IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER WEDNESDAY, THE 5TH NOVEMBER 2008 / 14TH KARTHIKA 1930 I.T.A.No.126 of 2008 ------------------------------------ (ORDER DATED 1.7.2005 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, IN INT.T.A.No.82/2004) (ASSESSMENT YEAR 1999-2000) .................... APPELLANT/APPELLANT/REVENUE:- ------------------------------------------------------- COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY STANDING COUNSEL FOR I.T. SRI.JOSE JOSEPH SRI.GEORGE K.GEORGE, SC FOR IT. RESPONDENT/RESPONDENT:- ---------------------------------------------- KERALA FINANCIAL CORPORATION, THIRUVANANTHAPURAM. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 05/11/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- H.L.Dattu,C.J. & A.K.Basheer, J. ------------------------------------------- I.T.A.No.126 of 2008 -------------------------------------------- Dated, this the 5th November, 2008 JUDGMENT H.L.Dattu,C.J. The Revenue, being aggrieved by the orders passed by the Income Tax Appellate Tribunal, Cochin Bench in Int.T.A.No.82/Coch/04, dated 1st July, 2005, is before us in this Income Tax Appeal, filed under Section 260A of the Income Tax Act, 1961 (“Act” for short). (2) The Revenue has framed the following questions of law for our consideration and decision. They are as under: “1. Whether, on the facts and in the circumstances of the case, interest on deposits with banks (other than Reserve Bank) is exempt under section 2(7) of the Interest Tax Act? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in confirming the direction of the Commissioner of Income Tax (Appeals) to exclude the interest on deposits received from banks from the chargeable interest holding that the interest on deposits with the banks are outside the provisions of Section 2(7) and Section 5 of the Interest Tax Act?” (3) The Tribunal, while rejecting the Revenue's appeal, has relied upon its earlier decision in Int.T.A.Nos.12, 13 and 14 of 1998 dated 23.04.2002, for the assessment years 1993-94, 1994-95 and 1995-96. I.T.A.No.126 of 2008 - 2 - (4) The Revenue, being aggrieved by the orders in Int.T.A.Nos.12, 13 and 14 of 1998 dated 23.04.2002, was before this Court in I.T.A.No.275 of 2002 and connected cases. (5) The parties in I.T.A.No.275 of 2002 are the same as parties in this appeal also. A Division Bench of this Court, while disposing of I.T.A.No.275 of 2002 and connected cases by its order dated 4th June, 2008, has rejected the Revenue's appeals. (6) Since the Tribunal has followed its earlier decision and since that decision of the Tribunal has been confirmed by this Court in I.T.A.Nos.275 of 2002 and connected cases, decided on 4th June, 2008, in our opinion, the questions of law framed by the Revenue requires to be answered against the Revenue and in favour of the assessee. (7) Accordingly, while rejecting the appeal, the questions of law framed by the Revenue is answered against the Revenue and in favour of the assessee. Ordered accordingly. H.L.Dattu Chief Justice A.K.Basheer vku/- Judge