THE COMMISSIONER OF INCOME TAX vs M/S HOTEL CHALUKYA

- 1 - IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 28TH DAY OF OCTOBER 2013

PRESENT

THE HON’BLE MR.JUSTICE N.KUMAR

AND

THE HON’BLE MRS.JUSTICE RATHNAKALA

INCOME TAX APPEAL NO.46 OF 2007 c/w INCOME TAX APPEAL NO.44 OF 2007

BETWEEN:

The Commissioner of Income-Tax, Central Circle, C.R Building Queens road, Bangalore

The Deputy Commissioner of Income-Tax, Central Circle – II, C.R Building, Queens Road, Bangalore .

..APPELLANTS

(common in both appeals)

(By Sri K.V. Aravind, Adv.)

AND:

M/s. Hotel Chalukya, No.44, Race Course Road, Bangalore.

..RESPONDENT

(common in both appeals)

(By Sri A. Shankar & Sri M. Lava, ADV.)

I.T.A.No.46/2007 is filed under Section 260-A of I.T. Act, 1961, arising out of Order dated 28-06-2006 passed in ITA No.

- 2 - 102/Bang/2003, for the Block Assessment Period 1988-89, to 1999-2000, praying that this Hon'ble Court may be pleased to:

i. formulate the substantial questions of law stated therein,

ii. allow the appeal and set aside the order passed by the ITAT, Bangalore in ITA No.102/Bang/2003 dated 28-06- 2006 confirming the order passed by the Appellate Commissioner & confirm the order passed by the Deputy Commissioner of Income Tax, Central Circle-II, Bangalore, in the interest of justice and equity.

I.T.A.No.44/2007 is filed under Section 260-A of I.T. Act, 1961, arising out of Order dated 28-06-2006 passed in IT(SS)A 82/Bang/2003, for the Block Assessment Period 1989-90, to 1999-2000, praying that this Hon'ble Court may be pleased to:

iii. formulate the substantial questions of law stated therein,

iv. allow the appeal and set aside the order passed by the ITAT Bangalore in IT(SS)A 82/Bang/2003 dated 28-06- 2006 & confirm the order passed by the Appellate Commissioner confirming the order passed by the Dy. Commissioner of Income Tax, Central Circle-II, Bangalore, in the interest of justice and equity.

These Appeals coming on for Admission this day, KUMAR J., delivered the following:

J U D G M E N T

These two appeals are preferred by the Revenue, challenging the order passed by the Tribunal allowing the appeal of the assessee and allowing the deductions claimed by him.

- 3 - 2. The subject matter of the appeal is Rs.11,02,580/-. In other words, the challenge is to the deletion of the said addition. The tax effect is Rs.6,61,548/-.

In view of the judgment of this Court in the case of Commissioner of Income Tax & Another –vs- Ranka and Ranka reported in 2012(72) DTR (Kar) 270, wherein it was held that notwithstanding Clause 11 of CBDT Instruction No.3 of 2011 dated 9th February 2011, expressly providing that the instructions will apply to appeals filed on or after 9th February 2011 and appeals filed earlier will be governed by contemporaneous instructions, the application of said instructions needs to be extended to appeals pending as on 9th February 2011. In other words, the said instruction was held to be retrospective. In view of the said instructions, the appeal preferred by the Revenue where the tax effect is less than Rs.10 lakhs is not maintainable.

Accordingly, without going into the merits of the appeals, they are dismissed on the ground of tax effect being less than Rs.10 lakhs.

- 4 -

The said judgment of this Court in the case of Ranka & Ranka referred to supra, is said to be now pending before the Apex Court. In the event of the Apex Court reversing the judgment of this Court, liberty is reserved to the Revenue to seek for revival of these appeals. Ordered accordingly.

Sd/-

JUDGE

Sd/-

JUDGE

KNM/-

THE COMMISSIONER OF INCOME TAX vs. M/S HOTEL CHALUKYA