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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 31ST DAY OF AUGUST 2016
PRESENT
THE HON’BLE MR.JUSTICE JAYANT PATEL AND THE HON’BLE MR.JUSTICE S.N.SATYANARAYANA INCOME TAX APPEAL No.147/2011
BETWEEN:
COMMISSIONER OF INCOME TAX (CENTRAL) CENTRAL REVENUE BUILDINGS QUEENS ROAD, BANGALORE – 560001.
THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(3) C R BUILDINGS, BANGALORE.
…APPELLANTS
(BY SRI E.I.SANMATHI, ADVOCATE)
AND:
M/S. BAGMANE DEVELOPERS PVT.LTD LAKE VIEW BUILDING, NO.66/1-4, A BLOCK, 8TH FLOOR BAGMANE TECH PARK C.V.RAMAN NAGAR BANGALORE.
...RESPONDENT
(BY SRI CHYTHANYA K.K., ADVOCATE)
THIS APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED 03/12/2010 PASSED IN ITA NO.183/BANG/2010, FOR THE ASSESSMENT YEAR 2003-04 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW
2 STATED THEREIN, SET ASIDE THE COMMON APPELLATE ORDER DATED 03/12/2010 IN ITA NO.183/BANG/2010 PASSED BY THE ITAT, ‘B’ BENCH, BANGALORE AS SOUGHT FOR IN THIS APPEAL.
THIS APPEAL COMING ON FOR HEARING THIS DAY, JAYANT PATEL J., DELIVERED THE FOLLOWING:
JUDGMENT
The Revenue has preferred the present appeal by raising the following substantial questions of law: “(A) Whether under the facts and circumstances of the case, the tribunal was right in law in holding that below authorities were not justified in holding that surplus arising on sale of land as “Business Income” for assessment years in question even when the assessee’s regular assessments had reached finality and moreover, no revised returns were filed by assessee to change it’s claim?
(B) Whether undoer the facts and circumstances of the case, the tribunal was right in law in holding that below authorities were not justified in holding that surplus arising on sale of land as “Business Income” for assessment years in question even when there is no provision in the I.T.Act under which the assessee had an opportunity to make a claim which was not made by it in the course of regular assessment proceedings?
(C) Whether under the facts and circumstances of the case, the tribunal was right in law in allowing assessee’s claim as regards the sale of land to be treated as capital gains instead of business income even when the assessee had earlier claimed
3 the sale of land as part of business income and claimed deduction under section 80IA(4) of the I.T.Act, while furnishing the returns of income under section 139(1) of the I.T.Act and
(D) Whether under the facts and circumstances of the case, the tribunal was right in law in allowing assessee’s claim as regards sale of land to be treated as capital gains instead of business income even when there was no provision in I.T.Act to take different stand in the returns in response to notice issued under section 153A of I.T.Act and moreover in respect of an assessment initiated under section 153A of the I.T.Act, any fresh claims tht an assessee would wish to make could only be limited to matters arising out of the undisclosed income and not on such issues which have become final in regular assessments?
(E) Whether under the facts and circumstances of the case, the tribunal was right in law in allowing assessee’s claim as regards sale of land to be treated as capital gains instead of business income even when assessee cannot be permitted to convert the reassessment or the search assessment proceedings as his appeal or revision in disguise and seek relief in respect of items which had become final in the original assessment proceedings unless it relates to an undisclosed income?
(F) Whether under the facts and circumstances of the case, the tribunal’s order is perverse in it’s nature as regards the aforesaid issue is concerned since tribunal erred in holding that assessee erred in disposing the land earmarked for promoting the Software Park in the F.Y. statement as
4 stock-in-trade and this being a genuine mistake in the financial statement, that cannot be seriously viewed while interpreting the provisions of the Act even when the assessee had never taken such a plea before it?
(G) Whether under the facts and circumstances of the case, the tribunal was right in law in allowing assessee’s appeal as regards loans advanced to the sister concerns by holding that the said loans were given for commercial expediency even when no document or any evidence relating to any such agreement was found during the course of the search and assessee also failed to substantiate such claim?
When we have taken up the matter for final hearing, the learned counsel appearing for the Revenue Sri Aravind states that question No.(A) to (F) would not arise for consideration in the present appeal since the transaction of the sale of land has not taken place in the subject assessment year of 2003-04 and he submits that he would not press those questions and he also submitted that the only question no.(G) may arise for consideration but the said question is already covered by the decision of this Court in case of Commissioner of Income Tax vs. M/s.Bagmane Developers (Pvt) Ltd., in ITA No.175/2014 decided on 14.10.2014.
5 3. Learned counsel appearing for the assessee also confirms the said position that the question is covered by the above referred decision of this Court dated 14.10.2014.
We may record that this Court in the above referred order dated 14.10.2014 observed thus: “2. The revenue has preferred this appeal against the order passed by the tribunal. The substantial question of law that is raised in this appeal is as under:
“Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the Commissioner of Income Tax (A) was justified in deleting the additions of Rs.51,87,552/- and Rs.16,56,73,063/- for A.Y.2007-08 and 2008-09 respectively on the ground that the advances made to its related parties were for the purposes of purchase and conversion of agricultural lands without appreciating that no agricultural lands were purchased by the related parties on behalf of the assesses company and as such there was no evidence that these advances were for the business purposes?”
In fact, in the case of M/s Bagmane Constructions Pvt. Ltd. – the sister concern of the assessee, in a batch of appeals in ITA No.473/13 and connected matters disposed off on 16.09.2014, this Court has held that the money
6 given by M/s Bagmane Developers Pvt. Ltd to its sister concern for acquisition of land is for business purpose and has upheld the order of the tribunal.
In that view of the matter, this claim relating to interest on that advance is also not taxable and is an allowable expenditure. This is what the tribunal has held. Therefore, we do not see any merit in this appeal. No substantial question of law do arise for consideration in this appeal. Accordingly, appeal is dismissed.”
Under the circumstances, as the question is already covered by the above referred decision in view of the reasons recorded by this Court in the above referred order, no substantial questions of law would remain for consideration. Hence, the appeal shall stand dismissed. Disposed off accordingly.
Sd/- JUDGE
Sd/- JUDGE Sk/-