THE COMMISSIONER OF INCOME TAX AND ORS. Vs. KARNATAKA STATE INDUSTRIAL & INFRASTRUCTURE DEVELOPMENT CORPN. LTD.

JUDGEMENT

(1.) This appeal is directed against the orders passed by the Income Tax Appellate Tribunal (hereinafter referred to as 'ITAT'), Bangalore Bench "C" in ITA No.1515/Bang/2012, 02.05.2014 confirming the order of the Appellate Commissioner and the order passed by the Deputy Commissioner of Income Tax, Circle-11(5), Bangalore.

(2.) The respondent-assessee is an undertaking of Government of Karnataka engaged in financing industrial units. During the assessment year 2009-10, the assessee had made investments to the tune of Rs.1,24,04,17,118/- in securities on which it earned dividend income of Rs.2,51,95,563/-.

(3.) Before proceeding further, it is relevant to note the provisions of Section 14A of the Act and Rule 8D of the Rules, which read thus: