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ITA No.726/2015 C/W ITA Nos.725/2015 & 724/2015
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF SEPTEMBER 2017
PRESENT
THE HON’BLE MR. JUSTICE H.G.RAMESH
AND
THE HON’BLE MRS. JUSTICE K.S.MUDAGAL
INCOME TAX APPEAL No.726/2015 C/w INCOME TAX APPEAL Nos.725/2015 & 724/2015
IN ITA No.726/2015:
BETWEEN :
M/S S.K.PROPERTIES NO.103, ‘ALFA CARLESTON’ WHEELER ROAD COOKE TOWN BENGALURU – 560 005 REPRESENTED BY ITS PARTNER MR. A.R.SARDAR KHAN
...APPELLANT
(BY SRI M.V.SESHACHALA, SENIOR COUNSEL FOR SRI ARAVIND V. CHAVAN, ADVOCATE)
AND :
THE INCOME TAX OFFICER
WARD-1(2), HMT BHAVAN
BELLARY ROAD, BENGALURU – 560 031
THE COMMISSIONER OF INCOME-TAX-1
CENTRAL CIRCLE, C.R.BUILDINGS
QUEENS ROAD
BENGALURU – 560 001
...RESPONDENTS
(BY SRI JEEVAN J.NEERALGI, ADVOCATE)
ITA No.726/2015 C/W ITA Nos.725/2015 & 724/2015
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IN ITA No.725/2015:
BETWEEN :
M/S S.K.PROPERTIES NO.103, ‘ALFA CARLESTON’ WHEELER ROAD COOKE TOWN BENGALURU – 560 005 REPRESENTED BY ITS PARTNER SRI A.R.SARDAR KHAN
...APPELLANT
(BY SRI M.V.SESHACHALA, SENIOR COUNSEL FOR SRI ARAVIND V. CHAVAN, ADVOCATE)
AND :
THE INCOME TAX OFFICER
WARD-1(2), HMT BHAVAN
BELLARY ROAD, BENGALURU – 560 031
THE COMMISSIONER OF INCOME-TAX-1
CENTRAL CIRCLE, C.R.BUILDINGS
QUEENS ROAD
BENGALURU – 560 001
...RESPONDENTS
(BY SRI E.I.SANMATHI, ADVOCATE)
IN ITA No.724/2015:
BETWEEN :
M/S S.K.PROPERTIES NO.103, ‘ALFA CARLESTON’ WHEELER ROAD COOKE TOWN BENGALURU – 560 005 REPRESENTED BY ITS PARTNER MR. A.R.SARDAR KHAN
...APPELLANT
(BY SRI M.V.SESHACHALA, SENIOR COUNSEL FOR SRI ARAVIND V. CHAVAN, ADVOCATE)
ITA No.726/2015 C/W ITA Nos.725/2015 & 724/2015
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AND :
THE INCOME TAX OFFICER
WARD-1(2), HMT BHAVAN
BELLARY ROAD, BENGALURU – 560 031
THE COMMISSIONER OF INCOME-TAX-1
CENTRAL CIRCLE, C.R.BUILDINGS
QUEENS ROAD, BENGALURU – 560 001 ...RESPONDENTS
(BY SRI JEEVAN J.NEERALGI, ADVOCATE)
THESE INCOME TAX APPEALS ARE FILED UNDER SECTION 260-A OF I.T.ACT, 1961 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW AND TO SET ASIDE THE COMMON ORDER DATED 23.01.2015 PASSED IN ITA No.670/BANG/2009, ITA No.855/BANG/2011, ITA No.669/BANG/2009 BY THE ITAT, BANGALORE BENCH ‘B’ BANGALORE, ETC.
THESE INCOME TAX APPEALS COMING ON FOR ADMISSION, THIS DAY, H.G.RAMESH J., DELIVERED THE FOLLOWING: JUDGMENT
H.G.RAMESH, J. (Oral):
These three appeals are directed against the common order dated 23.01.2015 passed by the Income Tax Appellate Tribunal, Bangalore Bench ‘B’, Bangalore, in ITA.Nos.670/Bang/2009, 855/Bang/2011 and 669/Bang/2009.
Sri M.V.Seshachala, learned Senior Counsel appearing for the appellant submitted that the Tribunal has erred in law in observing that the method of accountancy adopted by the Assessing Officer for the assessment year 2007-08
ITA No.726/2015 C/W ITA Nos.725/2015 & 724/2015
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for recognition of the revenue has not been challenged by the assessee. The learned Senior Counsel submitted that the observation made by the Tribunal is factually erroneous as the order relating to the Assessment Year 2007-08 was challenged before the Income Tax Appellate Tribunal in ITA.No.783/Bang/2015 and the order was set aside by the Appellate Tribunal with the following observations: “7. …………………. Therefore in our considered opinion, the matter requires a fresh examination by the Assessing Officer in the light of the above position of law. Therefore, we remand this matter back to the file of the Assessing Officer with a direction that the income in respect of sale of plots can be recognized only in the year in which conveyance deed executed is registered in favour of the buyers and to allow the development expenditure incurred as expenditure or the expenditure likely to be incurred on the plots sold as expenditure. And this direction also goes in line in consonance with the provisions of accounting standard 9 which clearly lays down that matching is required to be done on accrual basis in respect of the income offered to tax and upheld by Hon’ble Supreme Court in the case of CIT Vs. Taparia Tools Ltd.”
In view of the above, the learned Senior Counsel submitted that the impugned order is not correct and the matter requires to be reconsidered by the Assessing Officer.
Sri Jeevan J. Neeralgi, learned Counsel appearing for the respondents fairly submitted that the Tribunal has committed a factual error in making the aforesaid observation referred to at para 2 above. Accordingly, he submitted that the impugned order may be set aside and
ITA No.726/2015 C/W ITA Nos.725/2015 & 724/2015
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the matter may be remitted to the Assessing Officer for reconsideration in terms of the order made by the Appellate Tribunal in ITA No.783/Bang/2015. Hence, we make the following order: (i) The common order dated 23.01.2015 passed by the Income Tax Appellate Tribunal, Bangalore Bench ‘B’, Bangalore in ITA.Nos.670/Bang/2009, 855/Bang/2011 and 669/Bang/2009 which is impugned in these appeals is set aside;
(ii) The matter is remitted to the Assessing Officer for reconsideration in terms of the order made by the Appellate Tribunal in ITA No.783/Bang/2015. All contentions of both the parties are kept open. Appeals disposed of.
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JUDGE
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JUDGE