KARNATAKA STATE CO-OPERATIVE APEX BANK LTD. Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This appeal under Section 260A of the Income Tax Act, 1961(hereinafter referred to as the Act for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment year 2009-10. The appeal was admitted by a bench of this Court vide order dated 30.10.2015 on the following substantial question of law:

(2.) Facts leading to filing of this appeal briefly stated are that the assessee is a Co-operative Apex Bank registered under the provisions of Karnataka Cooperative Societies Act, 1959 (hereinafter referred to as 'the Act' for short). A licence to carry on the business of banking has been issued by the Reserve Bank of India to the assessee under the provisions of Banking Regulation Act, 1949. The assessee filed the return of income for Assessment Year 2009-10 on 29.09.2009 and declared a total income of Rs.33,83,04,,750/-. The assessee subsequently filed a revised return and declared a revised income of Rs.33,61,92,270/- on 31.03.2010. The return was processed under Section 143(1) of the Act and was selected for scrutiny. The Assessing Officer by an order dated 31.12.2011 under Section 143(3) of the Act made several additions amounting to Rs.16,12,53,463/- and assessed income was determined at Rs.49,74,45,733/-. The additions included a sum of Rs.4,45,00,000/- being expenditure in the nature of monetary incentives to various District Central CoOperative Banks and Primary Agricultural Co-operative Societies.

(3.) The assessee thereafter filed an appeal before the Commissioner of Income Tax (Appeals) who by an order dated 27.03.2013 granted the relief with regard to disallowance of Rs.4,45,00,000/- and partly allowed the appeal. Being aggrieved, the revenue filed an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as 'the tribunal' for short). The tribunal by an order dated 20.02.2015 reversed the order of the Commissioner of Income Tax (Appeals) and disallowed the sum of Rs.4,45,00,000/- being incentive paid to various District Central Co-Operative Banks and Primary Agricultural Co-operative Societies. In the aforesaid factual background, the assessee has filed this appeal.