By Sri M.v.seshachala, Senior Counsel Forsri Aravind v. Chavan, Advocate)Sri Aravind V. Chavan, Advocate

-1- - ITA No.726/2015 C/W| ITA Nos.725/2015 & 7/24/2015 IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 2Q DAY QF SEPTEMBER JZQO1/ PRESENT| THE HON'BLE MR. JUSTICE H.G.RAMESHAND THE HON‘'BLE MRS, JUSTICE K.S.MUDAGAL INCOME TAX APPEAL No.726/2015C/wINCOME TAX APPEAL Nos.725/2015 & 724/2015 IN ITA No.726/2015: BETWEEN : M/S S.K.PROPERTIES—NO.103, ALFA CARLESTON™WHEELER ROAD|COOKE TOWNBENGALURU —- 560 QOQREPRESENTED BY LTS PARTNER!MR, A.R.SARDAR KHAN. ...APPELLANT| (BY SRI M.V.SESHACHALA, SENIOR COUNSEL FORSRI ARAVIND V. CHAVAN, ADVOCATE)SRI ARAVIND V. CHAVAN, ADVOCATE) AND : 1.|THE INCOME TAX OFFICER WARD-1(2), HMT BHAVAN BELLARY ROAD, BENGALURU —- 560 O31 2DTHE COMMISSIONER OF INCOME-TAX-1CENTRAL CIRCLE, C.R.BUILDINGSQUEENS ROADBENGALURU —- 560 OO]. RESPONDENTSCENTRAL CIRCLE, C.R.BUILDINGSQUEENS ROADBENGALURU —- 560 OO]. RESPONDENTS (BY SRI JEEVAN J.NEERALGI, ADVOCATE) -2- - ITA No.726/2015 C/W|ITA Nos.725/2015 & 7/24/2015 IN ITA No.725/2015: BETWEEN : M/S S.K.PROPERTIES—NO.103, ALFA CARLESTON™WHEELER ROAD|COOKE TOWNBENGALURU - 560 005REPRESENTED BY LTS PARTNER!SRI A.R.SARDAR KHAN ...APPELLANT| (BY SRI M.V.SESHACHALA, SENIOR COUNSEL FOR SRI ARAVIND V. CHAVAN, ADVOCATE) AND : 1.|THE INCOME TAX OFFICER WARD-1(2), HMT BHAVAN BELLARY ROAD, BENGALURU —- 560 O31 2DTHE COMMISSIONER OF INCOME-TAX-1CENTRAL CIRCLE, C.R.BUILDINGSQUEENS ROADBENGALURU —- 560 OO]. RESPONDENTSCENTRAL CIRCLE, C.R.BUILDINGSQUEENS ROADBENGALURU —- 560 OO]. RESPONDENTS (BY SRI E.I.L.SANMATHI, ADVOCATE IN ITA No.724/2015: BETWEEN : M/S S.K.PROPERTIESNO.103, ALFA CARLESTON™WHEELER ROAD|COOKE TOWNBENGALURU —- 560 QOQREPRESENTED BY LTS PARTNER!MR. A.R.SARDAR KHAN. — APPELLANT (BY SRI M.V.SESHACHALA, SENIOR COUNSEL FORSRI ARAVIND V. CHAVAN, ADVOCATE) -3- - ITA No.726/2015 C/W| ITA Nos.725/2015 & 7/24/2015 AND : 1.|THE INCOME TAX OFFICER WARD-1(2), HMT BHAVAN BELLARY ROAD, BENGALURU —- 560 O31 2DTHE COMMISSIONER OF INCOME-TAX-1CENTRAL CIRCLE, C.R.BUILDINGS QUEENS ROAD, BENGALURU —- 560 OO1_ ...RESPONDENTS (BY SRI JEEVAN J.NEERALGI, ADVOCATE) THESE INCOME TAX APPEALS ARE FILED UNDER SECTION.260-A OF I.T.ACT, 1961 PRAYING TO FORMULATE THE)SUBSTANTIAL QUESTIONS OF LAW AND [TO SET ASIDE THECOMMON.ORDERDATED23.01.7015PASSED|IN|ITANo.6/70/BANG/2009,TTANo.855/BANG/2011,.TTANo.669/BANG/2009 BY THE ITAT, BANGALORE BENCH ‘B’.BANGALORE, ETC. THESE|INCOME|TAXAPPEALSCOMINGON|FORADMISSION, THIS’ DAY,H.G.RAMESH J], DELIVERED THEFOLLOWING:JUDGMENT H.G.RAMESH, J. (Oral)& 1.Tnese three appeals are directed against the commonorder dated 23.01.2015 passed by the Income Tax | Appellate|Tribunal,BangaloreBencn\pr BIn.ITA.Nos.670/Bang/2009,855/Bang/2011and669/Bang/2009. Bangalore, 2 |Sri M.V.Sesnacnala, learned Senior Counsel appearingfor the appellant submitted that the Tribunal nas erred in|law in observing that the method of accountancy adopted|by the Assessing Officer for the assessment year 2007-08| -4- - ITA No.726/2015 C/W| ITA Nos.725/2015 & 7/24/2015 for recognition of the revenue has not been