THE COMMISSIONER OF INCOME TAX vs M/S.K.RAHEJA DEVELOPMENT CORPORATION,

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF JANUARY, 2015 PRESENT THE HON' BLE MR. JUSTICE N. KUMAR AND THE HON' BLE MR. JUSTICE B. VEERAPPA INCOME TAX APPEAL No. 256/2009 BETWEEN:

THE COMMISSIONER OF INCOME-TAX

CENTRAL CIRCLE C.R. BUILDING

QUEENS ROAD

BANGALORE

THE DY. COMMISSIONER OF INCOME-TAX

CENTRAL CIRCLE-1(4) C.R. BUILDING QUEENS ROAD BANGALORE

... APPELLANTS (BY SRI K V ARAVIND, ADV.)

AND:

M/S. K. RAHEJA DEVELOPMENT CORPORATION No.26/27, 13TH FLOOR, RAHEJA TOWERS M.G. ROAD, BANGALORE-560 001.

... RESPONDENT

2 THIS ITA IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED 19.12.2008 PASSED IN ITA NO. 538/BANG/2008, FOR THE ASSESSMENT YEAR 2004- 05 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND TO ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT BANGALORE IN ITA No.538/BANG/2008, DATED 19-12-2008 AND CONFIRM THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 1(4), BANGALORE, IN THE INTEREST OF JUSTICE AND EQUITY.

THIS ITA COMING ON FOR HEARING THIS DAY, N. KUMAR, J., DELIVERED THE FOLLOWING:

JUDGMENT

The revenue has preferred this appeal9 against the order passed by the Tribunal granting relief to the assessee following the earlier judgment rendered in the case of the assessee itself.

The substantial questions of law which arise in this appeal are as under: 1. Whether the Tribunal was correct in holding that due to an award passed in

3 Arbitration Proceedings between M/s. K. Raheja Development Corporation and M/s. Unique Estates Development Corporation and M/c. Sea-Crust Properties Pvt. Ltd. where the Assessee was not a party, interest was paid due to compelling reasons and therefore allowable deduction?

Whether the Tribunal was correct in admitting additional evidence regarding the dispute about an Arbitration proceedings where the Assessee was not a party in contravention of the principles of Natural Justice and Tribunal Rules?

Whether the Tribunal was correct in not examining the actual nature of dispute and the manner in which the Assessee was connected to the same before proceeding to grant relief in favour of the Assessee?

This Court had an occasion to consider the said substantial questions of law in the assessee’s case itself in ITA No.661/2007 decided on 18.08.2014. Following the said judgments, the impugned order also require to be set aside and the substantial questions of law are to be answered in favour of the revenue and against the assessee. Accordingly, we pass the following: ORDER

The appeal is allowed. Parties to bear their own costs.

Sd/-

JUDGE

Sd/-

JUDGE Sbs*

THE COMMISSIONER OF INCOME TAX vs. M/S.K.RAHEJA DEVELOPMENT CORPORATION,