M/S GENEVA INDUSTRIES LTD vs. DEPUTY COMMISSIONER OF INCOME TAX

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ITA/457/2018HC KarnatakaKAHC01008651201805 April 2023Bench: P.S.DINESH KUMAR,C.M. POONACHA3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the appeal filed by the assessee. It set aside the order dated January 19, 2018, passed by the ITAT, Bengaluru, in ITA No. 1628/Bang/2013. The substantial question of law was answered in favour of the assessee and against the revenue. The High Court's decision was based on its own prior ruling in the case of Fabsun Engineering (P.) Ltd., Vs. Income-tax Officer, which was not disputed by the Revenue. The principle established is that if a similar substantial question of law has already been decided by the High Court in favour of the assessee, and the Revenue does not contest that precedent, the appeal should be allowed following the established precedent.

What were the facts?

The assessee, M/s. Geneva Industries Ltd., filed an appeal before the High Court of Karnataka against an order dated January 19, 2018, passed by the Income Tax Appellate Tribunal (ITAT), Bengaluru. The appeal pertained to Assessment Year 2009-2010. The core of the dispute involved a sum of Rs. 5,55,91,360/- which was an advance paid for the purchase of land, claimed by the assessee to be out of sale consideration. The assessee sought to claim a deduction under Section 54G of the Income Tax Act, 1961, which the ITAT had denied. The High Court admitted the appeal to consider a substantial question of law.

What were the issues?

1. Whether the Tribunal was correct in holding that a sum of Rs. 5,55,91,360/- advance paid for purchase of land out of the sale consideration amount was not eligible for deduction u/s. 54G of the IT Act contrary to the law declared by the Supreme Court in Fibre Boards (P) Ltd., vs. CIT (2015) 376 ITR 596 (SC)? Assessee's Contention: The learned Senior Advocate for the assessee argued that the question of law framed in the appeal has already been answered by the High Court itself in favour of the assessee and against the Revenue in the case of Fabsun Engineering (P.) Ltd., Vs. Income-tax Officer. Revenue's Contention: The learned standing counsel for the Revenue did not dispute the submission made by the assessee's counsel regarding the High Court's prior decision in a similar matter.

Which sections of the Income-tax Act were involved?

Section 54G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, - 3 -

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ITA No. 457 of 2018

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF APRIL, 2023 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR. JUSTICE C.M. POONACHA INCOME TAX APPEAL NO.457 OF 2018 BETWEEN: M/s. GENEVA INDUSTRIES LTD (FORMERLY GENEVA FINE PUNCH ENCLOSURES LTD) NO.140/1, PATTANDUR AGRAHARA VILLAGE WHITEFIELD ROAD BENGALURU-560 066 REP. BY ITS DIRECTOR SRI. T. MURALI KRISHNA REDDY …APPELLANT

(BY SHRI. M.V. SESHACHALA, SENIOR ADVOCATE FOR SHRI. K.V. VINODA KUMAR NAIDU, ADVOCATE)

AND:

1.

DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-11(3), BMTC BUILDING KORAMANGALA BENGALURU-560 095 2. PRL.COMMISSIONER OF INCOME TAX-1 C.R.BUILDINGS, QUEENS ROAD BENGALURU-560 001 …RESPONDENTS

(BY SHRI. E.I. SANMATHI, STANDING COUNSEL)

THIS ITA IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT 1961, ARISING OUT OF THE ORDER DATED 19.01.2018 PASSED IN ITA NO.1628/BANG/2013 FOR THE ASSESSMENT YEAR 2009-2010, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW AS STATED THEREIN AND ALLOW THE APPEAL

Digitally signed by ANUSHA V Location: HIGH COURT OF KARNATAKA

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ITA No. 457 of 2018

AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.1628/BANG/2013 DATED 19.01.2018 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE (ASSESSING OFFICER) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(3), BENGALURU AND ETC., THIS ITA, COMING ON FOR FINAL HEARING, THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING:

JUDGMENT

This appeal by the assessee directed against order dated January 19, 2018 in ITA No.1628/Bang/2013 for the A.Y.2009-10 passed by the ITAT1, Bengaluru, has been admitted to consider following questions of law; "Whether the Tribunal was correct in holding that a sum of Rs.5,55,91,360/- advance paid for purchase of land out of the sale consideration amount was not eligible for deduction u/s.54G of the IT Act contrary to the law declared by the supreme court in Fibre Boards (P) Ltd., vs. CIT (2015) 376 ITR 596 (SC)."

2.

Heard Shri M.V. Seshachala, learned Senior Advocate for the appellant and Shri E.I.Sanmathi, learned standing counsel for the Revenue.

3.

Shri Seshachala, learned Senior Advocate submits that the above question has been answered by this

1 Income Tax Appellate Tribunal

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ITA No. 457 of 2018

court in favour of the assessee and against the Revenue in Fabsun Engineering (P.) Ltd., Vs. Income-tax Officer2 and the same is not disputed by Shri Sanmathi.

4.

In view of the above, the following; ORDER (i) Appeal is allowed; (ii) Order dated 19.01.2018 in ITA No.1628/Bang/2013 passed by the ITAT, Bengaluru is set-aside; and (iii) 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.: 15

2 ITA No.193/2015 (DD. 14.10.2022)

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