TMI Blog2020 (3) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... eal) No.522 of 2010 - - - Dated:- 2-3-2020 - Dr. Justice Vineet Kothari And Mr. Justice R. Suresh Kumar For the Appellant : Mr.J.Narayanasamy Senior Standing Counsel For the Respondent : Mr.V.S.Jaya Kumar JUDGMENT DR.VINEET KOTHARI, J. This Tax Case Appeal has been filed by the Revenue calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai dated 13.11.2009 for the Assessment Year 2001-02 holding in favour of the Assessee that the amount of stale Demand Drafts not claimed by customers and which had become barred by limitation cannot be treated as income of the Respondent Assessee Bank. 2. The relevant findings of the learned Tribunal are quoted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in and going out of this account every now and then throughout the year, and it is treated like a current account operated upon regularly doing in the course of business. Given the nature of transactions, the encashment of drafts after revalidation thereof, is a regular feature. Rather the common-sense demands that such drafts cannot be treated as unclaimable because timebarred, given the nature of banking transactions. Drafts issued, becoming stale is not an uncommon factor rather it is a usual and common feature in all banks. Unless the draft amount becomes, in fact, unclaimable which can be by virtue of multifarious facts available and not by guess work, this cannot be treated as bank's income. There is no such law which can conve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the court that this controversy is no longer resintegra and the Division Bench of this court in CIT v. Karnataka Vikas Grameen Bank in I. T. A. No. 100014 of 2014 and connected case, decided on December 14, 2015, has held, following the decision of the hon'ble Supreme Court in the case of CIT v. T. V. Sundaram Iyengar and Sons Ltd. reported in [1996] 222 ITR 344 (SC), that such an addition cannot be made under section 41(1) of the Act, since the liability of the assessee-bank to pay back the amounts to the customers in respect of such stale demand drafts and pay orders does not cease in law. The relevant extract from the judgment of the Division Bench of the court as contained in para 18 thereof including the extract from the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account. The Commissioner of Income-tax (Appeals) held that these amounts were not revenue receipts but were of capital nature. The provisions of section 41(1) were not attracted in the facts of this case because the assessee's liability to pay back the amounts to its customers had not ceased. The Tribunal agreed with this view.' (under lining is by us) 19. The Tribunal adverting to the above ruling has rightly deleted the sum of ₹ 58,38,581 added by the assessing authority by holding it as unsustainable in law. 5. Having perused the record, we are in respectful agreement with the aforesaid decision of the Division Bench of this court and we do not find any reason to take a different view of the matter and in view o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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