DCIT Vs Bank of Baroda (ITAT Mumbai)
The ITAT Mumbai adjudicated a consolidated batch comprising 11 appeals filed by the Revenue and assessee and one cross objection concerning Bank of Baroda across Assessment Years 2009-10 to 2020-21. The Tribunal condoned delays ranging from 95 to 156 days in ten Revenue appeals after finding sufficient cause. The assessee is a public sector bank engaged in banking and related financial activities. The Tribunal considered common issues including disallowance under Section 14A read with Rule 8D(2)(ii), bad debts, interest accrued but not due, interest on perpetual bonds, amortisation of premium on Held to Maturity securities, regulatory penalties, wage-revision provisions, depreciation on investments, Section 115JB applicability, reopening of assessment, FCTR and assessment in the name of a non-existing entity.
In the assessee’s appeal for AY 2017-18, the Tribunal deleted the addition of ₹442.82 crore representing the opening balance of Foreign Currency Translation Reserve relating to monetary items of non-integral foreign operations. The Assessing Officer had taxed the amount by relying on CBDT Circular No. 10/2017 and ICDS-VI. The Tribunal held that Section 4 and Section 5 charge tax on the total income of the previous year and that the opening FCTR balance related to the preceding year. It also noted the ICDS-VI preamble giving precedence to the Act in case of conflict and held that the transitional provision could not be used to tax unearned gains of prior years. The assessee’s appeal was allowed.
