IN THE KARNATAKA HIGH COURT
ALOK ARADHE & H.T. NARENDRA PRASAD, JJ.
CIT v. Canara Bank
IT Appeal No. 419 of 2012
20 October, 2020
In favour of assessee
Appellant by: K.V. Araving, Advocate
Respondent by: T. Suryanarayana and Mahima Goud, Advocates
Alok Aradhe, J.
This appeal under section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the assessment year 2007-08. The appeal was admitted by a bench of this Court vide Order, dated 23-1-2013 on the following substantial question of law :--
(i) Whether the Tribunal was correct in holding that the amount from lapsed Demand Drafts, Gift Cheques etc., credited to P & L account is not liable to tax in the hands of the assessee, though no claims were made in respect of such Drafts and cheques and recorded a perverse finding?
(ii) Whether the Tribunal was correct in holding that the Commissioner was not correct in exercising his power under section 263 of the Act in respect of lapsed Demand Drafts, Gift Cheques etc., credited to P&L account and directing the assessing officer to disallow the claim of deduction?