THE PR COMMISSIONER OF INCOME TAX CIT (A) vs. SHRI S SHIVASHANKARAPPA

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ITA/124/2020HC KarnatakaKAHC01021032202030 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the appeal, granting liberty to the Revenue to revive it if exceptions under CBDT circulars apply. The substantial questions of law were kept open for future adjudication.

What were the facts?

The Revenue filed an appeal under Section 260-A of the Income Tax Act against an ITAT order. The appeal questioned the Tribunal's justification for not doubting sales due to opening stock and the alleged perversity in the Tribunal's finding regarding a City Corporation letter.

What were the issues?

Whether the Tribunal was justified in not doubting sales based on opening stock and if the Tribunal's finding on a City Corporation letter was perverse.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:41691-DB ITA No. 124 of 2020

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH 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. 124 OF 2020 BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME TAX CIT (A) 2ND FLOOR SHREE TOWERS NO.565/A, A1, OPPOSITE TO DRR HOSTEL HADADI ROAD, DAVANAGERE-577 004

2.

THE ADDL. COMMISSIONER OF INCOME TAX DAVANAGERE RANGE, 2ND FLOOR, SHREE TOWERS, NO.565/A, A1, OPPOSITE TO DRR HOSTEL HADADI ROAD, DAVANAGERE-577 004 …APPELLANTS (BY SRI.SUSHAL TIWARI N., ADVOCATE)

AND:

SHRI S SHIVASHANKARAPPA NO.22/1-2, CHOWKIPET, DAVANAGERE-577 001 PAN: ASMPS 0084N …RESPONDENT (BY SRI. S PARTHASARATHI.,ADVOCATE)

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE,

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:41691-DB ITA No. 124 of 2020

ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 245/BANG/2013 DATED 25/10/2019 FOR ASSESSMENT YEAR 2005- 2006 ANNEXURE C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE ADDL. COMMISSIONER OF INCOME TAX, DAVANGERE RANGE, DAVANGERE AND ETC.

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

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. Sushal Tiwari. N., for appellants/Revenue and learned counsel Sri. S. Parthasarathi., learned counsel for the 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 25.10.2019 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA No.245/Bang/2013 for the assessment year 2005-06, raising the following substantial questions of law:

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NC: 2024:KHC:41691-DB ITA No. 124 of 2020

“1. Whether on the facts and circumstances of the case, the Tribunal is justified in holding that the sales cannot be doubted for the reasons that there was enough opening stock for the year to cover up entire sales when the purchases inward of the current year need to be genuine and established as they have direct impact on the closing stock of the current year and opening stock of the next year? 2. Whether on the facts and in the circumstances of the case, the order passed by the Tribunal can be said as perverse in nature since the Tribunal has erroneously held that the letter dated 11/12/2009 issued by City Corporation, Davanagere belong to F.Y.2006-07 and 2007-08 and not for F.Y.2004-05 when the assessee failed to produce any proof for payment of purchase of solid waste to prove that purchases were genuine nor maintained register evidencing the entry of sold waste nor utilization of solid waste in manufacturing process?”

3.

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

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NC: 2024:KHC:41691-DB ITA No. 124 of 2020

instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue.

4.

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.

5.

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 questions of law are kept open to be adjudicated in an appropriate proceeding.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

BS - List No.: 4 Sl No.: 0

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