M/S Sri Chakra Cements Ltd., vs. The Income Tax Officer,

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF APRIL 2021 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE M.G.S. KAMAL I.T.A. NO.110 OF 2012 BETWEEN: 1. THE COMMISSIONER OF INCOME-TAX

LTU, JSS TOWERS

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

LTU, JSS TOWERS, BSK III STAGE

BANGALORE. ... APPELLANTS (BY SRI. K.V. ARAVIND, ADV.,) AND: M/S. SOBHA DEVELOPERS NO.42, II FLOOR DICKENSON ROAD BANGALORE-560058. ... RESPONDENT (BY SRI. A. SHANKAR, SR. COUNSEL FOR SRI. M. LAVA, ADV.,) - - - THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 16.12.2011 PASSED IN ITA NO.1026/BANG/2010 FOR THE ASSESSMENT YEAR 2006- 07, PRAYING TO: (i) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN.

2 (ii) ALL THE APPEAL AND SET ASIDE THE ORDER DATED 16.12.2011 PASSED BY THE ITAT, BANGALORE IN ITA NO.1026/BANG/2010 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX, LTU, BANGALORE, IN THE INTEREST OF JUSTICE AND EQUITY. THIS I.T.A. COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT This appeal under Section 260A 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 2006-07. The appeal was admitted by a bench of this Court vide order dated 11.06.2012 on the following substantial questions of law: "(i) Whether the Appellate Authorities were correct in rejecting the "percentage completion method" adopted by the Assessing Officer which took into consideration the cost incurred in the project the sales incurred in the project as well as the expenses i.e. over heads incurred in the project which would identify the true level of

3 activity and the correct percentage of profits for computing deduction u/s.80IB(10) of the Act as the correct method of accounting? (ii) Whether the Appellate Authorities were correct in holding that the cost incurred on the project as a percentage of the estimated cost of project was the correct basis to be adopted for arriving at the extent of completion of the project under the "Project Completion Method" has been correctly adopted by the assessee for computing deduction u/s.80IB of the Act? (iii) Whether the Appellate Authorities were correct in holding that the assessee is entitled to deduction u/s.80IB of the Act in respect of profits from sale of lands which was not owned by the assessee? (iv) Whether the Appellate Authorities were correct in holding that the land irrespective of whether it is owned by the assessee or not once the project is constructed it is entitled to deduction u/s.80IB of the Act?".

4 2. For the reasons assigned by us in the judgment passed today in I.T.A.No.383/2010, this appeal also stands dismissed. Sd/- JUDGE Sd/- JUDGE ss