PR COMMISSIONER OF INCOME TAX -4 vs. M/S KARNATAKA POWER CORPORATION LIMITED

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ITA/863/2018HC KarnatakaKAHC01055489201817 March 2020Bench: ALOK ARADHE,M.NAGAPRASANNA5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court found that the substantial questions of law did not arise for consideration. The court noted that a previous judgment had already addressed the issue of Section 115JB, and the Tribunal had followed its prior order regarding Section 80IA, which was against the Revenue.

What were the facts?

The Revenue appealed against an ITAT order that set aside additions made regarding provision for leave encashment and computation of MAT under Section 115JB. The assessee is a power generation company.

What were the issues?

Applicability of Section 115JB to power generation companies and adjudication of issues related to leave encashment, pension, and 80IA deductions.

Which sections of the Income-tax Act were involved?

Section 115JB,Section 80IA

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 17TH DAY OF MARCH, 2020

PRESENT

THE HON'BLE MR. JUSTICE ALOK ARADHE

AND

THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

INCOME TAX APPEAL NO.863 OF 2018

BETWEEN:

1.

THE PR.COMMISSIONER OF INCOME TAX - 4, B.M.T.C. COMPLEX,

KORAMANGALA, BENGALURU.

2.

THE DEPUTY COMMISSIONER OF INCOME – TAX, CIRCLE – 11(5), BENGALURU. ... APPELLANTS (BY SRI E. I. SANMATHI, ADV.)

AND:

M/S. KARNATAKA POWER CORPORATION LIMITED, SHAKTHI BHAVAN, NO.82, RACE COURSE ROAD, BENGALURU – 560 001. PAN: AAACK8032D

... RESPONDENT (BY SRI A. SHANKAR, SR. ADV. ALONG WITH SRI LAVA M., ADV.)

2 THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED: 31.07.2018 PASSED IN ITA NO.509/BANG/2014 FOR THE ASSESSMENT YEAR 2009- 2010 PRAYING TO:

i. DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATTED BY THE COURT AS DEEMED FIT.

ii. SET ASIDE THE APPELLATTE ORDER DATED:31.07.2018 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH, BENGALURU, AS SOUGH FOR, IN HE RESPONDENT – ASSESSEE’S CASE, IN APPEAL PROCEEDINGS IN ITA NO.509/BANG/2014 FO A.Y.2009-10 (ANNEXURE – A)

iii. GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.

THIS INCOME TAX APPEAL COMING ON FOR ADMISSION, THIS DAY, ALOK ARADHE J., MADE THE FOLLOWING: JUDGMENT

This appeal is filed under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), by the Revenue, being aggrieved by the order dated 31.07.2018 passed by the Income Tax Appellate Tribunal, Bengaluru, in ITA.No.509/Bang/2014.

3 2. The following substantial questions of law are proposed for consideration in this appeal: “1. Whether on the facts and circumstances of the case, the Tribunal is right in law in setting aside the addition made by assessing authority in respect of provision for leave encashment of Rs.28,99,05,975/- and provision of Rs.75,53,84,608/- for computation of 115JB by following its earlier order dated 11/10/2013 passed in ITA No.711/Bang/2011 by holding that provisions of section 115JB of the Act are not applicable to facts of present case as assessee is engaged in the business of generation of power even when the same is applicable to facts of present case and provisions of the Act?

2.

Whether on the facts and circumstances of the case, the Tribunal’s order can be said as perverse in nature in not adjudicating the issue of provision for leave encashment, pension which are unascertained liabilities and deserves to

4 be disallowed which computing income under section 115JB of the Act?

3.

Whether on the facts and circumstances of the case, the Tribunal’s order can be said as perverse in nature in not adjudicating issue pertaining to 80IA deduction even though same is pleaded by Revenue?”

3.

When the matter is taken up today, learned counsel for the parties submitted that the proposed substantial question of law No.2 is answered by a Division Bench of this Court vide judgment dated 16.01.2020 in I.T.A.No.18/2014. Therefore, in view of the unequivocal submission, Section 115JB of the Act, to the facts situation of the case, the substantial question of law No.1 does not arise.

4.

It is further submitted that the issue pertaining to Section 80IA of the Act, the Tribunal has followed the order passed in the previous assessment year 2007-08 and

5 the same is answered against the Revenue. Therefore, in view of the preceding analysis, no substantial questions of law arise for consideration in this appeal. Accordingly, the appeal is dismissed.

Sd/- JUDGE

Sd/- JUDGE

nvj

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