Ita/116/2010 Of M/S Karnataka Instrade Corporation Ltd v. The Asst Commissioner Of Income Tax

1 IN THR HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THR OO[‘T]DAY OF OCTOBER 2015) PRESENT THR HON’BLEB MR.JUSTICEK VINBET SARA AN D THR HON’BLE MR.JUSTICE B MANOHAR. ITA No. 116 OF 2010 (IT) BBRITWREN M/s.Karnataka Instrade|Corporation Ltd..,Rep. by its Managing DirectorSri. M.R.Seetharam(formerly known as M/s.Karnataka|Minerals & Manutacturing Co Ltd.,) No.1, GEF Administrative Block,New BEL Road, MSRIT Post, Bangalore — 560004. ...Appellan (By Sri. A.Shankar & M.Lava Advs..,) AN): The Asst. Commissionerof Income-Tax,Central Circle-2(2),C.R.Building, Queens Road,Bangalore — 560001. ...Responden (By Sri. K.V.Aravind & Sri. G.Kamaladhar, Advs..,) ? This ITA is filed U/S.260-A of I.T.Act, 1961 arisingOUToT|Orderdated20-11-2009.passedInITANo.856/BNG/2009 and MP No.6/Bng/2010 dated10/2/2010, for the Assessment Year 2004-05, prayingthat this Hon’ble Court may be pleased to: 1.Formulate the substantial questions of lawstated therein,stated therein, 11.Allow the appeal and set aside the order|passed by the ITAT Bangalore in ITANo.856/BNG/2009 and MP No.6/Bng/2010—dated 10-02-2010, dated 20-11-2009, in theinterest of justice and equity.passed by the ITAT Bangalore in ITANo.856/BNG/2009 and MP No.6/Bng/2010—dated 10-02-2010, dated 20-11-2009, in theinterest of justice and equity. This Appeal is coming on for hearing and reservedfor orders on08/09/2015, this dayB.MANOHAR J,pronounced the following: JUDGMENT The assessee preferred this appeal under Section260-A of the Income Tax Act, 1961 (hereinafter referredTo as!‘the Act’‘for short) being aggrieved by the orderdated 20-11-2009 made in ITA No.856/Bang/2008 andthe order dated 10-02-2010 made in Misc. Petition|No.6/Bang/2010 passed by the Income Tax Appellate 3 Tribunal (hereinaiter referred to as °the Tribunal* for|short) for the assessment year 2004-05. OoThe assessee is a public limited company,manufacturing cement in the factory situated atMathodu village, Hosadurga Taluk. The assessee filedreturn of income on 31-3-2004, declaring an income ofRs.2,98,12,218/-.aittersettingoftunabsorbed|depreciationOT earlierYCalrsCO allexTent|OT Rs.3,39,62,012/-. The return was accompanied withthe computation of total income, balance sheet, profitand loss account and relevant schedule. However, theAssessing Officer disallowed a sum of Rs.2,23,52,396/-.towards inventories written off, as the assessee did notcarry on any business during the assessment year2003-04 and also disallowed various expenditure.Being aggrieved by the same, the assessee preferred anappeal before the Commissioner of Income Tax (Appeals)(hereinafter referred to as ‘theFirstAppellateAuthority’'for short). The First Appellate Authority partly allowed the appeal by allowing the expenditure ofRs.20,45,323/-. Being aggrieved by the order passed bythe First Appellate Authority, the assessee preferred anappeal before the Tribunal. The Tribunal without goinginto the merits of the matter, relying upon the ordermade for the assessment year 2000-01 in ITANo.378/Bang/2006 dated 19-09-2008 dismissed theappeal, by its order dated 20-11-2009. Subsequentlythe assessee filed Misc.Petition No.6/Bang/2010 forrectification of the order dated 20-11-2009 invokingsection 294(2) of the Act. The said Misc. Petition wasalso dismissed relying upon the order made for theassessment year 2002-03 in ITA No.855/Bang/2008—dated 6-2-2009 without going into the merits of thecase. Being aggrieved by these two orders, the assesseepreferred this appeal. 3.|This appeal was admitted on 22-04-2010 on thefollowing substantial questions of law: 5 (i) Whether the Tribunal was justified innot allowing deduction under the Income Tax)Act in respect of the write off of inventories ofRs.2,23,52,396/ -? (i) Whether the Tribunal was justified inlaw in not passing the reasoned order in)respect of claim of the appellant on the facts|and circumstances of the case? 3.|This appeal was admitted on 22-04-2010 on thefollowing substantial questions of law: 5 (i) Whether the Tribunal was justified innot allowing deduction under the Income Tax)Act in respect of the write off of inventories ofRs.2,23,52,396/ -? (i) Whether the Tribunal was justified inlaw in not passing the reasoned order in)respect of claim of the appellant on the facts|and circumstances of the case? 4since the appeal filed by the assessee for theassessment year 2002-03 on which reliance was placedwas partly allowed by giving certain benefits to theassessee, the order passed by the Tribunal dismissingthe appeal and the Miscellaneous petition filed by theassessee, relying upon the order made for theassessment year 2002-03 is not sustainable. Hence,the Tribunal is directed to reconsider the matter afresh|for the assessment year 2004-05, in the light of theorder made in ITA No.859/Bang/2008, in accordancewith law. 6 5Accordingly, without answering the substantialquestions of law, this appeal is allowed and remandedto the Tribunal for considering the matter afresh, inaccordance with law. Sd/-JUDGE Sd/-JUDGE _* | mp