THE PR COMMISSIONER OF INCOME-TAX CIT(A) vs. M/S ABB LTD.,

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ITA/255/2020HC KarnatakaKAHC01033496202023 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 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 exceptions under CBDT circulars apply. The substantial questions of law were kept open for future adjudication.

What were the facts?

The Revenue appealed against an ITAT order that classified certain expenditures as revenue in nature. The assessee argued that the appeal should not be entertained due to low tax effect, citing CBDT circulars.

What were the issues?

Whether certain expenditures were revenue or capital in nature, and whether the appeal was maintainable in light of CBDT circulars regarding tax effect.

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:39247-DB ITA No. 255 of 2020

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. 255 OF 2020 BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME-TAX CIT(A) 5TH FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU-560095.

2.

THE ADDL. COMMISSIONER OF INCOME TAX RANGE-8(1) MUMBAI PRESENT ADDRESS DCIT CIRCLE-1(1)(1) 2ND FLOOR BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU-560095. ...APPELLANTS (BY SRI. RAVI RAJ Y V .,ADVOCATE)

AND:

M/S ABB LTD., (FORMERLY ASEA BROWN BOVERI LTD.,) KHANIJA BHAVAN RACE COURSE ROAD 2ND FLOOR, EAST WING BENGALURU-560001. PAN:AAACA 3834B ...RESPONDENT (BY SMT TANMAYEE RAJKUMAR., ADVOCATE)

THIS ITA IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961, PRAYING TO FORMULATE THE SUBSTANTIAL

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:39247-DB ITA No. 255 of 2020

QUESTIONS OF LAW STATED ABOVE AND ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA No.3240/MUM/2004

DATED 18.03.2020 FOR ASSESSMENT YEAR 2000-2001 ANNEXURE-C CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(1), BENGALURU 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.Raviraj Y.V. for appellants/Revenue and learned counsel Smt.Tanmayee Rajkumar, 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 18.03.2020 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA No.3240/MUM/2004 for the assessment year 2000-01, raising the following substantial questions of law:

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NC: 2024:KHC:39247-DB ITA No. 255 of 2020

“1. Whether on the facts and in the circumstances of the case, the Tribunal is right holding that the expenditure on Interior, cabling wire work, Civil work, Water Proofing, entrance canopy, IT babbling, Blinds, Civil and Plumbing, carpet laying work stations, Interior Work, and electric work were of Revenue nature just on the basis of the item description furnished by the assessee and not examining the detailed nature and purpose of work?

2.

Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature as Tribunal has held that assessing authority had not treated expenditure as Capital in nature whereas assessing authority had clearly held that the expenditure was of enduring nature and could not be of current repairs?

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:39247-DB ITA No. 255 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 question of law is kept open to be adjudicated in an appropriate proceeding. Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

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