THE PR. COMMISSIONER OF INCOME TAX vs. M/S BPL LIMITED

PDF · subscribers
ITA/173/2022HC KarnatakaKAHC01008063202123 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court disposed of the appeal based on the submissions made by both parties. The assessee contended that the tax effect was below ₹2 Crores, making the appeal not maintainable in light of CBDT Circular No. 09/2024. The Revenue sought liberty to revive the appeal if the case fell under the exceptions mentioned in the circulars. The Court granted this liberty to the Revenue. Consequently, the appeal was disposed of with the liberty to revive, and the substantial questions of law were kept open to be adjudicated in an appropriate proceeding. No decision was made on the merits of the substantial questions of law raised.

What were the facts?

The Revenue, comprising the Principal Commissioner of Income Tax and the Deputy Commissioner of Income-Tax, has filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 25.10.2019 passed by the Income Tax Appellate Tribunal (ITAT), Bengaluru. The appeal pertains to assessment years 1989-90 to 1999-2000. The ITAT's order is challenged for allegedly allowing a bogus loss of ₹1,81,25,000/- on a leaseback transaction as a business loss, permitting the adjustment of this loss while computing income under Chapter XIV-B, deleting additions of ₹45,05,821/- and ₹35,92,358/- on excess depreciation claims, and allowing depreciation of ₹6,34,480/- on vehicles. The Revenue seeks to set aside the ITAT's order and confirm the order passed by the Deputy Commissioner of Income-Tax.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the Tribunal was right in law in allowing a loss of ₹1,81,25,000/- on account of a leaseback transaction as a business loss, when it was not substantiated by the assessee and the Tribunal failed to consider the assessing authority's reasoning, making the order perverse. 2. Whether the Tribunal was right in law in allowing the adjustment of a loss of ₹1,81,25,000/- claimed by the assessee while computing income under Chapter XIV-B of the Act, when such adjustment is not permitted by the provisions of that Chapter. 3. Whether the Tribunal's order was perverse in deleting additions of ₹45,05,821/- and ₹35,92,358/- on account of excess depreciation claims, on the basis that the disallowance was not based on any material seized during the search, thereby recording a finding contrary to the materials on record and Section 158BC of the Act. 4. Whether the Tribunal was right in law in allowing depreciation amounting to ₹6,34,480/- on vehicles, overlooking that the vehicles were put to use on/after 1/10/1994 and were eligible for only 12.5% depreciation. Assessee's contention: The assessee argued that the tax effect in the appeal is less than ₹2 Crores, and therefore, the appeal should not be entertained by the Revenue in view of CBDT Circular No. 09/2024 dated 17.09.2024, which binds the Revenue. Revenue's contention: The Revenue requested liberty to revive the appeal if the matter falls within the exceptions under Circular No. 09/2024 and Circular No. 5/2024 dated 15.03.2024.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 158BC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BENGALURU IN IT(SS

- 1 -

NC: 2024:KHC:39419-DB ITA No. 173 of 2022

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF SEPTEMBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO. 173 OF 2022 BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME TAX 5TH FLOOR BMTC BUIDLING 80 FEET ROAD, KORMANGALA BENGALURU 560 095

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-11 PRESENT ADDRESS DCIT,CIRCLE 1(1)(1) 2ND FLOOR, BMTC BUIDLING 80 FEET ROAD, KORAMANGALA BENGALURU 560 095 …APPELLANTS (BY SRI. RAVI RAJ Y V.,ADVOCATE A/W SRI. DILIP M, ADVOCATE)

AND:

M/S BPL LIMITED BPL TOWER NO.13, KASTURBA ROAD, BENGALURU 560 001 PAN AAACB 9461B …RESPONDENT (BY SRI. NARENDRA KUMAR J JAIN.,ADVOCATE)

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

- 2 -

NC: 2024:KHC:39419-DB ITA No. 173 of 2022

FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN IT(SS)A NO. 39/BANG/2008 DATED 25/10/2019 FOR ASSESSMENT YEAR 1989-1990 TO 1999-2000 ANNEXURE-C AND CONFIRM THE ORDER PASSED THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- 1(1)(1), BENGALURU AND ETC.

THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE C.M. POONACHA

ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)

Heard the learned counsel Sri Raviraj Y.V, along with learned counsel Sri Dilip M, for appellants/Revenue and learned counsel Sri Narendra Kumar J Jain, for the respondent/assessee.

2.

The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated 25.10.2019 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(SS)A.No.39/Bang/2008 for the assessment year 1989-90 to 1999-2000, raising the following substantial questions of law:

- 3 -

NC: 2024:KHC:39419-DB ITA No. 173 of 2022

“1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in allowing bogus loss of `1,81,25,000/- on account of lease back transaction as a business loss when same is not substantiated by assessee and Tribunal failed to consider the reasoning’s of the assessing authority and as such the order passed is perverse in nature?

2.

Whether on the facts and in the circumstances on the case, the Tribunal is right in law in allowing the adjustment of loss of `1,81,25,000/- claimed by assessee while computing the income in terms of Chapter XIV B of the Act when same is not permitted to be allowed as per provisions set out in said Chapter?

3.

Whether on the facts and in the circumstances of the case, the order passed by Tribunal can be said as perverse in nature since Tribunal has deleted addition of `45,05,821/- and `35,92,358/- on excess claim of depreciation on the basis that the said disallowance was not based on any material seized during the search and hence recorded a finding contrary to materials on record and section 158BC of the Act?

4.

Whether the Tribunal is right in law in allowing depreciation amounting to `6,34,480/- on the vehicles overlooking the fact that the vehicles were put to use on/after 1/10/1994 and were only eligible for 12.5% depreciation? ”

3.

Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the

- 4 -

NC: 2024:KHC:39419-DB ITA No. 173 of 2022

revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue.

4.

On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024.

5.

In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the questions of law are kept open to be adjudicated in an appropriate proceeding.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE ND List No.: 3 Sl No.: 31

More judgments on Section 260-A

All 2,570 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →