Income Tax v. M/S Subex Ltd ., Disposed Off On 01.10.2021. Simila

Digitally signedby SHARADAVANI BLocation:HIGH COURTOFKARNATAKA C/W ITA No. 180 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27 DAY OF MAY, 2024 PRESENT THE HON'BLE MR JUSTICE KRISHNA S DIXIT AND THE HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR INCOME TAX APPEAL NO. 179 OF 2022C/WINCOME TAX APPEAL NO. 180 OF 2022 IN ITA NO.179/2022: BETWEEN: 1. THE PR COMMISSIONER OF INCOME TAX 5 FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. 5 FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. 2. THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 6(1)(1), PRESENT ADDRESS, DCIT, CIRCLE 1(1)(1), 2 FLOOR, BMTC BUIDLING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. CENTRAL CIRCLE 6(1)(1), PRESENT ADDRESS, DCIT, CIRCLE 1(1)(1), 2 FLOOR, BMTC BUIDLING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. (BY SRI. M DILIP.,ADVOCATE AND SRI. RAVIRAJ Y V., ADVOCATE) SRI. RAVIRAJ Y V., ADVOCATE) …APPELLANTS AND: M/S SUBEX LTD., RMZ ECOWORLD , OUTER RING ROAD, DEVARABISANAHALLI, BENGALURU 560 103, PAN NO. …RESPONDENT (BY SRI. CHYTHANYA K K., SENIOR ADVOCATE A/W SRI. TATA KRISHNA.,ADVOCATE) C/W ITA No. 180 of 2022 THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 05/02/2020 PASSED IN ITA NO. 2249/BANG/2019, FOR The ASSESSMENT YEAR 2007-2008. PRAYING TO 1. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 2249/BANG/2019 DATED 05/02/2020 FOR ASSESSMENT YEAR 2007-2008 ANNEXURE-C CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND TAX CIRCLE-6(1)(1), BENGALURU AND ETC., IN ITA NO.180/2022: BETWEEN: 1.THE PR. COMMISSIONER OF INCOME TAX 5 FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. 2.THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 6(1)(1), PRESENT ADDRESS, DCIT, CIRCLE 1(1)(1), 2 FLOOR, BMTC BUIDLING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. ...APPELLANTS (BY SRI. M DILIP.,ADVOCATE AND SRI. RAVIRAJ Y V., ADVOCATE) SRI. RAVIRAJ Y V., ADVOCATE) AND: M/S SUBEX LTD., RMZ ECOWORLD , OUTER RING ROAD, DEVARABISANAHALLI, BENGALURU 560 103. PAN NO. …RESPONDENT (BY SRI. CHYTHANYA K K., SENIOR ADVOCATE A/W SRI. TATA KRISHNA.,ADVOCATE) - 3 - NC: 2024:KHC:17601-DBITA No. 179 of 2022C/W ITA No. 180 of 2022 THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 05/02/2020 PASSED IN ITA NO. 2361/BANG/2019, FOR THE ASSESSMENT YEAR 2007-2008 PRAYING TO I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 2361/BANG/2019 DATED 05/02/2020 FOR ASSESSMENT YEAR 2007-2008 ANNEXURE-C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-6(1)(1), BENGALURU AND ETC., THESE INCOME TAX APPEALS, COMING ON FOR ADMISSION, THIS DAY, KRISHNA S DIXIT.J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the Revenue has the following two substantial questions of law: “VI. SUBSTANTIAL QUESTION OF LAW THESE INCOME TAX APPEALS, COMING ON FOR ADMISSION, THIS DAY, KRISHNA S DIXIT.J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the Revenue has the following two substantial questions of law: “VI. SUBSTANTIAL QUESTION OF LAW 1. "Whether on the facts and in the circumstances of the case, the Tribunal is right in setting aside the disallowance made under section 35-D of the Act by the assessing authority by following its earlier order which has been challenged before this Hon'ble High Court in ITA No. 684/2015 and also in ITA No.378/2015 even when the assessing authority has rightly made the addition by holding that the assessee company had acquired the subsidiary companies and for the purpose of acquisition, had borrowed funds by issue of GDRs and FCCBs and as the condition stipulated in section 35-D were not satisfied ?" NC: 2024:KHC:17601-DBITA No. 179 of 2022C/W ITA No. 180 of 2022 2. "Whether on the facts and in the circumstances of the case, the Tribunal is right in allowing relief to assessee by relying on section 40(a)(ia) of the which relates to Revenue business expenditure and Circular No.37/16 whereas section 35D of the Act in the instant case is in respect of capital employed -capital expenditure and cannot be taken as profits from business for the purpose of calculation of deduction under section 10A of the Act"?.” 2. The first question has been answered against the Revenue by a Coordinate Bench decision in ITA No.684/2015 between PR. COMMISSIONER OF INCOME TAXVs. M/s SUBEX LTD., disposed off on 01.10.2021. Similarly, the second question is also no longer res integra in view of another decision of the very same Bench rendered in ITA No.389/2014 c/w ITA No.392/2014 between M/s COURSE5 INTELLIGENCE PVT. LTD., VS. THE INCOME TAX OFFICER, disposed off on 01.09.2023. There is unanimity at the Bar in this and therefore much need not be done in the case at hand. NC: 2024:KHC:17601-DBITA No. 179 of 2022C/W ITA No. 180 of 2022 In light of the above, this appeal being unworthy of merit is liable to be and accordingly dismissed, costs having been made easy. Sd/- JUDGE Sd/- JUDGE Bsv List No.: 1 Sl No.: 34