Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2021 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (3) TMI 741 - HC - Income TaxAllowable revenue expenditure - expenditure towards computerization - as per revenue assessee has spent the same on networking of 125 branches with a centralized processing solution and the activity has a long term benefit, warranting capitalization of the expenditure spent for the same - tribunal has recorded the conclusion that the expenditure incurred by the assessee for computerization of its branches is revenue in nature - HELD THAT:- The order passed by the tribunal is cryptic in nature and suffers from vice of non application of mind. Even the contention by the revenue that the decision rendered in IBM India Ltd. [2013 (10) TMI 1225 - KARNATAKA HIGH COURT] does not apply to the case of the assessee has not been considered. No reasons have been assigned for holding that decision rendered in the case of IBM India Ltd. Applies to the facts of the case of the assessee. Therefore, in view of contentions raised by both the parties before us, we deem it appropriate to quash the order passed by the tribunal so far as it pertains to findings of substantial question of law No.1 and remit the matter to the tribunal for decision afresh in accordance with law after considering the rival submissions made on both sides. Deduction u/s 36(1)(vii) - assessee did not receive any income during the year and is not eligible for the deduction - HELD THAT:- The second substantial question of law is covered by decision of this court in 'COMMISSIONER OF INCOME TAX VS. SYNDICATE BANK' [2020 (2) TMI 1020 - KARNATAKA HIGH COURT] - For the reasons assigned in the aforesaid judgment, the second substantial question of law is answered in favour of the revenue and against the assessee. Amortization of cost over face value of investment "held to maturity" - Whether such securities have characteristic of capital asset rather than stock in trade and the investment done as per RBI Guidelines is not an allowable revenue expenditure in terms of Section 37(1) of the Act? - Tribunal holding that the provisions of Section 115JB are not applicable to the assessee, it being a banking company, even though there is no such provision/exclusion under the IT Act - HELD THAT:- For the reasons assigned in the decisions in CIT VS. KARNATAKA VIKAS GRAMEEN BANK [2015 (12) TMI 1420 - KARNATAKA HIGH COURT] and CIT VS. ING VYSYA BANK LTD. [2020 (1) TMI 1116 - KARNATAKA HIGH COURT] the third and fourth substantial questions of law are answered against the revenue and in favour of the assessee.
|