At The Outset, Shri A.shankar, Learned Senior Advocate Submitted That Questions v. M/S.kbd Sugars & Distilleries Ltd[1].Questions

Digitally signed byANUSHA VLocation: HighCourt Of Karnataka ITA No. 309 of 2019 C/W ITA No. 310 of 2019 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6 DAY OF DECEMBER, 2022 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR. JUSTICE T.G.SHIVASHANKARE GOWDA INCOME TAX APPEAL NO. 309 OF 2019 C/W INCOME TAX APPEAL NO. 310 OF 2019 IN I.T.A NO. 309 OF 2019 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME-TAX, CIT(A) CENTRAL CIRCLE C.R.BUILDING QUEEN'S ROAD BENGALURU-560 001. 2. THE ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-2(1) C.R.BUILDING QUEEN'S ROAD BENGALURU-560 001. …APPELLANTS (BY SHRI. K.V.ARAVIND, STANDING COUNSEL) AND: M/s. KBD SUGAR & DISTILLERIES LTD. NO.17, SANKEY ROAD BENGALURU-560 020. PAN: …RESPONDENT (BY SHRI. A.SHANKAR, SENIOR ADVOCATE FOR SHRI. M.LAVA, ADVOCATE) ITA No. 309 of 2019 C/W ITA No. 310 of 2019 THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED:14/09/2018 PASSED IN ITA NO.172/BANG/2017, FOR THE ASSESSMENT YEAR 2012-2013, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATE THEREIN AND ETC. IN I.T.A NO. 310 OF 2019 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME-TAX, CIT(A) CENTRAL CIRCLE C.R.BUILDING QUEEN'S ROAD BENGALURU-560 001. 2. THE ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-2(1) C.R.BUILDING QUEEN'S ROAD BENGALURU-560 001. …APPELLANTS (BY SHRI. K.V.ARAVIND, STANDING COUNSEL) AND: M/s. KBD SUGAR & DISTILLERIES LTD. NO.17, SANKEY ROAD BENGALURU-560 020. PAN:AAACK 5851A. …RESPONDENT (BY SHRI. A.SHANKAR, SENIOR ADVOCATE FOR SHRI. M.LAVA, ADVOCATE) THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED:14/09/2018 PASSED IN ITA NO.975/BANG/2017, FOR THE ASSESSMENT YEAR 2013-2014, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ETC. THESE INCOME TAX APPEALs, COMING ON FOR FINAL HEARING, THIS DAY, P.S.DINESH KUMAR J., DELIVERED THE FOLLOWING: ITA No. 309 of 2019 C/W ITA No. 310 of 2019 JUDGMENT ITA No.309/2019 by the Revenue challenging the order dated September 14, 2018, in ITA No.172/Bang/2017 for the A.Ys. 2012-13 and ITA No.310/2019 by the Revenue challenging the order dated September 14, 2018, in ITA No.975/Bang/2017 for the A.Ys. 2013-14 have been admitted to consider the following questions of law: "1. Whether on the facts and in the circumstances of the case, the Tribunal is correct in law to hold that assessee had applied the excess non-interest bearing funds for giving interest free loans to sister concerns even in the back ground of assessee not establishing the same? 2. Whether on the facts and in the circumstances of the case, the Tribunal is correct in law to hold that assessee's interest expenditure should be allowed even in the back ground that assessee had failed to establish that it had applied the excess non-interest bearing funds for giving interest free loans to sister concerns? 3. Whether on the facts and in the circumstances of the case, the Tribunal is correct in law to hold that assessee's interest expenditure should be allowed even in the back ground that assessee had failed to establish that it had applied the excess non-interest bearing funds for giving interest free loans to sister concerns relying on the assessee's own case in assessment years 2008-09 to 2010-11 even though the matter has not reached finality? 4. Whether on the facts and in the circumstances of the case, the Tribunal is correct in law in not following Rule 8D r.w.s. 14A even though assessee has earned exempt income? 5. Whether on the facts and in the circumstances of the case the Tribunal is correct in law in holding that Sec.14A r.w. Rule 8D is not applicable in this case? 3. Whether on the facts and in the circumstances of the case, the Tribunal is correct in law to hold that assessee's interest expenditure should be allowed even in the back ground that assessee had failed to establish that it had applied the excess non-interest bearing funds for giving interest free loans to sister concerns relying on the assessee's own case in assessment years 2008-09 to 2010-11 even though the matter has not reached finality? 4. Whether on the facts and in the circumstances of the case, the Tribunal is correct in law in not following Rule 8D r.w.s. 14A even though assessee has earned exempt income? 5. Whether on the facts and in the circumstances of the case the Tribunal is correct in law in holding that Sec.14A r.w. Rule 8D is not applicable in this case? 6. Whether on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that section 14A r.w.Rule 8D is not applicable in this case relying on the assessee's own case in AYs 2008-09 to 2010-11 even though the matter has not reached finality?" 2. Heard Shri K.V.Aravind, learned Senior Standing Counsel for the Revenue and Shri A.Shankar, learned Senior Advocate for the assessee. 2. Heard Shri K.V.Aravind, learned Senior Standing 3. At the outset, Shri A.Shankar, learned Senior Advocate submitted that questions No.1, 2 and 3 are answered in favour of the assessee and against the Revenue in The Pr.Commissioner of Income-Tax and Another Vs. M/s.KBD Sugars & Distilleries Ltd[1].Questions No.4, 5 and 6 are answered in favour of the assessee and against the Revenue in The Pr.Commissioner of Income-Tax and Another Vs. M/s.KBD Sugars & Distilleries Ltd[2]. 1ITA No.553/2016 decided on 14.12.2021 2ITA No.555/2016 decided on 14.12.2021 ITA No. 309 of 2019 C/W ITA No. 310 of 2019 4. Shri K.V.Aravind, learned Senior Standing Counsel for the Revenue does not dispute the above submission made by Shri A.Shankar. 5. Hence, the following; ORDER (i) Questions of law are answered in favour of the assessee and against the Revenue; and (ii) Appeals dismissed. No costs. Sd/- JUDGE Sd/- JUDGE