PR COMMISSIONER OF INCOME TAX-3 vs. M/S R MUNIRAJU (HUF)

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ITA/615/2023HC KarnatakaKAHC01053815202311 November 2024Bench: V KAMESWAR RAO,S RACHAIAH3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Karnataka held that the issue before it was covered by its own previous judgment in Principal Commissioner of Income-tax Vs. CPC Logistics Ltd., where the Revenue's appeal was dismissed on 01.12.2021. The learned counsel for the Revenue, while not disputing that the present appeal was covered by the CPC Logistics Ltd. judgment, could not ascertain if that judgment had been taken in appeal. Consequently, the High Court concluded that no substantial questions of law arose for consideration in the present appeal. The appeal filed by the Revenue was dismissed in favour of the assessee. No costs were awarded. The ITAT's order was not set aside.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax-3 and the Deputy Commissioner of Income Tax, filed an appeal before the High Court of Karnataka challenging an order dated 13.10.2022 passed by the Income Tax Appellate Tribunal (ITAT), Bengaluru. The ITAT's order pertained to assessment year 2010-11. The respondent is M/s. R. Muniraju (HUF). The appeal was filed under Section 260-A of the Income Tax Act, 1961. The cross-objections filed by the assessee, M/s. R. Muniraju (HUF), were dismissed by the ITAT. The High Court noted that the issue before it was covered by a previous judgment of the same court.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in holding that the guideline value of Rs.520 per sq ft, which is not the correct value of sale consideration, is to be adopted instead of Rs.2505/- per sq ft for computing the capital gain? (Question of law) 2. Whether on the facts and circumstances of the case and in law, the Tribunal was perverse in holding that there is no loss to the revenue since the assessee would be paying the capital gain at the time of the sale of the flats in the subsequent years i.e. AY 2013-14 to 2017-18? (Question of law) Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue argued that the ITAT's order was perverse on two counts: (i) adopting an incorrect guideline value for computing capital gains, and (ii) holding that there was no loss to the revenue based on future capital gains. The Revenue relied on the judgment of this Court in Principal Commissioner of Income-tax Vs. CPC Logistics Ltd., in IT Appeal Nos. 653 of 2016 and 11 of 2017.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

- 1 -

NC: 2024:KHC:45426-DB ITA No. 615 of 2023

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF NOVEMBER, 2024 PRESENT THE HON'BLE MR JUSTICE V KAMESWAR RAO AND THE HON'BLE MR JUSTICE S RACHAIAH INCOME TAX APPEAL NO. 615 OF 2023 BETWEEN: 1. PR. COMMISSIONER OF INCOME TAX-3 KORMANGALA, BANGALORE.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1(3), BANGALORE. …APPELLANTS (BY SRI. SANMATHI E I, ADVOCATE)

AND:

M/S R MUNIRAJU (HUF) RAMA NILAYA, ITTAMADU MAIN ROAD ARAHALLI VILLAGE, BENGALURU – 560 061. PAN: AAHM7410C …RESPONDENT (BY SRI. A SHANKAR, SENIOR ADVOCATE FOR SRI. CHANDRASHEKHAR, ADVOCATE) [VK NOT FILED]

THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON’BLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 13/10/2022 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, ‘B’ BENCH, BANGALORE.

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

CORAM: HON'BLE MR JUSTICE V KAMESWAR RAO and HON'BLE MR JUSTICE S RACHAIAH

Digitally signed by NARAYANA UMA Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:45426-DB ITA No. 615 of 2023

ORAL JUDGMENT (PER: HON'BLE MR JUSTICE V KAMESWAR RAO)

The appeal has been filed challenging the order dated 13.10.2022 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru in appeal proceedings in ITA No.54/Bang/2020 for the assessment year 2010-11.

2.

That appeal was filed by the Revenue. Suffice to state the cross objections filed by the respondent- M/s. R. Muniraju (HUF) have been dismissed.

3.

Mr. E.I. Sanmathi, learned counsel for the appellants raises the following substantial questions of law which are at Serial Nos. 1 and 3 (not 2) of the paper book which we reproduce as under: 1. “Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in holding that the guideline value of Rs.520 per sq ft which is not the correct value of sale consideration is to be adopted instead of Rs.2505/- per sq ft for computing the capital gain”?

3.

“Whether on the facts and circumstances of the case and in law, the Tribunal was perverse in holding that there is no loss to the revenue since the assessee would be paying the capital gain at the time of the sale of the flats in the subsequent years i.e. AY 2013-14 to 2017-18?”

- 3 -

NC: 2024:KHC:45426-DB ITA No. 615 of 2023

4.

The ITAT has relied upon the judgment of this Court in the case of Principal Commissioner of Income-tax Vs. CPC Logistics Ltd., in IT Appeal Nos. 653 of 2016 and 11 of 2017 wherein the appeal filed by the Revenue was dismissed on 01.12.2021.

5.

Mr. Sanmathi E.I., learned counsel for the appellants states, though he could not ascertain whether the judgment in Principal Commissioner of Income-tax Vs. CPC Logistics Ltd., has been taken in appeal, he does not dispute the issue which falls for consideration in this appeal is covered by the said judgment of Principal Commissioner of Income-tax Vs. CPC Logistics Ltd., (supra). If that be so, no substantial questions of law arises for consideration in this appeal. The appeal of the revenue is dismissed in favour of the assessee. No costs.

Sd/- (V KAMESWAR RAO) JUDGE

Sd/- (S RACHAIAH) JUDGE

JS, List No.: 1 Sl No.: 36

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