SRI SABIR SALIM AHMED vs. THE INCOME TAX OFFICER

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ITA/178/2011HC KarnatakaKAHC01039508201126 September 2012Bench: B.MANOHAR,K.SREEDHAR RAO2 pages
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What did the High Court hold?

The High Court of Karnataka, in view of its earlier decision in the case of FATHIMA BAI VS. INCOME TAX OFFICER, (2009) 32 DTR (KAR) 243, answered the framed question of law in favour of the assessee. The Tribunal's holding that the deposit of Rs. 5,00,000/- made by the appellant in a bank account before the due date for filing the return of income is not eligible for deduction under Section 54 of the Act was found to be unjustified. The ratio decidendi is that deposits made before the due date for filing the return of income are eligible for deduction under Section 54, as per the precedent set by the High Court. The appeal was disposed of accordingly, implying relief for the assessee.

What were the facts?

The assessee, Sri Sabir Salim Ahmed, filed an appeal under Section 260-A of the Income Tax Act, 1961, before the High Court of Karnataka. The appeal challenged an order dated January 21, 2011, passed by the Income Tax Appellate Tribunal (ITAT), Bangalore, in ITA No.941/Bang/2010. The assessment year in question is 2006-2007. The dispute pertains to the eligibility of a deposit of Rs. 5,00,000 made by the assessee in a bank account before the due date for filing the return of income for deduction under Section 54 of the Act. The High Court was asked to formulate substantial questions of law and allow the appeal.

What were the issues?

1. Whether the Tribunal was justified in holding that the deposit of Rs. 5,00,000/- made by the appellant in a bank account before the due date for filing the return of income is not eligible for deduction under Section 54 of the Act under the facts and circumstances of the appellant’s case? Assessee's contention: The assessee contended that the deposit of Rs. 5,00,000/- made in a bank account before the due date for filing the return of income should be eligible for deduction under Section 54 of the Act. The assessee relied on the facts and circumstances of the case. Revenue's contention: The revenue contended that the deposit was not eligible for deduction under Section 54 of the Act. The judgment does not record specific arguments made by the revenue, but implies their opposition to the assessee's claim.

Which sections of the Income-tax Act were involved?

Section 54,Section 260-A

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA, BANGALORE

DATED THIS THE 26TH DAY OF SEPTEMBER, 2012

PRESENT

THE HON'BLE MR. JUSTICE K.SREEDHAR RAO

AND

THE HON'BLE MR. JUSTICE B.MANOHAR

I.T.A. No.178 OF 2011

BETWEEN:-

Sri Sabir Salim Ahmed, Aged about 45 years, S/o. Sri Salim Ahmed, No.E-204, Ranka Corner, Cambridge Layout, Ulsoor, Bangalore – 560008. Appellant (By Sri S. Parthasarathi, Advocate)

AND:-

The Income Tax Officer, Ward-11(1), R.P. Bhavan, Nrupathunga Road, Bangalore-560001. Respondent (By Sri K.V. Aravind, Advocate)

This I.T.A. is filed U/s.260-A of the I.T. Act, 1961 arising out of Order dated 21.01.2011 passed in ITA No.941/Bang/2010, for the Assessment Year 2006-2007, praying that this Hon’ble Court may be pleased to: (i) formulate the substantial questions of law stated therein

2 and (ii) allow the appeal and set aside the order passed by the ITAT Bangalore in ITA No.941/Bang/2010, dated 21.01.2011, in the interest of justice and equity.

This appeal is coming on for hearing this day, SREEDHAR RAO, J., delivered the following:

J U D G M E N T

In view of the decision of this court in the case of FATHIMA BAI VS. INCOME TAX OFFICER, (2009) 32 DTR (KAR) 243, the question of law framed is answered in favour of the assessee. The question of law framed is as under:

“Whether the Tribunal was justified in holding that the deposit of Rs.5,00,000/- made by the appellant in a bank account before the due date for filing the return of income is not eligible for deduction under s.54 of the Act under the facts and circumstances of the appellant’s case?”

Accordingly, the appeal is disposed of.

Sd/- JUDGE

Sd/- JUDGE psg*

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