THE PR. COMMISSIONER OF INCOME -TAX vs. SHRI. B.N. RAMACHANDRA (HUF)

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ITA/10/2024HC KarnatakaKAHC01000053202426 September 2024Bench: S.G.PANDIT,C.M. POONACHA5 pages
AI SummaryDismissed

What did the High Court hold?

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

What were the facts?

The Revenue appealed against an ITAT order allowing certain expenditures claimed by the assessee under Section 48 of the Income Tax Act. The assessee 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 was correct in allowing expenditure claimed under Section 48, particularly concerning timing, proof, and cash payments. The applicability of CBDT circulars regarding tax effect was also a key consideration.

Which sections of the Income-tax Act were involved?

Section 48,Section 260-A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:40503-DB ITA No. 10 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH 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. 10 OF 2024

BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME -TAX, 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU-560 095.

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, PRESENT ADDRESS ITO, WARD-1 AND TPS, AAYAKAR BHAVAN, BELUR ROAD, VIJAYANAGAR, HASSAN-573 201. …APPELLANTS

(BY SRI. DILIP M., A/W SRI. RAVIRAJ Y.V., ADVOCATES)

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:40503-DB ITA No. 10 of 2024

AND:

SHRI. B.N.RAMACHANDRA (HUF), BYRAMUDI ESTATE, MATTADA GADDEM UDAYAVARA POST, SAKALESHPURA TALUK, HASSAN DT. PAN: AAHHB 9087R …RESPONDENT

(BY SRI. SOURABH R K., ADVOCATE)

THIS ITA / INCOME TAX APPEAL IS UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 07/07/2023 PASSED IN ITA NO. 1694/BANG/2013, FOR THE ASSESSMENT YEAR 2010-2011. PRAYING TO 1 FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN.

THIS APPEAL, COMING ON FOR 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

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NC: 2024:KHC:40503-DB ITA No. 10 of 2024

ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)

Heard the learned counsel Sri.Dilip.M., along with Sri. Raviraj.Y.V., learned counsel for appellants/Revenue and learned counsel Sri. Sourabh.R.K., 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 07.07.2023 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.1694/Bang/2013 for the assessment year 2010-11.

3.

This

Court,

admitted the appeal on 10.01.2024 to consider the following substantial questions of law: 1. Whether on facts and circumstances of the case and in law, the Tribunal is right in allowing the expenditure claimed u/s 48 of the Act to the extent of Rs. 3,27,00,000/- even though the entire expenditure is claimed to be incurred subsequent to the date of transfer of the immovable property?

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NC: 2024:KHC:40503-DB ITA No. 10 of 2024

2.

Whether on facts and circumstances of the case and in law, the Tribunal is right in allowing the expenditure claimed u/s 48 of the Act to the extent of Rs. 3,27,00,000/- by confirming the order of CIT (Appeal)?

3.

Whether on facts and circumstances of the case and in law, the Tribunal is right in allowing the expenditure claimed u/s 48 of the Act to the extent of Rs. 3,27,00,000/- even though the assessee has failed to prove the expenditure with evidences.?

4.

Whether on facts and circumstances of the case and in law, the Tribunal is right in allowing the expenditure claimed u/s 48 of the Act to the extent of Rs. 1,20,00,000/- even though the same is incurred in cash?

5.

Whether on facts and circumstances of the case and in law, the Tribunal is right in allowing the expenditure claimed u/s 48 of the Act to the extent of Rs.3,86,40,00/-(erroneously mentioned as Rs. 3,86,040,000/-) in the Tribunal order?

4.

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.

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NC: 2024:KHC:40503-DB ITA No. 10 of 2024

5.

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.

6.

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

SMJ List No.: 3 Sl No.: 24

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