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

Digitally signed byYASHODHA NLocation: HIGHCOURT OFKARNATAKA IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23 DAY OF JANUARY, 2023 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR. JUSTICE G BASAVARAJA INCOME TAX APPEAL NO.8 OF 2020 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME-TAX, CIT (A), CENTRAL CIRCLE C.R. BUILDING, QUEEN’S ROAD BENGALURU-560 001 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-12(2) PRESENT ADDRESS, ACIT, CENTRAL CIRCLE AAYAKAR BHAVAN,STAFF ROAD, FORT BELLARI-583 102 …APPELLANTS (BY SHRI. K.V. ARAVIND, SENIOR STANDING COUNSEL) AND: M/s. SIVAN SECURITIES P LTD. NO.1, RAHEJA CHAMBERS MUSEUM ROAD BANGALORE-560 001 PAN-AACCS 5138G …RESPONDENT (BY SHRI. K. SURYA NARAYANA, SENIOR ADVOCATE FOR MS. TANMAYEE RAJKUMAR, ADVOCATE) THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT, 1961, ARISING OUT OF ORDER DATED: 08/05/2019 PASSED IN ITA NO.715/BANG/2018 FOR THE ASSESSMENT YEAR 2011-2012, 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.715/BANG/2018 DATED: 08/05/2019 FOR ASSESSMENT YEAR 2011-2012 ANNEXURE-C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE ASSISTANT COMMISSISONER OF INCOME TAX, CENTRAL CIRCLE, BELLARY AND ETC. THIS APPEAL, COMING ON FOR HEARING, THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the Revenue challenging the order dated 08.05.2019 in ITA No.715/Bang/2018 passed by the ITAT[1], "B" Bench, Bangalore, has been admitted to consider following questions of law: 1. Whether on the facts and circumstances of the case and in law, the Tribunal was right in holding that the disallowance under section 14A should be restricted to the amount of exempt income earned even when assessee held and average investment of Rs.290.77 crores and conditions for invoking section 14A are fully satisfied in the case of the assessee with respect to entire amount of disallowance? 1 Income tax Appellate Tribunal, Bengaluru Bench 2. Whether on the facts and circumstances of the case and in law, the Tribunal was right in not distinguishing the asset held as stock in trade and as investment as laid down in the case of M/s. Maxopp Investment Ltd 402 ITR 640 (SC)? 3. Whether on the facts and circumstances of the case and in law, the Tribunal was right in not appreciating the facts that CBDT Circular No.5/2014 dated: 11-02-2014 has been in essence upheld by the Hon’ble Supreme Court and is binding law? 2. Heard Shri K.V.Aravind, learned Senior Standing Counsel for the appellants-Revenue and Shri K.Suryanarayana, learned Senior Advocate for the respondent-Assessee. 3. At the outset, Shri Suryanarayana 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 questions of law in assessee’s favour. 4. The said submission is not disputed by Shri Aravind, in his usual fairness. 5. In view of the above, the following: (i) Appeal is dismissed; (ii) The substantial questions of law are answered in favour of the Assessee and against the Revenue. favour of the Assessee and against the Revenue. No costs. Sd/- JUDGE Sd/- JUDGE YN.