THE PR COMMISSIONER OF INCOME TAX vs. M/S CENTURY REAL ESTATE HOLDING PVT LTD

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ITA/226/2023HC KarnatakaKAHC01019441202307 November 2023Bench: P.S.DINESH KUMAR,T.G. SHIVASHANKARE GOWDA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Karnataka dismissed the appeal filed by the Revenue. The Court noted that the assessee's counsel had submitted that the question of law presented in this appeal had already been decided by the High Court in favour of the assessee in the case of The Commissioner of Income-Tax and Another Vs. M/s.Quest Global Engineering Services Pvt.Ltd. The Revenue's counsel did not dispute this submission. Consequently, the High Court answered the question of law in favour of the assessee and against the Revenue. The operative direction was to dismiss the appeal. No specific finding on the merits of the disallowance under Section 14A was recorded as the appeal was disposed of based on a prior precedent.

What were the facts?

The Revenue, comprising the Principal Commissioner of Income Tax and the Deputy Commissioner of Income Tax, has filed an appeal before the High Court of Karnataka against an order dated November 30, 2022, passed by the Income-Tax Appellate Tribunal (ITAT), Bengaluru. The appeal pertains to Assessment Year 2013-2014 and challenges the ITAT's decision which confirmed the order of the Appellate Commissioner. The ITAT's order, in turn, had upheld the order of the Deputy Commissioner of Income-Tax. The core of the dispute revolves around the disallowance made under Section 14A of the Income Tax Act, 1961.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that disallowance under section 14A needs to be restricted to the extent of exempt income, ignoring that such a computation is not prescribed under Rules and ignoring CBDT circulars in this aspect? (Question of law) Assessee's contention: The assessee, through its Senior Advocate, submitted that the question of law arising for consideration in this appeal has already been considered and answered by the High Court in favour of the assessee and against the Revenue in the case of The Commissioner of Income-Tax and Another Vs. M/s.Quest Global Engineering Services Pvt.Ltd. Revenue's contention: The Revenue's standing counsel did not dispute the submission made by the assessee's counsel.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, - 3 -

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NC: 2023:KHC:39790-DB ITA No. 226 of 2023

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF NOVEMBER, 2023 PRESENT THE HON'BLE MR JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR JUSTICE T.G. SHIVASHANKARE GOWDA INCOME TAX APPEAL NO. 226 OF 2023 BETWEEN:

1.

THE PR.COMMISSIONER OF INCOME TAX CENTRAL, 3RD FLOOR, C.R.BUILDING QUEEN’S ROAD BENGALURU-560 001

2.

THE DEPUTY COMMISSIONER OF INOCME TAX CENTRAL CIRCLE 2(2) 3RD FLOOR, C.R.BUILDING QUEENS ROAD BENGALURU-560 001 …APPELLANTS

(BY SHRI. M. DILIP, STANDING COUNSEL) AND:

M/S. CENTURY REAL ESTATE HOLDING PVT. LTD., NO.10/1, GROUND FLOOR LAKSHMINARAYANA COMPLEX PALACE ROAD VASANTH NAGAR BENGALURU-560 052 PAN:AADCC 0651M …RESPONDENT

(BY SHRI. M.V. SHESHACHALA, SENIOR ADVOCATE FOR SHRI. ARAVIND V CHAVAN, ADVOCATE)

THIS ITA IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961, PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL,

Digitally signed by ANUSHA V Location: HIGH COURT OF KARNATAKA

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NC: 2023:KHC:39790-DB ITA No. 226 of 2023

BENGALURU IN ITA NO.740/BANG/2022 DATED 30.11.2022 FOR ASSESSMENT YEAR 2013-2014 ANNEXURE-C CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(2), BENGALURU. THIS ITA, COMING ON FOR ADMISSION, THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING:

JUDGMENT

This appeal by the Revenue directed against order dated November 30, 2022 in ITA No.740/Bang/2022 passed by the ITAT1, Bengaluru, for A.Y.2013-14 has been admitted to consider the following questions of law: “Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that disallowance under section 14A needs to be restricted to the extent of exempt income ignoring that such a computation is not prescribed under Rules and ignoring CBDT circulars in this aspect?”

2.

Heard Shri M.Dilip, learned standing counsel for the Revenue and Shri M.V.Seshachala, learned Senior Advocate for the assessee.

3.

At the outset, Shri Seshachala submitted that the question of law, which arises for consideration in

1 Income Tax Appellate Tribunal

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NC: 2023:KHC:39790-DB ITA No. 226 of 2023

this appeal has already been considered by this court and answered in favour of the assessee and against the Revenue, in The Commissioner of Income-Tax and Another Vs. M/s.Quest Global Engineering Services Pvt.Ltd2.

4.

Shri Dilip does not dispute the above submission.

5.

In view of the above, the following; ORDER (i) Appeal is dismissed; and

(ii) Question of law is answered in favour of the assessee and against the Revenue.

No costs.

Sd/- JUDGE

Sd/- JUDGE

AV List No.: 1 Sl No.: 19

2 ITA No.133/2014 (DD 15.02.2021)

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