THE PR. COMMISSIONER OF INCOME TAX vs. M/S BHARAT MINES AND MINERALS

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ITA/531/2019HC KarnatakaKAHC01026865201927 September 2024Bench: S.G.PANDIT,C.M. POONACHA5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal with liberty to the revenue to revive it if it falls within exceptions to the CBDT circulars. The substantial questions of law were kept open.

What were the facts?

The Revenue appealed against an ITAT order allowing depreciation on mining assets. The assessee argued that the appeal should be dismissed due to low tax effect, citing CBDT circulars.

What were the issues?

Whether depreciation is allowable on mining assets when operations were suspended, and if the 'block of assets' concept applies when business activities were not conducted.

Which sections of the Income-tax Act were involved?

Section 32(1),Section 260-A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:40398-DB ITA No. 531 of 2019

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH 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. 531 OF 2019

BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME-TAX, 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095.

2.

THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1(2)(1), 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. …APPELLANTS

(BY SRI. DILIP M., A/W SRI. RAVIRAJ Y.V., ADVOCATES)

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:40398-DB ITA No. 531 of 2019

AND:

M/S. BHARAT MINES AND MINERALS, FLAT NO.101, PRIDE ELITE, NO.10, MUSEUM ROAD, BENGALURU 560 001. PAN AAIFB 5964G. …RESPONDENT

(BY SRI. K.R. PRADEEP, ADVOCATE FOR SMT. GIRIJA G.P., ADVOCATE)

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 15/02/2019 PASSED IN ITA NO.1989/BANG/2018, FOR ASSESSMENT YEAR 2014-2015, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE 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

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NC: 2024:KHC:40398-DB ITA No. 531 of 2019

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

Heard the learned counsel Sri.Dilip.M., along with Sri. Raviraj.Y.V., learned counsel for appellants/Revenue and learned counsel Sri.K.R.Pradeep and Smt. Girija.G.P., 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 15.02.2019 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.1989/Bang/2018 for the assessment year 2014-15.

3.

This Court, admitted the appeal on 20.11.2019 to consider the following substantial questions of law: "(a) Whether tribunal was correct in arriving at a conclusion that assessee is entitled to depreciation on the mining assets, despite the fact that mining operations were suspended and thereby assets having not been put to use for business during the relevant financial year?

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NC: 2024:KHC:40398-DB ITA No. 531 of 2019

(b) Whether the tribunal was correct in allowing depreciation on mining assets on the ground that assets belong to "Block of assets" though business activities were not conducted by the assessee as admitted, which would be mandatory under Section 32(1) of the Income Tax Act, 1961?"

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 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.

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NC: 2024:KHC:40398-DB ITA No. 531 of 2019

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

SMJ List No.: 4 Sl No.: 9

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