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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF AUGUST, 2015
PRESENT THE HON’BLE MR. JUSTICE VINEET SARAN
AND
THE HON’BLE MR. JUSTICE B MANOHAR
ITA No.417/2009
BETWEEN:
THE COMMISSIONER OF INCOME-TAX
C R BUILDING, ATTAVARA
MANGALORE
THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE -1(1) C R BUILDING, ATTAVARA MANGALORE.
.. APPELLANTS
(BY SRI K V ARAVIND & SRI G KAMALADHAR, ADVs.)
AND:
M/S MANDOVI MOTORS PVT. LTD., 14-2-122, BALMATTA ROAD MANGALORE.
.. RESPONDENT
(BY SRI S PARTHASARATHI & SRI V K GURUNATHAN, ADVs.)
THIS ITA IS FILED UNDER SECTION 260A OF INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED 25.03.2009 PASSED IN ITA NO.992/BANG/2007 FOR THE ASSESSMENT YEAR 2002-2003 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE AND TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE ITAT, BANGALORE IN ITA NO.992/BANG/2007 DATED 25.03.2009 AND CONFIRM THE ORDER PASSED BY THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1(1), MANGALORE.
THIS ITA COMING ON FOR HEARING THIS DAY, VINEET SARAN,, J., DELIVERED THE FOLLOWING:
J U D G M E N T
Heard Sri K V Aravind, learned counsel for the appellants as well as Sri Gurunathan, learned counsel holding the brief of Sri S Parthasarathy, learned counsel for the respondent-assessee and perused the records.
The appeal has been admitted on the following questions of law: “i) Whether the Tribunal was correct in holding that the reassessments is bad in law as no addition was made in respect of the disallowance of depreciation on which assessments were reopened when the reopening assessments has taken place in respect of disallowance of rent paid to related at a higher rate contrary to Section 40A(2)(b) of the Act?
ii) Whether the Tribunal was correct in ignoring the rate of Rs.4 per sq.feet fixed for the assessment year 1998-99 by the Hon’ble High Court of Karnataka in ITA No.2607/2005 and accepting the rent claimed by the assessee?”
Learned counsel for the parties do not dispute the fact that the first question of law is covered by the decision of this Court rendered on 1.7.2015 in ITA No.504/2013 (Sri N Govindaraju – vs- Income Tax Officer and another) , wherein it has been held that even when the reason recorded for reopening the assessment given in notice under section 148 of the Income Tax Act does not survive then also tax can be levied by the Assessing Officer on different reason if the same has come to the notice of the Assessing Officer subsequently during the course of proceedings. As such, for the reasons given in the aforesaid judgment, the first question of law is decided in favour of the Revenue and against the assessee.
As regards the second question of law, learned counsel for the parties agree that the same is covered by the judgment of this Court in the case of assessee itself in ITA No.2607/2005 (The Commissioner of Income-Tax & anr. –vs- M/s.Mandovi Motor)
on 22.3.2007 for the assessment year 1998-99. In the light of the said judgment, the second question of law is decided in favour of the assessee and against the Revenue.
Accordingly, this appeal stands disposed of by answering the first question in favour of the Revenue and the second question in favour of the assessee.
Sd/- JUDGE
Sd/- JUDGE
Bkm.