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NC: 2024:KHC:39246-DB ITA No. 609 of 2019
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD 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. 609 OF 2019 BETWEEN:
PRINCIPAL COMMISSIONER OF INCOME TAX (MANGALORE) C.R.BUILDING, ATTAVARA, MANGALORE 575001.
ASSISTANT COMMISSIONER INCOME TAX CIRCLE - (1), MANGALORE 575001. ...APPELLANTS (BY SRI. SANMATHI E I.,ADVOCATE)
AND:
M/S DELTA INFRALOGISTICS (WORLDWIDE) LTD., (FORMERLY HML AGENCIES PVT. LTD.,) NO.202, VEEKAY TOWERS, KULUR BANGRA ROAD, KULUR, MANGALORE 575001 PAN- AAACH7083 B ...RESPONDENT (BY SRI. ANNAMALAI, AND LAVA M.,ADVOCATES)
THIS ITA IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961, PRAYING TO SET ASIDE THE APPELLATE ORDER DATED 08.05.2019 PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, ‘C’ BENCH, BENGALURU IN ITA. No.774/BANG/2012 (ANNEXURE-A) FOR ASSESSMENT YEAR 2006-2007 AS SOUGHT FOR IN THIS APPEAL, AND TO GRANT SUCH OTHER RELIEF AS
Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA
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NC: 2024:KHC:39246-DB ITA No. 609 of 2019
DEEMED FIT, IN THE INTEREST OF JUSTICE AND ETC.,
THIS APPEAL, COMING ON FOR FINAL 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.Sanmathi E.I., for appellants/Revenue and learned counsel Sri Annamalai and Sri Lava M., learned counsels for the respondent/assessee.
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 08.05.2019 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA No.774/Bang/2012 for the assessment year 2006-07, raising the following substantial questions of law: “1. Whether under the facts and circumstances of the case, the Tribunal is
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NC: 2024:KHC:39246-DB ITA No. 609 of 2019
right in law in setting aside the disallowance made in respect of speed money expenditure even though said expenditure
even though said expenditure is of such nature which cannot be considered to be allowable under Section 37(1) of the Income Tax Act, 1961 and when the onus to prove the genuineness of expenditure claimed has not been discharged by the assessee?
Whether under the facts and circumstances of the case, the Tribunal is right in law in setting
aside the disallowance of expenses made by assessing authority under section 37(1) of the Act in respect of Tipper Mammol even when the assessing authority rightly made addition by holding that the said expenses are in nature of illegal gratifications and not genuine business expenditure?
Whether on the facts and in the circumstances of the case, the Tribunal’s order can be considered as perverse in nature as it has been held by Tribunal that illegal payments were not made to the
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NC: 2024:KHC:39246-DB ITA No. 609 of 2019
port officials ignoring the evidences seized during the course of search operations and the statements recorded during the course of search?
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.
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.
In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned
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NC: 2024:KHC:39246-DB ITA No. 609 of 2019
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
BS List No.: 1 Sl No.: 0