Circular v. Alom Extrusions Limited Reported In [2009] 114 Taxmann.com 506 (Karnataka

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF AUGUST, 2021 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE HEMANT CHANDANGOUDAR ITA NO.811 OF 2018 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX, CIT (A) 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU - 560 095. 2. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE - 1(1)(1) 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU - 560 095. ... APPELLANTS (BY SRI E.I.SANMATHI, ADVOCATE FOR SRI K.V.ARAVIND, ADVOCATE) AND: M/S AMBUTHIRTHA POWER P. LTD., NO.37, 1ST FLOOR, RMJ MANDOTH TOWERS, 2ND CROSS, VASANTHA NAGAR, BENGALURU - 560 052, PAN: AACCA 9267G. ... RESPONDENT (BY MISS MANASA ANANTHAN, ADVOCATE FOR SRI T SURYANARAYAN, ADVOCATE) THIS ITA IS FILED UNDER SECTION UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 06.07.2018 PASSED IN ITA NO.855/BANG/2018, FOR THE ASSESSMENT YEAR 2013-2014 PRAYING TO: I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE, II. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITA NO.855/BANG/2018 DATED 06.07.2018 FOR ASSESSMENT YEAR 2013-2014 ANNEXURE-C CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1(1)(1), BENGALURU AND ETC., THIS ITA COMING ON FOR HEARING, THIS ALOK ARADHE J., DELIVERED THE FOLLOWING: DAY, JUDGMENT Mr. E.I.Sanmathi, learned counsel for Mr. K.V.Aravind, learned counsel for the revenue. Miss Manasa Ananthan, learned counsel for the assessee. This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue against the order dated 6.7.2018 passed by the Income Tax Appellate Tribunal. The subject matter of the appeal pertains to the Assessment year 2013-14. The appeal was admitted by a bench of this Court vide order dated 04.02.2019 on the following substantial questions of law: "1. Whether on the facts and circumstances of the case, the Tribunal is justified in setting aside the addition made under section 2(24)(x) r/w/s 36(1) (va) of the Act disallowed Rs.5,04,40,313/- by following the decision of this Hon'ble Court even when the ingredients of said provision are satisfied in case of assessee ignoring the decision of Gujurath High Court in case of Gujurath State Road Transport Corporation (reported in 2012 (Vol.41) Taxman.com 100)"? 2."Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that carbon credit receipts are liable to be treated as capital receipts even when the assessee as claimed under section 80IA on said receipts on sale of power and the nature of receipts are in the nature of capital receipts? 3." Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside the disallowance made under section 14A read with Rule 8D of the Act even when CIT(A) had rightly confirmed the disallowance and without appreciating the Board's Circular No.5 of 2014 dated 11/2/2014, whereby it is stipulated that section 14A attracts even when there is no exempt income earned by assessee during the current financial year"? 2. When the matter was taken up today, the learned counsel for the assessee submitted that the 1st substantial question of law involved in this appeal is required to be answered in favour of the assessee in view of the decision of the Supreme Court vide judgment dated 25.11.2009 in the case of COMMISSIONER OF INCOME-TAX, BANGALORE Vs. ALOM EXTRUSIONS LIMITED reported in [2009] 114 TAXMANN.COM 506 (KARNATAKA) Circular No.5 of 2014 dated 11/2/2014, whereby it is stipulated that section 14A attracts even when there is no exempt income earned by assessee during the current financial year"? 2. When the matter was taken up today, the learned counsel for the assessee submitted that the 1st substantial question of law involved in this appeal is required to be answered in favour of the assessee in view of the decision of the Supreme Court vide judgment dated 25.11.2009 in the case of COMMISSIONER OF INCOME-TAX, BANGALORE Vs. ALOM EXTRUSIONS LIMITED reported in [2009] 114 TAXMANN.COM 506 (KARNATAKA) 3.It is further submitted that the 2nd and 3rd substantial questions of law involved in this appeal is already been answered in favour of the assessee by this Court vide judgment dated 5.10.2020 passed by this Court in ITA No.425/2014 in the case of THE COMMISSIONER OF INCOME TAX AND ANOTHER VS. M/S. AMBUTHIRTHA POWER PVT. Ltd., as well as in the Judgment dated 23.02.2021 passed by this Court in ITA No.1055/2017 in the case of THE COMMISSIONER OF INCOME-TAX AND ANOTHER.Vs. M/S QUEST GLOBAL ENGINEERING SERVICES PVT. LTD. in favour of the assessee and against the revenue. 4. The aforesaid submission could not be disputed by the learned counsel for the revenue. 5. For the reasons assigned in the aforementioned judgments supra the substantial questions of law framed in this appeal are answered in favour of the assessee and against the revenue. In the result, we do not find any merit in this appeal and the same fails and is hereby dismissed. Sd/- JUDGE HR Sd/- JUDGE