THE PR. COMMISSIONER OF INCOME TAX vs. M/S. VECTRA ADVANCED

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ITA/137/2023HC KarnatakaKAHC01015982202330 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that the tax effect in the appeal was below the threshold stipulated in CBDT Circular No. 09/2024, making the appeal not maintainable. The appeal was disposed of with liberty to revive if exceptions applied.

What were the facts?

The Revenue filed an appeal against an ITAT order concerning the assessment year 2010-11. The appeal questioned whether income from a 99-year lease of a building should be treated as income from house property or other sources.

What were the issues?

The primary issue was the maintainability of the Revenue's appeal due to a low tax effect, as per CBDT circulars. A secondary issue concerned the classification of lease income.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:41290-DB ITA No. 137 of 2023

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH 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. 137 OF 2023 BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME TAX 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560095.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-7(1)(2), PRESENT ADDRESS DCIT, CIRCLE-7(1)(1), 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560095. …APPELLANTS (BY SRI. DILIP M.,ADVOCATE A/W SRI. RAVIRAJ Y V, ADVOCATE)

AND:

M/S. VECTRA ADVANCED ENGINEERING PVT. LTD., VECTRA HOUSE NO.15, 1ST MAIN ROAD, 6TH CROSS, GANDHINAGAR, BENGALURU-560009. PAN: AABCV 1355K …RESPONDENT (RESPONDENT SERVED)

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF THE INCOME TAX ACT, 1961, PRAYING TO FORMULATE THE

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:41290-DB ITA No. 137 of 2023

SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 2025/BANG/2018 DATED 05/01/2022 FOR ASSESSMENT YEAR 2010-2011 ANNEXURE - C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-7(1) (1), BENGALURU AND ETC.

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. Dilip. M., along with Sri. Raviraj. Y.V., for appellants/Revenue.

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 05.01.2022 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.2025/Bang/2018 for the assessment year 2010-11, raising the following substantial questions of law: “1. Whether on the facts and circumstances of the case and in law, the Tribunal is right in

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NC: 2024:KHC:41290-DB ITA No. 137 of 2023

law in holding that income from lease of building for 99 years is required to be treated as income from house property ignoring that assessing authority rightly treated said income as income from other sources as the assesse was not the owner of the building and considered the rental income from letting out factory building, plant/machinery?

2.

Whether on the facts & circumstances of the case and in law, the Tribunal’s order can be said as perverse in nature as Tribunal failed to observe that rental income received is inseparable as per the agreement?”

3.

It is noticed that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal would not be maintainable 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

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NC: 2024:KHC:41290-DB ITA No. 137 of 2023

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.: 4 Sl No.: 10

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