2014-VIL-677-BOM-DT

Equivalent Citation: [2014] 366 ITR 416 (Bom)

BOMBAY HIGH COURT

Income Tax Appeal No. 1079 of 2012

Date: 04.07.2014

THE COMMISSIONER OF INCOME TAX-2

Vs

M/s . LORD KRISHNA BANK LTD. (NOW MERGED WITH HDFC BANK LTD.)

For the Petitioner : Mr. Suresh Kumar
For the Respondents : Mr. J. D. Mistry, Mr. Atul Jasani

BENCH

S. C. Dharmadhikari And B. P. Colabawalla,JJ.

JUDGMENT

P.C.

We have heard Mr. Suresh Kumar, learned counsel appearing on behalf of the revenue and Mr. Mistry, learned Senior Counsel appearing on behalf of the assessee.

2. Our attention has been invited to the order passed by a Division Bench of this Court to which one of us is a party. That was passed in the case of Commissioner of Income Tax-2 v/s HDFC Bank Ltd., which is the successor in title of the present assessee. The order dated 11th March 2014 in Income Tax Appeal No.1105 of 2012, thus, directly covers the question 4(a), projected as substantial question of law. Mr. Suresh Kumar submits that the appeal survives insofar as question 4(b) on page no.3. That reads as under:

“Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was correct in holding that the precondition of notification in the Official Gazette, introduced by Finance Act, 1997, w.e.f.01.04.1998 was not applicable to the bonds purchased by the assessee during the FY 1997-98 relevant to 1998-99?

3. In that regard Mr.Suresh Kumar invites our attention to the assessment order and that of the Commissioner of Income Tax and submits that the concurrent findings should not have been reversed by the Tribunal particularly when it was not disputed that tax was deducted at source. Exemption in favour of Maharashtra State Road Development Corporation Ltd, (MSRDC) was not produced as is evidenced from a letter addressed by the said entity and contents of which are reproduced at page nos.82 and 83 of the paper book.

4. Mr. Mistry, learned Senior Counsel on the other hand submits that the requirement of a notification in the Official Gazette, as a condition precedent for exemption under Section 10 (23G) of the Income Tax Act, 1961 was introduced by the Finance Act, 1997 and is with effect from 1st April 1998. That is clear from the circular of the Central Board of Direct Taxes, a copy of which has been handed over by Mr. Mistry, to us. Our attention is invited to para 10.3 of the circular dated 23rd December 1998 in this behalf.

5. We have perused the order passed by the Tribunal and its conclusion at paragraph 16. In the light of this circular and equally the legal provisions, we find that once the bonds which had been issued, in respect of which exemption is claimed by the asseesee, were so issued on 18th February 1998, then, requirement of a notification in the official gazette as a condition precedent for exemption under Section 10(23G) of the I. T. Act, was inapplicable. In that light, the Tribunal was in no error in reversing the concurrent findings of facts. That were clearly vitiated by any error of law apparent on the face of the record and perversity.

6. Such order of the Tribunal in the given facts and circumstances cannot raise any substantial question of law. The Appeal, therefore, fails and it is dismissed.

 

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