M/S RAJA HOUSING LTD vs. THE ASSISTANT COMMISSIONER OF

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ITA/401/2013HC KarnatakaKAHC01026491201313 November 2013Bench: N.KUMAR,RATHNAKALA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the assessee was appointed as an agent to carry out work, not an assignment of all rights. Therefore, the concurrent findings of the authorities that the assessee had no direct connection and was not entitled to the deductions were upheld.

What were the facts?

The assessee, Raja Housing Ltd., challenged the tribunal's decision to disallow certain deductions. The assessee relied on a Deed of Assignment to claim deductions for expenses incurred on projects.

What were the issues?

Whether the assessee was entitled to deductions based on a Deed of Assignment where it acted as an agent rather than having a direct contractual relationship with the property owner.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 13TH DAY OF NOVEMBER 2013

PRESENT

HON’BLE MR.JUSTICE N.KUMAR

AND

HON’BLE MRS.JUSTICE RATHNAKALA

I.T.A.NO.401/2013

BETWEEN:

M/S RAJA HOUSING LTD., RAJA MAHALAKSHMI #12, BASAPPA ROAD SHANTHINAGAR BENGALURU 560 027 REP. BY ITS DIRECTOR SRI RAJA DATTA S/O RAJA JAYASHANKAR ABED ABOUT 44 YEARS ...APPELLANT (BY SMT.VANI H, ADV.)

AND:

THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-12(4) BANGALORE ... RESPONDENT

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 05/04/2013 PASSED IN ITA NO.1016/BANG/2011, FOR THE ASSESSMENT YEAR 2005- 06 PRAYING THIS HON'BLE COURT TO:

I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN,

2 II. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BANGALORE IN ITA NO.1016/BANG/2011 DATED 05/04/2013.

THIS APPEAL COMING ON FOR ADMISSION THIS DAY, N.KUMAR J. DELIVERED THE FOLLOWING:

J U D G M E N T

This appeal is by the assessee challenging the order of the tribunal which has declined to allow certain deductions as expenditure.

2.

The learned counsel appearing for the appellant contended that the authorities have ignored the Deed of Assignment and committed serious error in not extending the benefit of deductions incurred by the assessee in the projects in respect of which the Assignment Deed was executed and therefore she submits that it is a case for interference with the impugned orders.

3.

The authorities have proceeded on the footing that the assessee has not directly entered into a Joint Development Agreement with K.C.Shivashankar. It is

3 the assessee’s sister concern M/s.Raja Builders and Investments, which has entered into a Joint Development Agreement with K.C.Shivashankar on 31.4.1994. Therefore, the assessee has no direct connection with he said owner. The Deed on which reliance is placed is also produced before this Court.

4.

A reading of the document clearly establishes that under the said Deed, the assessee was appointed as an agent to carryout the work for which his sister concern had entered into agreement with the owner. It is not a case of assignment of all rights in the agreement in favour of the assessee. Therefore, the concurrent findings recorded by the authorities below that there is no direct connection cannot be found fault with. Now, the deductions claimed are in pursuance of the said contract. The authorities on careful consideration of the entire material on record have recorded a categorical finding that the assessee is not entitled to any benefit.

4 5. We do not see any infirmity in the said concurrent findings recorded by the authorities below. No substantial question of law to arise for consideration. Hence, the appeal stands dismissed.

Sd/-

JUDGE

Sd/- JUDGE

nas.

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