Bhoruka Park Private Limited

Income Tax Appellate Tribunal, BENGALURU,

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

ON THE 3RD DAY OF DECEMBER, 2018

BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH

AND

THE HON'BLE MR. JUSTICE K. NATARAJAN

INCOME TAX APPEAL NO.265 OF 2014

BETWEEN:

THE COMMISSIONER OF INCOME-TAX

CENTRAL CIRCLE,

C.R. BUILDING, QUEENS ROAD,

BENGALURU.

THE DEPUTY COMMISSIONER INCOME-TAX

CENTRAL CIRCLE-1(3),

C.R. BUILDING, QUEENS ROAD,

BENGALURU.

... APPELLANTS

(BY SRI K.V. ARAVIND, ADVOCATE)

AND:

THE SENATE

SHERIFF CENTRE,

73/1, ST. MARKS ROAD,

BENGALURU. ... RESPONDENT (BY SRI A. SHANKAR, SENIOR COUNSEL, ALONG WITH SRI M. LAVA, ADVOCATE)

THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU, IN I.T.A. NO.587/BANG/2011 DATED 10-1-2014 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(3), BENGALURU.

THIS INCOME TAX APPEAL COMING ON FOR HEARING THIS DAY, RAVI MALIMATH, J., DELIVERED THE FOLLOWING: J U D G M E N T

The Revenue has filed this appeal challenging the order of the Tribunal by raising two substantial questions of law:

Whether the Tribunal was correct in holding that if it is found on verification of the agreement and document that the assessee has entered into an agreement with IBC knowledge Park Private Limited for acquisition of immovable property then the advance would be stock-in-trade without appreciating that as the assessee had not put the asset into use, the

investment along with the interest would be capitalized and not allowed as the revenue expenditure u/s.36(i) (iii) and that there is no evidence to the effect that the so-called acquisition of rights is towards stock-in-trade?

Whether the Tribunal was right in directing the assessing officer to allow the expenditure if the assessee as entered into an agreement without appreciating that the assessee had not made any claim as a business expenditure in the return of income but made a claim u/s.24(1) of the Act?

However, on considering the contentions, we are of the view that no interference is called for. The Tribunal was of the view that the assessee did not file the copy of the agreement entered into between the assessee and IBC Knowledge Park Private Limited before the Authorities below and filed it as additional evidence. Under the circumstance, the Tribunal was of

the view that it is appropriate to remand the matter back to the Assessing Officer for verification of the documents and thereafter, to consider the case of the assessee.

In these circumstances, we are of the considered view that the order passed by the Tribunal does not call for any interference. The order of remand would benefit not only the Revenue, but also the assessee, in view of the reasons assigned by the Tribunal. Therefore, we are of the view that no substantial question of law arises for consideration.

Consequently, the appeal, being devoid of merit, is dismissed.

SD/-

SD/- JUDGE

JUDGE

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