DHANALAKSHMI BANK LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The issues arising in the above appeals for the assessment years 1996-97 to 2006-07 are, in certain of the years, common. There are also more than one appeal filed in two years, i.e., in 1996-97 and 2006-07 two appeals each. In 1996-97, the two appeals [I.T.A.Nos.456 & 643 of 2009] arise; one from the order of assessment under Section 143(3) of the Income Tax Act, 1961 [for brevity "the Act"] and the other from an assessment carried out under Section 143 read with Section 263 of the Act. In the year 2006-07, there are two appeals [I.T.A.Nos.126 & 116 of 2012]; one from the order of the Tribunal rejecting the appeal of the Department and the other from the order of the Tribunal allowing the appeal of the assessee.

(2.) In the years 1997-98 [I.T.A.No.1108/2009], 1998-99 [I.T.A.No.651/2009], 1999-2000 [I.T.A.No.1691/2009] and 2000-01 [I.T.A.No.717/2009] one of the questions is with respect to the dis-allowance of bad debts written off under Section 36(1)(vii). The specific contention of the assessee was that having debited the sums in the separate assessment years, in the P&L account and netted the same from the total advances outstanding in the balance sheet, there is a complete write off and there is no warrant to look into whether there has been a credit made to the specific account. The assessee had raised the contention before the Assessing Officer [for brevity "AO"] on the basis of a decision of the Gujarat High Court in Vithaldas H.Dhanjibhai Bardanwala v. C.I.T., 1981 130 ITR 95 (Guj.). We have in I.T.A.No.264 of 2009 [South Indian Bank Ltd. v. CIT] vide common judgment dated 04.12.2018, already found the issue against the assessee and in favour of the Revenue. This Court had also noticed the decision of the Hon'ble Supreme Court in Southern Technologies Ltd. v. Joint CIT, 2010 320 ITR 577, wherein the Gujarat High Court decision was reversed. Hence, this question for all these years has to be answered in favour of the Revenue and against the assessee.

(3.) In the years 2001-02 [I.T.A.No.712/2009], 2005-06 [I.T.A.No.98/2012] and 2006-07 [I.T.A.No.116/2012], a common question is raised of the disallowance of expenditure incurred under Section 14A. The said issue has been answered in favour of the assessee and against the Revenue by the Hon'ble Supreme Court in Commissioner of Income Tax v. Essar Teleholdings Ltd, 2018 401 ITR 445. The Hon'ble Supreme Court had categorically held that Section 14A would be applicable only from the year 2007-08. In the present appeals arising from the prior years, the dis-allowance made by the AO under Section 14A as affirmed by the Tribunal, has to be set aside. The question is answered in favour of the assessee and against the Revenue.