Commissioiner of Income Tax-III vs. Shri Ravi Teja Restaurant AND Resorts Private Limited

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF OCTOBER 2020 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD I.T.A. NO.356 OF 2013 BETWEEN: 1. THE COMMISSIONER OF INCOME-TAX

LTU, JSS TOWERS

BSK III STAGE, BANGALORE. 2. THE ADDL. COMMISSIONER OF INCOME-TAX

LTU, JSS TOWERS

100 FEET RING ROAD

BSK III STAGE, BANGALORE-560085.

... APPELLANTS (BY SRI. K.V. ARAVIND, ADV.,) AND: M/S. STATE BANK OF MYSORE HEAD OFFICE, P.B. NO.9727 K.G. ROAD, BANGALORE-560254. ... RESPONDENT (BY SRI. ANKUR PAI, FOR SRI. K.R. VASUDEVAN, ADV.) - - - THIS ITA IS FILED UNDER SECTION 260-A OF I.T. ACT, 1961 ARISING OUT OF ORDER DATED 28.02.2013 PASSED IN ITA NO.1243/BANG/2011, FOR THE ASSESSMENT YEAR 2004-05 PRAYING TO: (I) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN.

2 (II) ALLOW THE APPEAL AND SET ASIDE THE ORDER OF THE ITAT, BANGALORE IN ITA NO.1243/BANG/2011 DATED 28.02.2013 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX, (LTU), BANGALORE. THIS ITA COMING ON FOR FINAL HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT Mr.K.V.Aravind, learned counsel for the revenue. Mr.Ankur Pai, learned counsel for the assessee. 2. This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment Year 2004-05. The appeal was admitted by a Bench of this Court vide order dated 13.08.2013 on the following substantial questions of law: i. Whether the Appellate Authorities were correct in holding that the assessee has claimed the provision created under Section 36(1)(viia) of the Act and the bad debt written off is adjusted to the provision and no bad debt is written off under Section 36(1)(vii) of the Act

3 and hence provisions of Section 41(1)/41(4) of the Act are not attracted on a subsequent recovery of the written off debt, when the provision created under Section 36(1)(viia) of the Act is allowed as a deduction and recorded a perverse finding? ii. Whether the Appellate Authorities were correct in holding that the employees contribution deducted by the assessee has been credited under the respective statue before filing return of income and hence allowable deduction without taking into consideration, the provisions of Section 2(24)(x) read with Section 36(va) of the Act? 3. When the matter was taken up today, learned counsel for the assessee submitted that the revenue had filed a miscellaneous petition before the Income Tax Appellate Tribunal which has been allowed by the Tribunal vide order dated 05.03.2016 and the matter has been remitted to the Assessing Officer. The aforesaid submission could not be disputed by the learned counsel for the revenue.

4 4. In view of the order dated 05.03.2016 passed by the Income Tax Appellate Tribunal, the 1st substantial question of law involved in this appeal has been rendered academic. However, all contentions with regard to the 1st substantial question of law are kept open for the time being. 5. Learned counsel for the assessee further submitted that the 2nd substantial question of law has been answered against the revenue by a Bench of this Court in ‘COMMISSIONER OF INCOME-TAX Vs. SABARI ENTERPRISES’ (2008) 298 ITR 141 (KAR). The aforesaid legal position could not be disputed by the learned counsel for the revenue. 6. For the reasons assigned by a Bench of this Court in SABARI ENTERPRISES, supra, the 2nd substantial question of law is answered against the revenue.

5 In the result, we do not find any merit in this appeal. The same fails and is hereby dismissed. Sd/- JUDGE Sd/- JUDGE RV