Karnataka High Court
The Income Tax Officer vs Mr. Sanath Kumar Murali on 10 February, 2025
Author: Krishna S Dixit
Bench: Krishna S Dixit
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NC: 2025:KHC:5830-DB
WA No. 968 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF FEBRUARY, 2025
PRESENT
THE HON'BLE MR JUSTICE KRISHNA S DIXIT
AND
THE HON'BLE MR JUSTICE G BASAVARAJA
WRIT APPEAL NO. 968 OF 2023 (T-IT)
BETWEEN:
1. THE INCOME TAX OFFICER
WARD-4(3)(3), BENGALURU
BMTC BUILDING, 80 FEET ROAD,
6TH BLOCK, KORAMANGALA,
BENGALURU-560 095.
2. THE PR. COMMISSIONER OF INCOME TAX-4
BMTC BUILDING, 80 FEET ROAD,
6TH BLOCK, KORAMANGALA
BENGALURU-560 095.
3. CENTRAL BOARD OF DIRECT TAXES
DEPARTMENT OF REVENUE,
MINISTRY OF FINANCE,
NORTH BLOCK, NEW DELHI-110002
REPRESENTED HEREIN BY ITS CHAIRPERSON
Digitally signed by 4. THE PR. CHIEF COMMISSIONER OF INCOME TAX
LAKSHMINARAYAN N
Location: High Court
KARNATAKA AND GOA REGION
of Karnataka GROUND FLOOR, C R BUILDING,
NO.1 QUEENS ROAD, BENGALURU-560001
...APPELLANTS
(BY SRI. RAVI RAJ Y.V., ADVOCATE)
AND:
MR. SANATH KUMAR MURALI
AGED 39 YEARS,
S/O MR. M V SANATH KUMAR
ADDRESS AT NO.102-A, VANAKANAHALLI
BENGALURU-562 106.
...RESPONDENT
(BY SRI. SANDEEP HUILGOL, ADV. FOR C/R1.)
-2-
NC: 2025:KHC:5830-DB
WA No. 968 of 2023
THIS WRIT APPEAL FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO a. SET ASIDE THE ORDER
PASSED BY THE LEARNED SINGLE JUDGE IN W.P. No.
7647/2023 (T-IT) DATED 24.05.2023 b. PASS SUCH OTHER
SUITABLE ORDERS AS THIS HON'BLE COURT DEEMS FIT ON
THE FACTS AND CIRCUMSTANCES OF THE CASECF
INSUFFICIENT/SUFFICIENTAPPEAL IS IN TIME/BARRED BY
TIMETHE COUNSEL FOR THE APPELLANT HAS NOT COMPLIED
OFFICE OBJECTIONS1. COURT FEE 100/- TO BE MADE GOOD.2.
ORDER DATED TO BE CORRECTLY STATED AT AGGRIVED PARA
IN BOTH SETS OF WRIT APPEAL.
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE KRISHNA S DIXIT
and
HON'BLE MR JUSTICE G BASAVARAJA
ORAL JUDGMENT
(PER: HON'BLE MR JUSTICE KRISHNA S DIXIT)
This intra-court appeal seeks to call in question the
learned Single Judge's Order dated 24th May, 2023
whereby respondent-Assessee's Writ Petition No.7647 of
2023 having been favoured, relief has been accorded to
him as under:
"21.Accordingly, the order at Annexure-'A'
dated 21.03.2023 passed under Section
148A(d) of the I.T. Act is set aside and the
noticed at Annexure-B dated 21.03.2023 issued
under Section 148 of the I.T. Act by the
respondent No.1 for the Assessment Year 2016-
2017 is set aside."
NC: 2025:KHC:5830-DB
2. Learned Senior Panel Counsel appearing for the
revenue vehemently argues that the impugned order being
contrary to the scheme of Section 149 of the Income Tax
Act, 1961, once an amount of Rs.50.00 lakh is ascertained
as escaped income for assessment, the interference of the
Writ Court was uncalled for.
3. Learned Counsel for the assessee, per contra,
submits that merely because the concerned conveyance
mentions Rs.55.00 lakh, that itself cannot be taken as the
income escaping assessment inasmuch as the cost of
acquisition to be deducted from it and if that is done, it
would fall below the ceiling limit of Rs.50.00 lakh. This
aspect of the matter, learned Counsel for the assessee
submits, was considered by a Division Bench of Madhya
Pradesh High Court sitting at Jabalpur in NITIN NEMA v.
OFFICE OF PRINCIPAL CHIEF COMMISSIONER OF INCOME
TAX1 and relief has been accorded to the Assessee of the
kind after referring to the order impugned in this appeal.
(2023) 458 ITR 690.
NC: 2025:KHC:5830-DB
He also tells us that challenge to the Jabalpur Bench's
order has attained finality at the hands of the Apex Court
in SLP No(C). 38708 of 2024 on 17.09.2024 and therefore,
the order of the learned Single Judge has secured
imprimatur of the Apex Court. So contending, he seeks
dismissal of the appeal.
4. Having heard the learned counsel for the parties
and having perused the appeal papers, we are broadly in
agreement with the views of the learned Single Judge,
inter alia, to the effect that while assessing the quantum
of escaped income in matters like this, the amount
mentioned in the registered conveyance cannot be straight
away taken without deducting the cost of acquisition
therefrom. This apart, as rightly submitted by the learned
counsel for the assessee, the Jabalpur Bench of Madhya
Pradesh High Court, in the case supra, followed the
impugned order of the learned Single Judge of this Court
and later the challenge by the Revenue before the Apex
Court of the Country has been repelled.
NC: 2025:KHC:5830-DB
In the above circumstances, there is no merit in the
appeal and accordingly it is dismissed, costs having been
made easy.
Sd/-
(KRISHNA S DIXIT)
JUDGE
Sd/-
(G BASAVARAJA)
JUDGE
LNN