challenged by.tne assessee. The learned Senior Counsel submitted that.tne observation made by the Tribunal is factually erroneous|as the order relating to the Assessment Year 2007-08 was|challenged before the Income Tax Appellate Tribunal in.ITA.No.783/Bang/2015 and the order was set aside by the) Appellate Tribunal with the following observations: Appellate|Tribunal,BangaloreBencn\pr BIn.ITA.Nos.670/Bang/2009,855/Bang/2011and669/Bang/2009. Bangalore, 2 |Sri M.V.Sesnacnala, learned Senior Counsel appearingfor the appellant submitted that the Tribunal nas erred in|law in observing that the method of accountancy adopted|by the Assessing Officer for the assessment year 2007-08| -4- - ITA No.726/2015 C/W| ITA Nos.725/2015 & 7/24/2015 for recognition of the revenue has not been challenged by.tne assessee. The learned Senior Counsel submitted that.tne observation made by the Tribunal is factually erroneous|as the order relating to the Assessment Year 2007-08 was|challenged before the Income Tax Appellate Tribunal in.ITA.No.783/Bang/2015 and the order was set aside by the) Appellate Tribunal with the following observations: OTv suveesssssesseseeceee DNELFEFOrFE IN OUF CONSiderematter requires a fresn examination by the Assessing.Officer in the lignt of the above position of law.)Therefore, we remand this matter back to the file of the.Assessing Officer with a direction that the income in.respect of sale of plots can be recognized only in the.year in wnich conveyance deed executed is registered in.favour of the buyers and to allow the developmentexpenditure incurred as expenditure or the expenditure.likely to be incurred on the plots sold as expenditure.And this direction also goes in line in consonance with.the provisions of accounting standard 9 which clearly.lays down that matching is required to be done on.accrual basis in respect of the income offered to tax and.upheld by Hon'ble Supreme Court in the case of CIT Vs.Taparia Tools Ltd.”| In view of the above, the learned Senior Counsel submittedthat the impugned order is not correct and the matter|requires to be reconsidered by the Assessing Officer. 3.Sri Jeevan J. Neeralgi, learned Counsel appearing for|the respondents fairly submitted that the Tribunal has_committed a factual error in making the aforesaidopservation referred to at para 2 above. Accordingly, he|submitted that the impugned order may be set aside and) -5- - ITA No.726/2015 C/W| ITA Nos.725/2015 & 7/24/2015 the matter may be remitted to the Assessing Officer forreconsideration in terms of the order made by tne AppellateTribunal in ITA No.783/Bang/2015. Hence, we make the)following order: (i) Tne common order dated 23.01.2015 passed by theIncome Tax Appellate Tribunal, Bangalore Bencn B,,|Bangalore in ITA.Nos.6/70/Bang/2009, 855/Bang/2011 and669/Bang/2009 wnhicn is impugned in these appeals is setaside; (ii) The matter is remitted to the Assessing Officer forreconsideration in terms of the order made by the AppellateTribunal in ITA No.783/Bang/2015. All contentions of both|the parties are kept open. Appeals disposed of. 1B| Sd/-— JUDGE| Sd/- | JUDGE|