DEPUTY COMMISSIONER OF INCOME-TAX, BENGALURU vs. MATHIKERE RAMAIAH SEETHARAM, BENGALURU

ITA 1297/BANG/2025Status: DisposedITAT Bangalore28 November 2025AY 2020-21Bench: SHRI WASEEM AHMED (Accountant Member), SHRI RAHUL CHAUDHARY (Judicial Member)12 pages
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What did the Tribunal hold?

The Tribunal held that the issue was covered by its own previous order, where it was established that mere participation in a JDA does not convert a capital asset into stock-in-trade. The amounts received were advances, and no transfer of property had occurred. The Tribunal also found that disallowing genuine business interest expenditure resulted in a timing distortion without any actual revenue impact.

What were the facts?

The Assessing Officer treated revenue from a Joint Development Agreement (JDA) as business income and added it to the assessee's income. The CIT(A) deleted this addition, holding that the land was a capital asset and the amounts received were advances, not income. The ITAT noted that a similar issue was decided in favour of the assessee in prior assessment years.

What were the issues?

Whether revenue from a Joint Development Agreement constitutes business income and if genuine business interest expenditure can be disallowed due to accounting treatment differences.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 36(1)(iii),Section 2(47)(v),Section 2(47)(vi)

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Income Tax Appellate Tribunal, ‘B’ BENCH, BANGALORE

Before: SHRI WASEEM AHMED & SHRI RAHUL CHAUDHARY

For Appellant: Shri H.N Khincha, CA
For Respondent: Shri Muthu Shankar, CIT (DR)
Hearing: 26.11.2025Pronounced: 28.11.2025

PER BENCH :

This is a bunch of five appeals filed by the Revenue and the assessee against the order dated 25-02-2025 for the assessment years 2013-14,2017-18,2020-21 & 2021-22. First, we take up ITA No. 1027/Bang/2025, an appeal by the Revenue for the AY 2013-14

2.

The issue raised by the Revenue is that

The order continues below.

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