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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF DECEMBER, 2021 PRESENT
THE HON’BLE MRS. JUSTICE S.SUJATHA AND
THE HON’BLE MR. JUSTICE S.VISHWAJITH SHETTY
I.T.A.No.555/2016 C/W I.T.A.No.556/2016
BETWEEN:
The Pr. Commissioner of Income-Tax, CIT(A)
5th floor, BMTC Building, 80 feet road, Kormangala,
Bangalore-560095.
The Asst. Commissioner of Income-Tax,
Circle-11(5), Present address
Circle-4(1)(1),
2nd floor, BMTC Building,
80 feet road, Kormangala,
Bangalore-560095.
… APPELLANTS (COMMON) (By Sri K.V.Aravind, Adv.)
AND:
M/s. KBD Sugars & Distilleries Ltd., No.17, Sankey Road, Bangalore-560020.
… RESPONDENT (COMMON) (By Sri V.Chandrashekar, for Sri M.Lava, Adv.)
ITA No.555/2016 is filed under Section 260-A of the Income Tax Act 1961, praying to set aside the orders passed by the ITAT, Bangalore, in ITA No.408/Bang/2014 dated 05.02.2016 and confirm the order of the Appellate Commissioner confirming the order passed by the Assistant Commissioner of Income Tax, Circle-4(1)(1), Bengaluru.
ITA No.556/2016 is filed under Section 260-A of the Income Tax Act 1961, praying to set aside the orders passed by the ITAT, Bangalore, in ITA No.505/Bang/2014 dated 05.02.2016 and confirming the order of the Appellate Commissioner and confirm the order passed by the Assistant Commissioner of Income Tax, Circle-4(1)(1), Bengaluru.
These appeals coming on for Final Hearing, this day, S.Sujatha J., delivered the following:
JUDGMENT
These appeals are admitted to consider the following substantial question of law. 1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition made under Section 14A r/w/s 8D(2)(ii) and (iii) holding that there was no fresh investment and the assessing authority has not expressed or recorded any satisfaction by identifying the expenditure which has been incurred in contravention to the provisions in Section 14A and also contrary to the Board's Circular No.14 of the 2001 and 5 of 2001?"
2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition made under Section 40A(2) of the Act by holding that there is no reason to interfere with the findings of the CIT(A) that the assessee is having its own free fund which is sufficient for advance the interest free loan to the sister concern event though the assessee has diverted the funds which has been established by the assessing authority?
Re: substantial question of law no.1: The said substantial question of law having been considered and answered in favour of the assessee and against the revenue in the case of CIT VS M/S. QUEST GLOBAL ENGINEERING SERVICE PVT. LTD., in ITA No.133/2015 dated 15.02.2021, the said substantial question of law is answered in favour of the assessee and against the revenue.
Re: substantial question of law no.2: The aforesaid issue being covered by the decision rendered by this Court in the case of CIT VS M/S. KBD SUGARS & DISTILLERIES LTD., in ITA No.170/2014 dated
14.12.2021, the said substantial question of law is answered in favour of the assessee and against the revenue.
Resultantly, the appeal stands dismissed.
Sd/- JUDGE
Sd/- JUDGE KK