THE COMMISSIONER OF INCOME TAX vs. KARNATAKA POWER TRANSMISSION CORPORATION LTD

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ITA/267/2011HC KarnatakaKAHC01063348201115 March 2012Bench: RAVI MALIMATH,N.KUMAR3 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal was not right in splitting the composite contract into parts for tax determination. Interest under Section 201(1A) was not leviable as the assessee was not liable for deductions on the material part of the contract.

What were the facts?

The revenue appealed against the Tribunal's decision regarding the splitting of a composite contract. The Tribunal had bifurcated the contract into material and work components for tax determination.

What were the issues?

Whether a composite contract can be split for tax purposes and if interest is leviable under Section 201(1A) when no deduction was liable.

Which sections of the Income-tax Act were involved?

Section 201(1A)

AI-generated summary — verify with the full judgment below

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z psed to formulate the sutazflI quatm of law stated therein 1 This ifA uñr on for HeaHng this days NJWMAt J, deliwS the b&wing This apl I the revenut The suheantal qualom of law tkmt arise for nslderan in this apaI are as under (1)Whether the Wibunal was right in splitting up the contract, wPdcft aaxwdlnq to the rwemse 3 was one ALE) of th€ composite contru4 into pats suth as part of the contract attributable to the value ofthe materials Mvolt’ in the exeon ofthe work and otherp of the contract such as civil works rind taking the view that tax was requfred to be dethned at snare cmkj at respect of the work pest of the contract and not materialpat c?fthe con? f2jltether the lWbunal was ustifled n wndedfrw that Interest under Seen 201(14) of the Income Tax Act, 1%1 I

3 not leukzble, as the assessee was riot liable to make any deductfons in respect of the undue of the snatenal part of the nfld, though the cxmtruct was one of whole amtrad7’ Court bad an ocoaSn to oonsider apab witre the said qutions wee inicived in the case of lt madasdensr aflnecsms and cHars va Zansataka Fmnr IrruamUsion Cmponattms zAsad disrnsed of on even date and has answered the said subtantial quafiem of law in hwxur of the asaaaa and agat the revenua 3. llrrefore 1 following the aforesaid judgrnent this ap1 is aba dhmis Sd/n JUDGE Sd/a JUDGE

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