IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY FRIDAY, THE 26TH NOVEMBER 2010 / 5TH AGRAHAYANA 1932 ITA.No. 520 of 2009() --------------------- ITA.298/COCH/2004 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT --------------------------------------- THE FEDERAL BANK LTD., ALUVA. BY ADV. SRI.JOSEPH KODIANTHARA, SENIOR ADVOCATE SRI.TERRY V.JAMES RESPONDENT(S): RESPONDENT ------------------------- 1. ASST.COMMISSIONER OF INCOMETAX, CIRCLE-1,ALUVA. 2. COMMISSIONER OF INCOME TAX KOCHI. ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 26/11/2010, ALONG WITH ITA NO. 523 OF 2009 & ITA NO. 539 OF 2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR, & BHABANI PRASAD RAY, JJ. -------------------------------------------- I.T.A. Nos. 520, 523 & 539 of 2009 -------------------------------------------- Dated this the 26th day of November, 2010 JUDGMENT Ramachandran Nair, J. The main question raised in the connected appeals filed by the assessee-Bank is whether the Tribunal was justified in not considering their claim for bad debts written off in respect of rural branches, which was raised as additional ground for the first time in the appeal filed before the Tribunal. 2. While the case of the appellant argued by senior counsel Sri. Joseph Markose is that the question raised is a pure question of law, which could be decided by the Tribunal based on records, the contention raised by standing counsel for the revenue is that the question is not a pure question of law and what is required to be found is the details of bad debts written off pertaining to rural branches, which requires enquiry in the matter. The Tribunal also rejected the additional ground raised for the reason that the same cannot be decided without enquiring the facts. As of now, the issue now stands decided ITA 523/2009 and connected cases 2 against the assessee by a Full Bench judgment of this Court reported in C.I.T. V. SOUTH INDIAN BANK LTD., (2010) 233 CTR 214 against which appeal is stated to be filed by some parties before the Supreme Court. If the judgment of this Court is reversed by the Supreme Court, then we feel, the issue could be considered by the assessing officer based on the details available on record. In other words, if the materials available on record are sufficient to consider and allow the claim based on the decision of the Supreme Court, we direct the assessing officer to reconsider the matter after the Supreme Court pronounces the judgment, and if such judgment leads to reversal of the judgment of this Court. 3. So far as the other issues raised in I.T.A.No. 520 of 2009 are concerned, the main issue is appellant's claim for written off bad debt, which was turned down by the lower authorities and confirmed by the Tribunal. What is clear from the orders is that the claim pertains to purchase of machinery leased out, in respect of which appellant claimed depreciation. However, when the claim of depreciation was considered, the department on enquiry found that the transaction itself is bogus inasmuch as no machinery was acquired by the assessee and the machinery stated to have been leased out was not in existence. ITA 523/2009 and connected cases 3 Before us, the assessee's case is that lease rental received for some years for the purchase of machinery was considered as interest income and so much so capital spent for purchase of machinery should be treated as loan which when written off as bad debts entitles the assessee for deduction. The Tribunal found that the whole transaction is bogus and so much so the claim for bad debt cannot be allowed. We do not find any justification to interfere with the finding of the Tribunal because assessee cannot be permitted to shift their stand once the transaction was found to be bogus. We therefore decline to consider this question raised by the assessee as a substantial question of law arising from the orders of the Tribunal. 4. Another additional issue raised in I.T.A. No. 523 of 2009 stands decided against the assessee by decision of this Court in the case in BROOKE BOND INDIA LTD. V. CIT, 225 I.T.R. 798 . Appeals are disposed of as above. (C.N.RAMACHANDRAN NAIR) Judge. (BHABANI PRASAD RAY) kk Judge. ITA 523/2009 and connected cases 4 kk