PR COMMISSIONER OF INCOME TAX-1 vs. SRI DINESH DEVRAJ RANKA

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ITA/616/2023HC KarnatakaKAHC01053822202323 September 2024Bench: S.G.PANDIT,C.M. POONACHA5 pages
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What did the High Court hold?

The High Court disposed of the appeal with liberty granted to the Revenue to revive it if the matter falls within the exceptions of the cited CBDT circulars. The substantial questions of law were kept open for future adjudication.

What were the facts?

The Revenue appealed against an ITAT order concerning capital gains for AY 2011-12. The appeal was filed under Section 260-A of the Income Tax Act. The assessee's counsel argued that the appeal should not be entertained due to a low tax effect, citing CBDT Circular No. 09/2024.

What were the issues?

Whether the ITAT's order was perverse in its interpretation of a Joint Development Agreement regarding the transfer of ownership and attraction of capital gains. The applicability of CBDT circulars regarding tax effect was also a key point.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 2(47),Section 53A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:39225-DB ITA No. 616 of 2023

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. 616 OF 2023 BETWEEN:

1.

PR. COMMISSIONER OF INCOME TAX-1 KORMANGALA, BANGALORE.

2.

THE ADDITIONAL COMMISSIONER OF INCOME TAX RENAGE-8, BMTC COMPLEX, KORMANGALA, BANGALORE. …APPELLANTS (BY SRI. SANMATHI E. I., ADV.)

AND:

SRI DINESH DEVRAJ RANKA (DECED) REP. BY SHRI NISHANTH DINESH RANKA, NO.31, RANKA CHAMBERS, CUNNINGHAM ROAD, BENGALURU-560052 PAN: AABMP8430M. …RESPONDENT (BY MISS JUNITA CHATTERGEE, ADV. FOR SRI S PARTHASARATHI, ADV.)

THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 13/03/2023 PASSED IN ITA NO.2786/BANG/2017, FOR THE ASSESSMENT YEAR 2011-2012, PRAYING TO (1) DECIDE THE FOREGOING QUESTION OF LAW AND /

Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:39225-DB ITA No. 616 of 2023

OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 13/03/2023 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, ‘C’ BENCH, BENGALURU, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEE’S CASE, IN APPEAL PROCEEDINGS IN ITA NO.2786/BANG/2017 FOR A.Y.2011-12 (ANNEXURE-A) AND GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.

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 Miss.Junita Chattergee for Sri.S.Parthasarathi, learned counsel 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 13.03.2023 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in

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NC: 2024:KHC:39225-DB ITA No. 616 of 2023

ITA.No.2786/Bang/2017 for the assessment year 2011-12, raising the following substantial questions of law: “1. Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in selectively considering the clauses of the Joint Development Agreement for reaching the conclusion, without appreciating that the assessee executed a registered irrevocable GPA and as per the other clauses agreed, “not to cancel the said GPA”, “not to obstruct possession of property”, conveyed interest in favour of Developer “to facilitate for sale and transfer of developer’s share of allocation”?

2.

Whether on the facts and circumstances of the case and in law, the Tribunal’s order can be said as perverse to conclude that ownership was not transferred ignoring that all privileges of ownership were confirmed by the JDA?

3.

Whether on the facts and circumstances of the case and in law, the Tribunal was perverse in there was no transfer of

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NC: 2024:KHC:39225-DB ITA No. 616 of 2023

immovable property in present assessment year and therefore, capital gains are not attracted ignoring that conditions for levy of capital gains are attracted as there was transfer of property as per Section 2(47) of the Act read with Section 53A of the Transfer of Property Act as well?”

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 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.

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NC: 2024:KHC:39225-DB ITA No. 616 of 2023

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

NC CT:bms List No.: 1 Sl No.: 37

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