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3.a) On the facts and in the circumstances of the case and in law, the CIT(A) was not justified in deleting the addition made by the Assessing Officer by treating the exchange gain on repatriation of GDR issue proceeds of Rs.

1655518946/- as revenue in nature without appreciating the fact that GDR issue was utilized by the assessee company as circulating capital, which is a circulating commodity for the banking company.

b) On the facts and in the circumstances of the case and in law, the CIT(A) has erred in not considering that such gain had been disclosed by the assessee as taxable in the return of income.

40. Thus, considering the order of coordinate bench in assessee's own case for 1992-93, which was followed by the Tribunal in appeal for AY 1995-96 in 5470/M/2002 dated 26.07.2013 and allowed the similar ground of appeal. Thus, respectfully following the order of Tribunal the ground of appeal raised by the revenue is dismissed.

41. Ground No.2 relates to deleting the exchange Gain on repatriation GDR issue proceeds of Rs. 165,55,18,946/-. The ld. DR for the revenue filed a written synopsis on this ground. In the written synopsis the ld. DR contended that assessee bank created Global Depository receipt (GDR), but later on remitted GDR issue receipts for utilizing the same in India for business. Hence, at the time of issue of remittance of GDR issue proceeds whatever gain on account of exchange is there, it is the additional benefit, ITA No. 4736 & 4598/M/2010- State Bank of India not because of appreciation of GDR kept ideally but, while remitting the same, this gain came into account, which is incidental to the business. Therefore, such exchange gain is to be regarded as revenue income of a banking company, because of very purpose of remittance and utility thereof. The assessing officer rightly appreciated in the assessment order that GDR proceed is not for the purpose of capital asset, but for utilization as circulating capital itself in the normal course of banking business. Obviously, such income has incurred in the course of carrying on business as such GDR funds were utilized in normal course of business for advancing and investment, having interest element. As such exchange gain, as accepted by the appellant, in Note No.11 of the computation of income, has profit through exchange gain on inward remittance and is definitely revenue in nature. This arguments gets support from the proposition of the case of CIT versus Vs V.S. Dempo & Co (P) Ltd [1994] 72 taxman 134(Bom). On the other hand ld. AR of the assessee supported the order of CIT(A) and contended that in Note No. 11 to the return of income the assessee has explained the facts. The ld AR of the assessee argued that the gain has not occurred in the normal course of assessee's business. The GDR issue was in the nature of foreign currency held on capital account, accordingly, the profit through exchange gain on inward remittance is capital in nature. The ld AR for the assessee relied upon the decision in CIT Versus Canara Bank (63 ITR 328)(SC), Sutlej Cotton Mills Ltd versus ITA No. 4736 & 4598/M/2010- State Bank of India CIT (166 ITR 108), Laurids Knudsen Maskinfabrik Ltd Vs ITO (77 ITD