THE COMMISSIONER OF INCOME TAX vs. M/S. FALCON TYRES LTD

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ITA/120/2015HC KarnatakaKAHC01017523201505 January 2016Bench: S.SUJATHA,N.K.PATIL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal as not maintainable. This was based on the Revenue's submission that the subject matter involved in the case was less than Rs. 20 Lakhs, following a CBDT circular.

What were the facts?

The Revenue appealed against an ITAT order that confirmed the deletion of disallowance made under Section 14A read with Rule 8D. The Revenue argued that expenditure disallowance is permissible even without receipt of exempt income, citing a CBDT circular.

What were the issues?

Whether Section 14A can be invoked for disallowance of expenditure even if no exempt income is earned in a particular year. The maintainability of the appeal itself was also a consideration.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 5TH DAY OF JANUARY, 2016

:PRESENT: THE HON’BLE MR.JUSTICE N.K. PATIL

AND

THE HON’BLE MRS.JUSTICE S. SUJATHA

I.T.A.NO.120 OF 2015 Between:

1.

The Commissioner of Income-tax, LTU, JSS Towers, BSK III Stage, Bangalore-560 085.

2.

The Deputy Commissioner of Income-Tax, LTU, JSS Towers, BSK III Stage, Bangalore-560 085. …Appellants (By Sri. K.V. Aravind, Advocate)

And :

M/s. Falcon Tyres Ltd., K.R.S. Road, Metagalli, Mysore-570 016.

…Respondent (Respondent served and unrepresented) *** This ITA is filed U/s. 260A of the Income Tax Act, 1961, praying to formulate the substantial question of law, allow the appeal and set aside the orders passed by the Income Tax Appellate Tribunal, Bangalore, in ITA No. 1811/Bang/2013 dated 31/10/2014 confirming the order of the Appellate Commissioner and confirm the order passed

by the Commissioner of Income Tax(Appeals), LTU, Bangalore.

This ITA coming on for Admission, this day, N.K.PATIL J., delivered the following: :J U D G M E N T:

This appeal by the Revenue is arising out of the impugned order dated 31/10/2014, passed in ITA No. 1811/Bang/2013, by the Income Tax Appellate Tribunal, Bangalore Bench-B, Bangalore, for considering the following substantial questions of law: (i) Whether the Tribunal was correct in holding that unless and until there is receipt of exempted income for the concerned assessment years, section 14A of the Act cannot be invoked without appreciating that the CBDT has issued a circular No.5/2014 dated 11.02.2014 and directed for disallowance of expenditure u/s.14A r.w. rule 8D, even where tax payer in a particular year has not earned any exempt income?

(ii) Whether the tribunal is correct in deleting the disallowance made under Rule 8D(2)(ii) of the Act, when there is no necessity for earning exempt income for invoking section 14A of the Act.

2.

We have heard the learned counsel Sri. K.V.Aravind, appearing for appellants.

3.

During the course of submission, learned counsel appearing for appellants submitted, that in the light of the Circular dated 10th December 2015 bearing No.21/2015 since the subject matter involved in this case is less than Rs.20/- Lakhs, the instant appeal may be disposed of as not maintainable. 4. The above submission made by learned counsel for the appellants is placed on record. 5. In view of the submission made by learned counsel appearing for appellants and in the light of the Circular dated 10th December 2015 bearing No.21/2015, instant appeal filed by the appellants is dismissed as not maintainable. Ordered accordingly.

SD/- JUDGE

SD/-

JUDGE tsn*

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