Karnataka High Court
Devon Plantations And Industries ... vs The Dy. Commissioner Of Income Tax on 22 March, 2021
Author: Alok Aradhe Kamal
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22ND DAY OF MARCH 2021
PRESENT
THE HON'BLE MR. JUSTICE ALOK ARADHE
AND
THE HON'BLE MR. JUSTICE M.G.S. KAMAL
I.T.A. NO.247 OF 2018
BETWEEN:
DEVON PLANTATIONS AND INDUSTRIES LTD.,
NO.29, EMPIRE INFANTRY
INFANTRY ROAD, SHIVAJI NAGAR
BENGALURU-560001
REP. BY ITS MANAGING DIRECTOR
MS. ROSHIN VARGHESE.
... APPELLANT
(BY SRI. THOMAS VELLAPALLY, ADV.,)
AND:
1. THE DY. COMMISSIONER OF INCOME TAX
CIRCLE 11(1), C.R. BUILDING
QUEENS ROAD, BENGALURU-560001.
2. THE COMMISSIONER OF INCOME TAX
C.R. BUILDING, QUEENS ROAD
BENGALURU-560001.
... RESPONDENTS
(BY SRI. E.I. SANMATHI, ADV., FOR R1 & R2)
---
THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX
ACT 1961, ARISING OUT OF ORDER DATED 17.11.2017 PASSED
IN ITA NO.1940/BANG/2016 (ANNEXURE-G), FOR THE
ASSESSMENT YEAR 2007-08, PRAYING TO FORMULATE THE
2
SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. ALLOW THE
APPEAL AND SET ASIDE THE IMPUGNED ORDER OF THE INCOME
TAX APPELLATE TRIBUNAL, 'C' BENCH, BANGALORE,
PRONOUNCED ON 17.11.2017 IN ITA NO.1940/BANG/2016
(ANNEXURE-G) TO THE EXTENT QUESTIONED HEREIN. PASS
SUCH OTHER OR FURTHER ORDERS AS THIS HON'BLE COURT
DEEMS FIT TO GRANT ON THE FACTS AND IN THE
CIRCUMSTANCES OF THE CASE AND IN THE INTERESTS 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 filed against the judgment dated 17.11.2017
passed by the Income Tax Appellate Tribunal.
2. The appeal was admitted by a bench of this
Court vide order dated 09.11.2018 on the following
substantial questions of law:
"(i) Whether the appellant was entitled
to adjust the indexed cost of acquisition
under the second proviso to Section 48 of the
Income Tax Act, 1961, while computing
capital gains on the sale of shade trees
during the assessment year 2007-08?
2. Whether the findings of the Tribunal
"that it was incumbent on the appellant to
allege during the assessment proceedings
that the trees which were now sold were in
existence prior to 01.04.1981" and "no such
material / evidence was brought on record
before the Tribunal or the lower authorities"
is perverse, contrary to the record and
illegal?"
3. Facts leading to filing of this appeal briefly
stated are that the assessee is a Company engaged in
tea/coffee business and owns estates in the State of
Karnataka. For the assessment year 2007-08, the
business income of the assessee was worked out as per
Rule 7B and Rule 8 of the Income Tax Rules. The
assessee had declared short term capital gain of
Rs.78,412/- from sale of shares and long term capital
loss on coffee futures exchange of Rs.7,200/-. The
assessee also declared loss of Rs.60,48,245/- under the
head 'long term capital loss' on sale of timber. After
adjusting long term capital loss on the sale of timber,
the net loss of the assessee was Rs.59,77,032/-.
4. During the course of the re-assessment
proceedings, it was found that the assessee was wrongly
reporting income from capital gains, as the assessee had
adopted wrong methods of indexation of sale of timber.
The case was re-opened for assessment. The Assessing
Authority, by an order dated 30.09.2014, completed the
assessment and held that 30% of the total sale
consideration should be taken as capital gain for the
Assessment year 2007-2008 and Assessment year
2008-2009.
5. The Assessee filed appeals before the
Commissioner of Income Tax (Appeals), who by order
dated 10.08.2016, dismissed the appeals preferred by
the Assessee in respect of the Assessment years 2007-
2008 and 2008-2009. The assessee thereupon filed
appeals before the Income Tax Appellate Tribunal. The
Tribunal, by a common order dated 17.11.2017,
dismissed the appeals preferred by the assessee and
interalia held that the assessee had no case on the issue
that the trees in question were planted / acquired prior
to 1981.
6. The learned counsel for the assessee submitted
that the finding recorded by the Tribunal in this regard is
perverse, as the same is based on surmises and
conjectures. It is further submitted that the matter
deserves to be remanded to the Assessing Officer, as
the issue requires factual adjudication afresh. In
support of the aforesaid submission, learned counsel
places reliance on a decision of this court in the case of
TATA COFFEE LIMITED vs. THE JOINT
COMMISSIONER OF INCOME TAX (2012) 211
TAXMAN 7 (Kar).
7. Learned counsel for the Revenue submitted that
all the contentions of both the parties may be kept open
and the Assessing Officer may be directed to re-do the
assessment, in accordance with law.
8. We have considered the submissions made on
both sides and have perused the record.
9. After perusal of the record, in our considered
opinion, the factual controversy between the parties
requires adjudication afresh, in the light of the material
available on record. The impugned orders passed by the
Tribunal / Commissioner of Income Tax (Appeals) as
well as by the Assessing Officer are hereby quashed.
The matter is remitted to the Assessing Officer to make
a fresh assessment again.
It is needless to state that all the contentions of
the parties to be kept open. Therefore, for the afore-
mentioned reasons, it is not necessary for us to answer
the substantial questions of law framed in this appeal.
In the result, the appeal is disposed of with the
aforesaid direction.
Sd/-
JUDGE
Sd/-
JUDGE
KS
