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