2023 (10) TMI 1244 - HC - Income Tax

Addition u/s 14A - shares as held as stock-in-trade - HELD THAT - As assessee was a nationalised bank and that in terms of the judgment rendered in Maxopp Investment Ltd 2018 (3) TMI 805 - SUPREME COURT qua shares are held as stock-in-trade, the provisions of Section 14A would have no applicability. Tribunal has correctly deleted the disallowance made under Section 14A as the subject shares were concededly held as stock-in-trade. HTM Securities - This issue is covered by the decision rendered in Oriental Bank of Commerce 2016 (5) TMI 1514 - DELHI HIGH COURT Thus, having regard to the decision of the coordinate bench, in our view, no substantial question of law arises for our consideration qua this issue. Depreciation on temporary erections - As applying the principle of consistency, in the AYs in issue, the respondent/assessee should have been allowed depreciation on temporary structures. Interest on overdue deposits - Said issue is covered by the decision of Oriental Bank of Commerce v. Additional Commissioner of Income Tax. 2018 (1) TMI 904 - DELHI HIGH COURT . Disallowance of provision made for bad and doubtful debts u/s 36(1)(vii) - This issue is squarely covered in favour of assessee by virtue of the judgment rendered by the Supreme Court in Vijaya Bank v. CIT 2010 (4) TMI 46 - SUPREME COURT

Summary

Issues Involved:
The judgment concerns appeals related to Assessment Year (AY) 2014-15, AY 2015-16, and AY 2013-14.

First Issue [Addition on account of Section 14A]:
The Tribunal correctly ruled that Section 14A of the Income Tax Act did not apply to a nationalized bank holding shares as stock-in-trade, citing relevant Supreme Court judgments. The disallowance made under Section 14A was rightfully deleted due to the nature of the shares held.

Second Issue [HTM Securities]:
The decision of a coordinate bench in a previous case covered the second issue, hence no substantial question of law arose for consideration in this case regarding HTM Securities.

Third Issue [Depreciation on temporary erections]:
The Tribunal dismissed the department's appeal against the allowance of depreciation on temporary wooden structures, citing a previous decision in favor of the assessee. The principle of consistency supported the allowance of depreciation on temporary structures for the respondent/assessee.

Fourth Issue [Interest on overdue deposits]:
The issue was found to be covered by a previous decision of a coordinate bench, leading to the conclusion that no substantial question of law needed to be addressed concerning interest on overdue deposits.

Fifth Issue [Disallowance under Section 36(1)(vii) of the Act]:
The disallowance of the provision for bad and doubtful debts was upheld in favor of the respondent/assessee based on a Supreme Court judgment. No substantial question of law was identified in relation to this issue.

In summary, the judgment addressed various issues related to different assessment years, with the Tribunal's decisions being upheld based on legal precedents and previous rulings. The appeals were closed, and no substantial questions of law were found to arise in the issues discussed.