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Income Tax Appellate Tribunal, Bengaluru Bench
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ITA No. 175 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF MARCH, 2023 PRESENT THE HON'BLE MR JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO. 175 OF 2022 BETWEEN:
THE PR. COMMISSIONER OF INCOME T AX CENTRAL CIRCLE C R BUILDING QUEENS ROAD BENGALURU 560 001
THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(2) C R BUILDING QUEENS ROAD BENGALURU 560 001 …APPELLANTS (BY SRI. M DILIP, STANDING COUNSEL FOR SRI ARAVIND K V., SENIOR STANDING COUNSEL)
AND:
M/S GMR ENTERPRISES PVT LTD (SUCCESSOR TO GMR HOLDINGS P. (LTD) NO.25/1 SKIP HOUSE MUSEUM ROAD BENGALURU 560 025 PAN-AACCR1554R …RESPONDENT (BY SRI. BALRAM R RAO.,ADVOCATE(VC))
THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW; ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN IT(TP)A NO. 2310/BANG/2019
Digitally signed by NIRMALADEVI Location: HIGH COURT OF KARNATAKA
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ITA No. 175 of 2022
DATED 28/10/2021 FOR ASSESSMENT YEAR 2015-2016 ANNEXURE- D AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(2), BENGALURU AND ETC.
THIS ITA COMING ON FOR HEARING, THIS DAY P.S. DINESH KUMAR J., DELIVERED THE FOLLOWING:
JUDGMENT
This appeal by the Revenue directed against the order dated 28.10.2021 passed in IT(TP)A No.2310/Bang/2019 by the ITAT1, Bangalore Benches "A", Bangalore, has been admitted to consider following substantial questions of law: 1. "Whether on the facts and in the circumstances of the case, the Tribunal is right in law holding that the disallowance made under section 14A of the Act has to be restricted to the exempt income earned ignoring the laws laid down in judicial pronouncements of the Hon'ble Apex Court in case of Maxopp Investments Ltd V/s CIT (reported in 402 ITR page 640) wherein it was held that investments in subsidiary companies also attract disallowance under section 14A of the Act and further in case of Godrej & Boyce Mfg Co.Ltd V/s DCIT (reported in 234 CTR page 1 Bombay High Court) has held that no deduction shall be allowed in respect of expenditure incurred by assessee in relation to such income which does not from part of the total income under the Act."
"Whether on the facts and in the circumstances of case, the order passed by Tribunal can be said as perverse in nature in not appreciating that CBDT Circular No.5 of 2104 dated 11/2/2014 has been in essence clearly stipulates that Section 14A disallowance is called for even if there is no exempt income and same is also
1 Income Tax Appellate Tribunal, Bengaluru Bench
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ITA No. 175 of 2022
stipulated in cases of Maxopp Investments and Godrej & Boyce Mfg Co. Ltd"?
"Whether on the facts and in circumstances of the case, the Tribunal is right in law in restricting the disallowances made under section 14A read with Rule (i)(ii) and (iii) of the Act though the conditions set out in said section and Rules are fully satisfied and as such entire disallowances made under said provision was liable to be upheld"? 2. Heard Shri. M. Dilip, learned Standing Counsel for the Revenue and Shri. Balram R. Rao, learned Advocate for the assessee. 3. At the outset, Shri. Balram Rao submits that issue involved in this appeal is covered by the decision of this Court in The Commissioner of Income Tax and another Vs. M/s. Quest Global Engineering Services Pvt. Ltd.,2 . 4. The said submission is not disputed by Shri. Dilip, in his usual fairness. 5. In view of the above, following: ORDER
i. Appeal is dismissed.
2 ITA No.133/2015 DD. 15.02.2021, High Court of Karnataka, Bengaluru.
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ITA No. 175 of 2022
ii. Questions of law are answered in favour of
the assessee and against the revenue.
No costs.
Sd/- JUDGE
Sd/- JUDGE
BS List No.: 1 Sl No.: 70