M/S Karnataka State Industrial vs Deputy Commissioner Of Income Tax
2021 Latest Caselaw 1918 Kant

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 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 19TH 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.184 OF 2017
BETWEEN:

M/S. KARNATAKA STATE INDUSTRIAL
AND INFRASTRUCTURE DEVELOPMENT
CORPORATION LTD.,
REP. BY ITS CHAIRMAN
AND MANAGING DIRECTOR
SMT. P. HEMALATHA
KHANIJA BHAVAN, NO.49
4TH FLOOR, EAST WING
RACE COURSE ROAD, BANGALORE-560001
PAN:AAACK5531H.
                                           .... APPELLANT
(BY MR. A. SHANKAR, SR. COUNSEL FOR
    MR. M. LAVA, ADV.,)

AND:

DEPUTY COMMISSIONER OF INCOME TAX
CENTRAL CIRCLE-11(5)
R.P. BHAVAN, OPP. RBI
NRUPATHUNGA ROAD
BANGALORE-560001.

PRESENTLY
BMTC BUILDING
KORAMANGALA 6TH BLOCK
BANGALORE-560095.
                                          ... RESPONDENT
(BY MR. K.V. ARAVIND, ADV.,)
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      THIS I.T.A. IS FILED UNDER SEC.260-A OF INCOME TAX
ACT 1961, ARISING OUT OF ORDER DATED 09.12.2016 PASSED
IN ITA NO.1660/BANG/2013, FOR THE ASSESSMENT YEAR 2010-
11, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTION OF
LAW AS STATED ABOVE AND ANSWER THE SAME IN FAVOUR OF
THE APPELLANT.     ALLOW THE APPEAL AND SET ASIDE THE
FINDINGS TO THE EXTENT AGAINST THE APPELLANT IN THE
ORDER PASSED BY THE ITAT, BENGALURU BENCH IN ITA
NO.1660/BANG/2013 DATED 9.12.2016 FOR THE ASSESSMENT
YEAR 2010-11. PASS SUCH OTHER ORDERS, AS THIS HON'BLE
COURT DEEMS FIT AND PROPER TO MEET THE ENDS OF JUSTICE.

     THIS I.T.A. COMING ON FOR HEARING,            THIS   DAY,
ALOK ARADHE J., DELIVERED THE FOLLOWING:

                       JUDGMENT

Mr.A.Shankar, learned Senior counsel for

Mr.S.Annamalai, learned counsel for the assessee.

Mr.K.V.Aravind, learned counsel for the revenue

has entered appearance through video conferencing.

This appeal under Section 260A of the Income Tax

Act, 1961 (hereinafter referred to as 'the Act' for short)

has been filed by the assessee against the order dated

09.12.2016 passed by the Income Tax Appellate

Tribunal. The subject matter of the appeal pertains to

the Assessment Year 2010-11. The appeal was

admitted by a Bench of this Court vide order dated

05.12.2017 on the following substantial questions of

law:

"(i) Whether the Tribunal is justified in law in holding that the appellant is not entitled to the reduction of the amount of Rs.5,24,38,393/- credited to the profit and loss account on account of reversal of provision for bad and doubtful debts under section 115JB of the Act, on the facts and circumstances of the case?

(ii) Without prejudice, whether the Tribunal in law failed to take note of the fact of retrospective amendment by Finance (No.2) Act, 2009 with effect from 1.4.2001, by which the computation of book profit as per MAT provisions requires the provision for bad and doubtful debts to be added back and consequently book profits under MAT provisions are to computed for such earlier assessment years in accordance with amended scheme of the Act and further such amended computation ought to form the basis of computation of MAT for the subsequent years and accordingly the authorities below ought to have allowed the reduction of Rs.16,11,65,105/- under proviso to clause (i) of Explanation 1 to

section 115JB(2), on the facts and circumstances of the case?

(iii) Without prejudice, whether the Tribunal in law failed to appreciate that the appellant had added back the provision for bad and doubtful debts for certain years and hence ought to have granted the deduction in respect of reversal of provision for bad and doubtful debts at least to that extent, on the facts and circumstances of the case?"

2. When the matter was taken up today, learned

counsel for the assessee submitted that the aforesaid

substantial questions of law have already been answered by

this Court in ITA No.409/2014 (Karnataka State Industrial

and Infrastructure Development Corporation Limited Vs.

DCIT) dated 05.01.2021 and in ITA No.11/2021 (KSIIDC Vs.

DCIT) decided on 05.02.2021. The aforesaid submission

could not be disputed by the learned counsel for the revenue.

3. For the reasons assigned in the judgments dated

05.01.2021 and 05.02.2021 passed in ITA No.409/2014 and

ITA No.11/2021, the substantial questions of law are

answered in favour of the assessee.

In the result, order dated 09.12.2016 for the

Assessment Year 2010-11 to the extent relating to the

assessee in respect of the aforesaid substantial questions of

law, is hereby quashed and the appeal is allowed.

Sd/-

JUDGE

Sd/-

JUDGE

RV