalore ITAT in assessee's own case in ITA No 392/Bang/2023 vide order dated 22/12/2023 for AY 2019-20. 9. After hearing the parties, we find that the identical issue has already been decided in the assessee's own case by the ITAT, "C" Bench, Bangalore, vide order in ITA No. 716/Bang/2024 dated 10 June 2024 for AY 2015-16. The same issue was also adjudicated by the jurisdictional ITAT in the assessee's own case for AYs 2015-16 and 2019-20, as noted above. Since the parties have shown that the facts are identical, and no contrary decision has been brought to our notice, we find no infirmity in the order of the learned CIT(A). Accordingly, Ground No. 1 of the appeal is dismissed. 10. Ground No 2 is as follows: - Whether on the facts and in circumstances of the case, the Ld. CIT(A) is right in allowing the unrealized gains on revaluation of forward contracts in foreign exchange? 11. The learned Assessing Officer disallowed unrealized gains on revaluation of forward contracts in foreign exchange....
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....A) did not err by allowing the Trust Expenses and not relying on the decision of the Supreme Court in the case of Sitaldas Tirathdas. 15. On perusal of the assessment order, it is seen that the assessee debited Rs. 32,78,19,000/- to the Profit and Loss Account as CSR expenditure, but added back only Rs. 10,30,27,120/-. Before the AO, the assessee submitted that the expenditure related to its business activities, including training of unemployed youth through rural development institutes, education, health care, community development, women empowerment, financial literacy, public awareness material, and training of SHGs/NGOs. It claimed that these activities, undertaken in line with Government of India guidelines for public sector undertakings, enhanced its goodwill and brand image and were therefore allowable as revenue expenditure. The AO rejected the claim by relying on section 135 of the Companies Act, 2013 and Explanation 2 to section 37(1) of the Act. He held that the expenditure was incurred to discharge a social obligation and represented application of income, relying also on the decision of the Hon'ble Supreme Court in Sitaldas Tirathdas [1961] 41 ITR 367 (SC). Accordin....
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.... apply to note-counting machines and electronic weighing machines, as their functions could not be equated with computers or ATMs. These assets were therefore treated as plant and machinery eligible for depreciation at 15%, and the AO was directed to recompute depreciation and rework the consequential addition accordingly. 21. After hearing the parties on careful consideration of the fact we find that the learned CIT - A has followed the binding judicial precedents of honourable Karnataka High Court and held that the automatic teller machines are computers and therefore they are entitled to depreciation at the rate of 60% instead of 15% allowed by the learned assessing officer. Therefore ground No. 5 of the appeal stands dismissed. 22. Ground nos. 6 to 9 are as under: - Ground No.6 Whether, on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in allowing relief to the assessee when the disallowance under section 14A was made by the Assessing Officer in respect of expenditure incurred by the assessee which was not related to earning exempt income? Ground No.7 Whether, on the facts and circumstances of the case,....
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.... proportionate interest expenditure and Rule 8D(2)(iii) for administrative expenditure. As regards interest disallowance, the learned CIT(A) observed that the Hon'ble Supreme Court has held that where interest-free funds exceed the investments, no disallowance of interest is warranted. Since the assessee claimed that its interest-free funds were higher than the investments considered for section 14A purposes, the AO was directed to verify the figures and delete the interest disallowance if the claim was found correct. Regarding administrative expenditure, the learned CIT(A) referred to the Hon'ble Supreme Court's observations, including CBDT Circular No. 18 of 2015 dated 2 November 2015, which states that shares and securities held by a bank, other than those maintained for Statutory Liquidity Ratio purposes, constitute stock-in-trade and the income therefrom is attributable to banking business. As the assessee had not furnished details distinguishing SLR and non-SLR investments, and the AO had not examined this aspect, the AO was directed to recompute the disallowance under section 14A read with Rule 8D(2)(iii) in light of the Hon'ble Supreme Court's decision in South Indian Bank.....
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....a similar disallowance for AY 2015-16 had been decided in favour of the assessee by the Bengaluru ITAT in ITA Nos. 111/Bang/2024 and 716/Bang/2024 dated 10 June 2024. The same view was also taken by the Hon'ble Karnataka High Court in CIT v. Canara Bank [147 taxmann.com 171 (Karn.)]. 30. On careful consideration of the decisions of the coordinate benches on the identical issue as well as the decision of the honourable Karnataka High Court in assessee's own case, in absence of any other change in the facts and circumstances of the case or any other judicial precedents shown by the learned departmental representative, we find no infirmity in the order of the learned CIT - A. Accordingly ground No. 10 of the appeal is dismissed. 31. Ground no. 11 is as under:- Whether on the facts and in circumstances of the case, the Ld. CIT(A) is right in law in allowing the depreciation on AFS by following the earlier orders which has not reached finality? 32. This ground is related to and connected with ground No. 10 of the appeal which is been dismissed by us in holding that there is no infirmity in the order of the learned CIT - A accordingly ground No. 11 also stands dismissed....
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....d that excess transfers in AYs 2009-10 to 2012-13 covered the deduction. The AO noted that the deduction for AY 2015-16 was Rs. 633.39 crores, while only Rs. 500 crores had been transferred to the special reserve. If the correct figure was considered, the total deduction for AYs 2008-09 to 2016-17 would be Rs. 4115,50,71,200/-, against transfers of Rs. 4000 crores, resulting in a shortfall of Rs. 115,50,71,200/-. The AO also found the eligible deduction, as per the assessee's arithmetic, to be Rs. 484,49,28,800/-, and held that the computation of profits eligible for special reserve was itself incorrect. He further observed that qualifying income from long-term financing must be restricted to income before deduction under section 36(1)(viii). Since the bank's overall profit was Rs. 2189 crores, the claim of Rs. 642 crores from long-term financing, constituting only 10% of total business, was considered unreasonable and excessive. The AO therefore rejected the assessee's computation and recomputed the eligible deduction under section 36(1)(viii). 38. On appeal, the learned CIT(A) identified three issues: (i) the correct quantum of deduction allowed in AY 2015-16; (ii) the method ....
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....he interest on securities/ investments is taxable only on specified dates when it became due 43. In the assessment order, the AO observed that the assessee had accounted for interest of Rs. 24,55,15,72,986/- on investments, which was due for payment after 31 March 2016, but excluded the same in the computation of total income on the ground that it was not taxable for the year. The assessee submitted that, relying on the decision of the ITAT in its own case, it had offered the income in the subsequent year, as the interest had not accrued during the relevant year. The AO rejected this contention, observing that the expression "interest accrued but not due" itself showed that the income had accrued as on 31 March 2016. Since the securities were held as business assets, the AO brought the corresponding income to tax in AY 2016-17 under section 28 of the Act. He also referred to the ICDS provisions, though applicable from AY 2017-18, to support the principle that interest on securities accrued at year-end should be taxed in that year. 44. On appeal, the learned CIT(A) held that the dispute concerned the taxability of interest accrued but not due, which had been credited to the Pr....