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NC: 2024:KHC:39740-DB ITA No. 504 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH 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. 504 OF 2022 BETWEEN:
PR. COMMISSIONER OF INCOME TAX, BMTC COMPLEX, KORAMANGALA, BANGALORE.
THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(1)(1), BMTC BUILDING, KORAMANGALA, BENGALURU. …APPELLANTS
(BY SRI SANMATHI E I, ADVOCATE)
AND:
M/S INTEVA PRODUCTS INDIA AUTOMOTIVE PVT LTD., (FORMERLY MERITOR LVS INDIA PVT LTD), MANYATHA EMBASSY BUSINESS PARK, NI BLCOK, 4TH FLOOR, OUTER RING ROAD, K R RACHENAHALLI VILLAGE, BANGALORE 560045, PAN AABCM92623K. …RESPONDENT
(BY SRI K R VASUDEVAN, ALONG WITH SRI ANKUR P D, ADVOCATE)
Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA
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NC: 2024:KHC:39740-DB ITA No. 504 of 2022
THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 23/12/2020 PASSED IN IT(TP)A NO.2843/BANG/2017, FOR THE ASSESSMENT YEAR 2013-2014, PRAYING THAT THIS HON’BLE COURT MAY BE PLEASED TO DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON’BLE COURT AS DEEMED FIT AND ETC.
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
ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)
Heard the learned counsel Sri.Sanmathi.E.I., for appellants/Revenue and learned counsel Sri.K.R.Vasudevan along with learned counsel Sri.Ankur.P.D., for respondent/assessee.
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 23.12.2020 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in
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NC: 2024:KHC:39740-DB ITA No. 504 of 2022
IT(TP)A.No.2843/Bang/2017 for the assessment year 2013-14.
This
Court,
admitted the appeal on 11.09.2023 to consider the following substantial questions of law: “1. Whether on the facts and circumstances of the case, the Tribunal was right in holding that the taxpayer is entitled to working capital adjustment despite the fact that the taxpayer did not demonstrate with data as to how such difference impacted its profits?
Whether on the facts and circumstances of the case, the Tribunal is right in law in not relying on the decision of ITAT Chennai in the case of Mobis India Vs DCIT (TS-235-ITAT-2013(CHNY)- TP) where the claim of the assessee for working capital adjustment was rejected on the ground that the assessee was unable to justify the adjustment to be made on account of negative working capital as the assessee could not show the impact of the negative working capital on its margin?
Whether on the facts and circumstances of the case, the Tribunal is right in law in not recognizing that a reasonable accurate working
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NC: 2024:KHC:39740-DB ITA No. 504 of 2022
capital adjustment is not possible as the differences in working capital requirement is itself based on various assumptions?
Whether order of the Tribunal can be said as perverse in law in partly allowing appeal of assessee ignoring the materials on record and findings of TPO?”
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.
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.
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NC: 2024:KHC:39740-DB ITA No. 504 of 2022
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
MPK List No.: 2 Sl No.: 49