State Bank of India (Successor to Erstwhile State Bank of Indore) Vs DCIT (ITAT Mumbai)
Summary: The Mumbai ITAT partly allowed the appeals of State Bank of India, successor to erstwhile State Bank of Indore, and dismissed the Revenue’s appeals. For A.Y. 2005-06, the Tribunal held that where the assessee’s interest-free funds of Rs.49,032.66 crore exceeded investments of Rs.8,755 crore earning exempt income, the presumption was that the investments were made from interest-free funds and not borrowed funds. Following CIT v. HDFC Bank Ltd. [366 ITR 505], it directed deletion of the interest disallowance under Rule 8D(2)(ii). The issue concerning computation and adjustment of refund under Section 244A was restored to the Assessing Officer for denovo adjudication after providing adequate opportunity to the assessee. For A.Y. 2009-10, the Tribunal admitted the additional legal ground challenging an assessment made in the name of the non-existent State Bank of Indore. Relying on the assessee’s own case concerning State Bank of Bikaner and Jaipur and the Supreme Court decision in PCIT v. Maruti Suzuki India Ltd. [2019] 416 ITR 613 (SC), the Tribunal held the assessment order void ab-initio and allowed the additional ground. The same decision was applied to A.Ys. 2010-11 and 2011-12, while the Revenue’s cross appeals were dismissed. The official order records ITA Nos. 277, 278, 279 & 280/MUM/2022 for A.Ys. 2005-06, 2009-10, 2010-11 and 2011-12 and ITA Nos. 410, 411 & 365/MUM/2022 for A.Ys. 2009-10, 2010-11 and 2011-12, with pronouncement dated 20.09.2022. The opening paragraph of the supplied order, however, refers to A.Y. 2014-15 for ITA No. 277/Mum/2022, while the subsequent heading and cause title identify A.Y. 2005-06.
