THE COMMISSIONER OF INCOME TAX vs. M/S ENCORRE SOFTWARE LTD.,

PDF · subscribers
ITA/428/2009HC KarnatakaKAHC01054007200920 February 2013Bench: D.V.SHYLENDRA KUMAR,B.SREENIVASE GOWDA5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court set aside the ITAT's order and remitted the matter back to the Assessing Officer for fresh assessment. This was done to allow the assessee to present all contentions properly, as the dispute was not examined in the manner projected later.

What were the facts?

The Revenue appealed against the ITAT's decision allowing the assessee's claim for a deduction of Rs. 28,32,607/- as revenue expenditure for semi-finished products. The assessee followed the mercantile system of accounting and quantified the amount on an estimate basis.

What were the issues?

Whether an estimated amount for semi-finished products, claimed as revenue expenditure, is allowable as a deduction when the assessee follows the mercantile system and the amount had not accrued.

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 20th DAY OF FEBRUARY, 2013 P R E S E N T THE HON’BLE MR.JUSTICE D V SHYLENDRA KUMAR AND THE HON’BLE MR.JUSTICE B SREENIVASE GOWDA ITA No.428 of 2009

BETWEEN:

1.

THE COMMISSIONER OF INCOME-TAX,

C.R. BUILDING,

QUEENS ROAD,

BANGALORE.

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX,

CIRCLE-11 (3),

C.R. BUILDING,

QUEENS ROAD,

BANGALORE.

…APPELLANTS

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

AND:

M/S. ENCORRE SOFTWARE LIMITED., NO.45, 6TH FLOOR, LEO COMPLEX, RESIDENCY CROSS ROAD, BANGALORE. ... RESPONDENT

2 (BY SRI. A.SHANKAR & SRI. M.LAVA, ADVS.,)

THIS APPEAL IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED 17- 04-2009 PASSED IN ITA NO.1462/BANG/2008, FOR THE ASSESSEMTN YEAR 2005-06, PRAYING TO SET ASIDE THE SAID ORDER OF THE TRIBUNAL AND ETC.,

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

J U D G M E N T

This appeal is by the Revenue under Section 260A of the Income Tax Act, 1961 directed against the order dated 17.04.2009 passed in I.T.A. No. 1462/2008 by the Income Tax Appellate Tribunal Bangalore ‘A’ Bench, Bangalore for the assessment year 2005-06.

2.

The Revenue has raised the following substantial question of law for examination in this appeal: Whether the Appellate Authorities were correct in holding that the amount of Rs.,28,32,607/- claimed by the assessee as a revenue expenditure towards semi finished products is an allowable deduction even though this amount was quantified on estimate basis and not actual as the assessee was following mercantile system of accounting and the same had not accrued?

3 3. Notice had been issued to the Assessee and the Assessee is represented through learned Counsel Sri A. Shankar.

4.

Sri K.V. Aravind, learned Counsel appearing for the appellant Revenue submits that the Tribunal without deciding the appeal before it had followed the view taken by the Tribunal in respect of the very Assessee relating to assessment year 2001-02 on the very question and therefore had allowed the appeal of the Assessee and dismissed the appeal filed by the Revenue.

5.

It is pointed out that the order of the Tribunal relating to assessment year 2001-02 and in respect of the very Assessee and in respect of the very issue involving the very question was subject matter of the appeal before this Court questioned by the Revenue in I.T.A. No. 1143/2006 and this Court in terms of order dated 8th October, 2012 set aside the order of the Tribunal and the authorities below and the

4 matter was remitted to the Assessing Officer to enable the Assessee to putforth all his contentions in a proper manner as the dispute was not examined by the Assessing Officer, in the manner as was projected later by the Assessee who had not raised such contentions before the Assessing Officer.

6.

Following the same, this matter also has to be remitted to the Assessing Officer by setting aside the order of the Tribunal and Assessing Officer.

7.

Sri A. Shankar, learned Counsel for the Assessee submits he has no objection for remand.

8.

In the circumstances, the appeal is allowed. The impugned

order dated 17-04-2009 passed in ITA No.1462/Bang/2008, for the assessment year 2005-06 is set aside and the matter is remitted to the Assessing Officer for fresh assessment after giving proper opportunity to the Assessee. In view of the remand, question of law is not

5 answered. All contentions are kept open for both sides to establish their case. The Assessing Authority to issue fresh notice to the Assessee.

Sd/- JUDGE

Sd/- JUDGE

Vb*

More judgments on Section 260-A

All 2,570 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →