PR. COMMISSIONER OF INCOME TAX vs. SMT. SOWMYA SATHYAN

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ITA/182/2021HC KarnatakaKAHC01017060202124 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal, keeping the substantial questions of law open for future adjudication. The decision was influenced by CBDT circulars regarding monetary limits for filing appeals.

What were the facts?

The Revenue appealed against an ITAT order that set aside the Assessing Officer's and CIT(A)'s orders concerning the taxability of Transferable Development Rights (TDR). The core issue was whether TDRs were capital assets and if Section 50C or Section 56(2)(vii)(b)(ii) of the Income Tax Act were applicable.

What were the issues?

Whether TDRs are capital assets and if Section 50C applies, and whether Section 56(2)(vii)(b)(ii) was correctly invoked for the acquisition of TDRs.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 50C,Section 56(2)(vii)(b)(ii)

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:39707-DB ITA No. 182 of 2021

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF SEPTEMBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO. 182 OF 2021 BETWEEN:

1.

PR. COMMISSIONER OF INCOME TAX, BMTC COMPLEX, KORAMANGALA, BANGALORE.

2.

THE INCOME TAX OFFICER, WARD-1(4), MYSURU. …APPELLANTS (BY SRI SANMATHI E I, ADVOCATE) AND:

1.

SMT SOWMYA SATHYAN, NO.433, VISWA MANAVA, DOUBLE ROAD, KUVEMPU NAGAR, MYSURU-570023, PAN-AKQPS9870C. …RESPONDENT (BY SRI TATA KRISHNA, ADVOCATE)

THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 02/12/2020 PASSED IN ITA NO. 1224/BANG/2019, FOR THE ASSESSMENT YEAR 2014-2015 PRAYING THIS HONBLE COURT TO: A) 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 ETC.

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

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:39707-DB ITA No. 182 of 2021

CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE C.M. POONACHA

ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)

Heard the learned counsel Sri.Sanmathi.E.I., for appellants/Revenue and learned counsel Sri.Tata Krishna for respondent/assessee.

2.

The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated 02.12.2020 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.1224/Bang/2019 for the assessment year 2014-15.

3.

This

Court,

admitted the appeal on 27.09.2021 to consider the following substantial question of law: “1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside orders of CIT(A) and assessing officer by holding that the Transferable Development Right (TDR) acquired

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NC: 2024:KHC:39707-DB ITA No. 182 of 2021

by the assessee was not in the nature of capital assets and there Section 50C is not applicable to facts of present case?

2.

Whether on the facts and circumstances of the case and in law, is perverse in nature as Tribunal failed to appreciate that assessing authority right made addition in terms of section 56(2)(vii)(b)(ii) of the Act in respect of acquisition of Transferable Development Right (TDR) whereas all the conditions for invoking said provision are rightly satisfied in case of assessee and when section 50C is attracted as assessee has paid an amount of Rs.1.14 crores in the purchase of TDR while the market value of the property is Rs.5.16 crores?

3.

Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in setting aside addition make under section 56(2)(vii)(b)(ii) of the Act which was rightly confirmed by first appellate authority?”

4.

Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct

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NC: 2024:KHC:39707-DB ITA No. 182 of 2021

Taxes. It is also submitted that the aforesaid Circular binds the revenue.

5.

On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024.

6.

In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the question of law is kept open to be adjudicated in an appropriate proceeding.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

MPK VT:VN

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