At The Outset, Shri Balram Rao Submits That Issue Involved In This Appeal Is Covered By The Decision Of This Court In The Commissioner Of Income Tax And Another v. M/S. Quest Global Engineering Services Pvt. Ltd,[2] Holding The Question Of Law In Assessee’s Favour

Digitally signedby YASHODHA NLocation: HIGHCOURT OFKARNATAKA IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30 DAY OF JANUARY, 2023 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR INCOME TAX APPEAL NO. 114 OF 2020 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX CIT(A) 5 FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU-560 095 2. THE ASST. COMMISSIONER OF INCOME TAX CIRCLE-2(1)(2), 2 FLOOR BMTC BUILDING, 80 FEET ROAD KORMANGALA BENGALURU-560 095 …APPELLANTS (BY SHRI. M. DILIP, STANDING COUNSEL FOR SHRI. K.V. ARAVIND, SENIOR STANDING COUNSEL) AND: DHRUVI SECURITIES PVT. LTD NO.25/1, SKIP HOUSE MUSEUM ROAD BENGALURU-560 025 PAN:AACCD 6532D …RESPONDENT (BY SHRI. BALRAM R. RAO, ADVOCATE) THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED PASSED IN ITA NO.1904 /BANG/2017, FOR THE ASSESSMENT YEAR 27.09.2019 2013-2014 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL BY SETTING ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 1904/BANG/2017 DATED FOR ASSESSMENT YEAR 2013-2014 ANNEXURE-D AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2(1)(2), BENGALURU. AND ETC. 27.09.2019 THIS ITA, COMING ON FOR ORDERS, THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the Revenue challenging the order dated 27.09.2019 in ITA No.1904/Bang/2017 passed by the ITAT[1], "C" Bench, Bangalore, has been admitted to consider the following question of law: Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside further addition made by assessing authority under section 14A of the Act by holding that the disallowance under said section should be restricted to the income earned by the assessee which does not become part of total income under the Act which is in sum of Rs.4,11,628 being dividend income exempt under section 10(34) and (35) of the Act and long term capital gain of Rs.2,06,84,487 earned on sale of Kotak Shares which is exempt under section 10(38) of the Act even though section 14A of the Act stipulate word ‘includible’ in total income and as such exempt income/apportionable to any investment which is going to earn any exempt income either in that financial year or any other financial year is liable for disallowance under section 14A of the Act? 2. Heard Shri M.Dilip, learned Standing Counsel for the appellants-Revenue and Shri Balram R.Rao, learned Advocate for the respondent-Assessee. 3. At the outset, Shri Balram Rao submits that issue involved in this appeal is covered by the decision of this Court in The Commissioner of Income Tax and another Vs. M/s. Quest Global Engineering Services Pvt. Ltd,[2] holding the question of law in assessee’s favour. 4. The said submission is not disputed by Shri Dilip, in his usual fairness. 5. In view of the above, the following: (i) Appeal is dismissed; 2 ITA No.133/2015 DD 15.02.2021 (ii) The substantial question of law is answered in favour of the Assessee and against the Revenue. No costs. Sd/- JUDGE Sd/- JUDGE YN.