THE PR COMMISSIONER OF INCOME TAX-3 vs. M/S GMR HIGHWAYS LTD,

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ITA/613/2023HC KarnatakaKAHC01053830202323 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal at the admission stage. It held that the substantial question of law raised by the Revenue was already answered against the Revenue in a previous Karnataka High Court judgment.

What were the facts?

The Revenue appealed against an ITAT order concerning the disallowance of expenditure under Section 14A read with Rule 8D. The core issue was whether the disallowance could exceed the exempt income earned by the assessee.

What were the issues?

Whether the disallowance of expenditure under Section 14A read with Rule 8D is restricted to the amount of exempt income earned, and if the Tribunal's order was perverse in holding so.

Which sections of the Income-tax Act were involved?

Section 14A,Section 260A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

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NC: 2024:KHC:39227-DB ITA No. 613 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. 613 OF 2023 BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME TAX-3 KORMANGALA, BANGALORE.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(1)(2) BMTC COMPLEX, KORMANGALA, BANGALORE. …APPELLANTS (BY SRI. SANMATHI E. I., ADV.)

AND:

M/S. GMR HIGHWAYS LTD., NO.25/1, SKIP HOUSE, MUSEUM ROAD, BANGALORE-25 PAN:AADCG9020E. …RESPONDENT (BY SRI. BALRAM R RAO., ADV.)

THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 1643/BANG/2019 PASSED IN ITA NO.1643/BANG/2019, FOR THE ASSESSMENT YEAR 2015-2016 PRAYING TO (1) DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 25/05/2022 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, ‘B’ BENCH, BENGALURU, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEE’S CASE, IN APPEAL PROCEEDINGS IN ITA NO. 1643/BANG/2019 FOR A.Y.2015-2016 (ANNEXURE-A) AND GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.

Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:39227-DB ITA No. 613 of 2023

THIS APPEAL, COMING ON FOR ORDERS, 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.E.I.Sanmathi for appellants/Revenue and learned counsel Sri.Balaram R. Rao for respondent/assessee.

2.

This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated 25.05.2022 in ITA No.1643/Bang/2019, for the Assessment Year 2015-2016 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’), raising the following substantial question of law: “Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature in holding

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NC: 2024:KHC:39227-DB ITA No. 613 of 2023

that disallowance under Section 14A read with Rule 8D, cannot exceed the exempt income earned by the assessee during the year under consideration ignoring that Section 14A do not stipulate such restriction and the Central Board of Direct Taxes (CBDT) vide Circular No.5/2014, dated 11 February 2014 has clarified that Rule 8D of the Rules read with Section 14A of the Act provides for disallowance of expenditure even where taxpayer has not earned any exempt income in a particular year?”

3.

Learned counsel for the respondent submits that the substantial question of law raised by the Revenue is answered against the Revenue in PRAGATHI KRISHNA GRAMIN BANK VS. JOINT COMMISSIONER OF INCOME- TAX [2018] 95 TAXMANN.COM 41 (KARNATAKA). Therefore, he submits that the appeal needs to be rejected at the stage of admission itself.

4.

Learned Sri.E.I.Sanmathi., appearing for the appellants/Revenue is not in a position to dispute the same.

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NC: 2024:KHC:39227-DB ITA No. 613 of 2023

5.

In view of the above, appeal is dismissed at the stage of admission answering the substantial question of law against the appellants/Revenue and in favour of the respondent/assessee.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

NC CT:bms List No.: 1 Sl No.: 36

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