PRINCIPAL COMMISSIONER OF vs. M/S.SUBRAMANYA CONSTRUCTIONS AND DEVELOPMENT CO.LTD

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF APRIL 2021 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE M.G.S. KAMAL I.T.A. NO.676 OF 2018 BETWEEN: 1. PRINCIPAL COMMISSIONER OF

INCOME TAX-6

BMTC COMPLEX

KORAMANGALA, BENGALURU. 2. DEPUTY COMMISSIONER OF

INCOME TAX

CIRCLE 6(1)(2)

BMTC COMPLEX, KORAMANGALA

BENGALURU. ... APPELLANTS (BY SRI. T.N.C. SRIDHAR, ADV.,) AND: M/S. SUBRAMANYA CONSTRUCTIONS AND DEVELOPMENT CO. LTD. NO.4/1, TUMKUR ROAD YESHWANTHPUR BENGALURU-560022. ... RESPONDENT (BY SRI. A. SHANKAR, SR. COUNSEL A/W SRI. V. CHANDRASHEKAR, ADV., FOR SRI. M. LAVA, ADV.,) - - - THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 23.03.2018 PASSED

2 IN ITA NO.410/BANG/2017 FOR THE ASSESSMENT YEAR 2010-11, PRAYING TO: (i) 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. (ii) SET ASIDE THE APPELLATE ORDER DATED 23.03.2018 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'A' BENCH, BENGALURU, IN APPEAL PROCEEDINGS NO.ITA NO.410/BANG/2017 FOR THE ASSESSMENT YEAR 2010-11 AS SOUGHT FOR IN THIS APPEAL AND TO GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE. THIS I.T.A. COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2010-11. The appeal was admitted by a bench of this Court vide order dated 31.10.2019 on the following substantial questions of law: "Whether on the facts and circumstances of the case, the Tribunal is justified in law in deleting the disallowances made under section 14A r.w.r.8D(2)(ii) and 8D(2)(iii) of the Act without appreciating the Board's Circular No.5/2014 dated

3 11.02.2014 which emphasizes that the only expenditure allowable is which is relatable to earning of income and therefore the expenses which are relatable to earning of exempt income have to be considered for disallowance, irrespective of the fact, whether any such income has been earned during the financial year or not"? 2. For the reasons assigned by us in the judgment today in I.T.A.No.398/2015 connected with I.T.A.No.399/2015, the substantial questions of law framed by a bench of this court are answered against the revenue and in favour of the assessee. In the result, the appeal is dismissed. Sd/- JUDGE Sd/- JUDGE ss