M/S Manyata Promoters Pvt. Ltd., vs The Deputy Commissioner Of ...
2021 Latest Caselaw 88 Kant

                               1



 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 4TH DAY OF JANUARY 2021

                         PRESENT

        THE HON'BLE MR. JUSTICE ALOK ARADHE

                              AND

       THE HON'BLE MR. JUSTICE V. SRISHANANDA

                   I.T.A. NO.452 OF 2014
BETWEEN:

M/S. MANYATA PROMOTERS PVT. LTD.
CLASSIC COURT, 1ST FLOOR
9/1, RICHMOND ROAD
BANGALORE - 560 025
(REPRESENTED BY ITS DIRECTOR
P R RAMAKRISHNAN
AGED ABOUT 62 YEARS
S/O SRI. P.V. RAJAGOPALAN).
                                             ... APPELLANT
(BY MRS. SUSHMA RAVINDRA, ADV., FOR
     MR. K.K. CHYTHANYA, ADV.,)

AND:

THE DEPUTY COMMISSIONER OF INCOME-TAX
CENTRAL CIRCLE - 2(2)
C.R. BUILDINGS, QUEENS ROAD
BANGALORE - 560 001.
                                           ... RESPONDENT
(BY MR. K.V. ARAVIND, ADV.)
                              ---

     THIS ITA IS FILED UNDER SECTION 260-A OF I.T. ACT,
1961 ARISING OUT OF ORDER DATED 13.06.2014 PASSED IN ITA
NO.1616/BANG/2012 FOR THE ASSESSMENT YEAR 2009-10,
PRAYING TO:
                            2



      (I) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW
STATED ABOVE.
      (II) ALLOW THE APPEAL AND SET ASIDE THE IMPUGNED
ORDER (TO THE EXTENT PREJUDICIAL) OF THE INCOME TAX
APPELLATE TRIBUNAL BEARING ITA NOS.1616/BANG/2012 DATED
13.06.2014 FOR THE ASSESSMENT YEAR 2009-10.

     THIS ITA 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 assessee. The subject matter

of the appeal pertains to the Assessment year 2009-10.

The appeal was admitted by a bench of this Court vide

order dated 31.03.2015 on the following substantial

questions of law:

(i) Whether on the facts and in the circumstances of the case, the Honourable ITAT, Bangalore Bench is right in law in upholding applicability of Section 14A r.w. Rule 8D in a case where the book profits shall be deemed to be total income as per Section 115JB(2)?

(ii) Whether on the facts and in the circumstances of the case, the Honourable

ITAT, Bangalore Bench is right in law in upholding invocation of Section 14A r.w. Rule 8D for the purpose of Explanation (f) below Section 115JB(2) while computing book profits?

(iii) Whether on the facts and in the circumstances of the case, the Honourable ITAT, Bangalore Bench, justified in law in upholding the disallowance under Section 14A r.w. Rule 8D when the conditions for invoking Section 14A read with Rule 8D did not exist in the instant case?

(iv) Whether on the facts and in the circumstances of the case, the Honourable ITAT, Bangalore Bench justified in law in upholding invocation of Section 14A r.w. Rule 8D when the owned funds far exceeded the funds invested in exempt securities?

(v) Whether on the facts and in the circumstances of the case, the Honourable ITAT, Bangalore Bench justified in law in upholding invocation of Section 14A r.w. Rule 8D even when the disallowance exceeded the

exempt income?

(vi) Whether on the facts and in the circumstances of the case, Honourable ITAT, Bangalore Bench justified in law in upholding invocation of Section 14A r.w. Rule 8D even when no exempt income was earned?

2. For the reasons assigned by us in the

judgment passed today in I.T.A.No.203/2015, the

substantial questions of law framed by a bench of this

court are answered in favour of the assessee and

against the revenue. The order passed by the tribunal

dated 13.06.2014 insofar as it pertains to the findings

recorded against the assessee is hereby quashed.

In the result, the appeal is allowed.

Sd/-

JUDGE

Sd/-

JUDGE ss