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

PDF · subscribers
ITA/250/2020HC KarnatakaKAHC01033493202023 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 the matter falls within exceptions to the 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 the valuation of closing stock and the computation of profits for technical services. The assessee argued that the appeal should not be entertained due to a low tax effect, citing CBDT circulars.

What were the issues?

Whether the Tribunal was correct in its findings regarding the valuation of closing stock and the computation of profits for technical services. Applicability of CBDT circulars regarding tax effect on revenue appeals.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 80HHC

AI-generated summary — verify with the full judgment below

- 1 -

NC: 2024:KHC:39247-DB ITA No. 250 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. 250 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 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.3959/MUM/2004

DATED

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

- 2 -

NC: 2024:KHC:39247-DB ITA No. 250 of 2020

18.03.2020 FOR ASSESSMENT YEAR 2000-2001 ANNEXURE-C CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM 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.3959/MUM/2004 for the assessment year 2000-01, raising the following substantial questions of law: “1. Whether on the facts and in the circumstances of the case, the Tribunal is

- 3 -

NC: 2024:KHC:39247-DB ITA No. 250 of 2020

right in law holding that the assessing authority could not have disagreed with the method of valuing closing stock of packing material, loose tools and consumables at Nil as the same was a consistent method followed by assessee despite specific reasons being given by the assessing authority for the same in the assessment order?

2.

Whether the Tribunal was correct in holding that the income from technical services cannot be reduce by 90% when computing profits of business as per Explanation (baa) of section 80HHC of the Act, despite this income having note been earned in the course of activities of export for the purpose of deduction under section 80HHC of the Act?

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

- 4 -

NC: 2024:KHC:39247-DB ITA No. 250 of 2020

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

BS List No.: 1 Sl No.: 64

More judgments on Section 260-A

All 2,570 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →