Ita/138/2015 Of The Commissioner Of Income-Tax v. M/S. Quest Global Engineering Services Pvt. Ltd

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF FEBRUARY 27027 PRESENT| THE HON’BLE MR. JUSTICE ALOK ARADHE AND| THE HON’BLE MR. JUSTICE NATARAJ RANGASW AMYILT.A. NO.138 OF 2015 BETWEEN: 1.|THE COMMISSIONER OF INCOME-TAX C.R. BUILDING, QUEENS ROAD BANGALORE. 2.|THE DEPUTY COMMISSIONER OF INCOME-TAX. CIRCLE-12(2), RASHTROTHANA BHAVAN NRUPATHUNGA ROAD BANGALORE-56000 1. _... APPELLANTS (BY MR. K.V. ARAVIND, ADV.,) AND" M/S. QUEST GLOBAL ENGINEERINGSERVICES PVT. LITD.,SECOND FLOOR, PRIMOSE 7B|EMBASSEY TECH VILLAGESARJIAPURA-MARATHAHALLI OUTER RING ROADDEVARABEESANA HALLIVARTHUR HOBLI, BANGALORE-560103. (BY MR. CHYTHANYA K.K. ADV.,) ~. RESPONDENT THIS I.T.A. IS FILED UNDER SEC. J6O0-A OF INCOME TAXACT 1961, ARISING OUT OF ORDER DATED 14.11.2014 PASSEDIN ITA NO.257/BANG/2014 FOR THE ASSESSMENT YEAR 2009-10,PRAYING TQ: | (1) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW,STATED ABOVE. (ii) ALLOW THE APPEAL AND SET ASIDE THE ORDER.PASSED BY THE ITAT, BANGALORE IN ITA NO.257/BANG/2014DATED 14.11.201L4 AND CONFIRM THE ORDER OF THE APPELLATECOMMISSIONER CONFIRMING THE ORDER PASSED BY THE.DEPUTY.COMMISSIONEROF.INCOME|TAX,|CIRCLE-12(2),BANGALORE. THIS ILT.A. COMING ON FOR’ HEARING, THIS DAY, | ALOK ARADHE J.,DELIVERED THE FOLLOWING: | JUDGMENT This appeal under Section 260-A of the Income TaxAct, 1961 (hereinafter referred to as ‘the Act’, for short) has|been filed by the revenue. The subject matter of the appealpertains to the Assessment Year 2009-10. The appeal wasadmitted by a Bencn of this Court vide order dated|19.02.2016 on the following substantial questions of law: “1. Whether on tne facts and In the|circumstances of the case, the Tribunal Isrignt in law in deleting tne disallowances madeDy assessing officer on provision of loss on|derivative contracts witnout appreciating that|the provision for loss cannot be allowed whenthe actual sales had not even taken place andmaturity date of the derivatives contracts has|not arisen and tne notional loss or notionad|income and deduction of liabilities which are| Unascertained does not come witnin § thpurview of the I.T. Act?" 72. Whether on the facts and in thecircumstances of tne case, the Tribunal Isrignt in law in deleting the addition made by|assessing authority under section 14A read|with Rule 8D without appreciating the Board'sCircular No.5 of 2014 dated 11/2/2014 andthe provision of section 14A read with rule 8Dof the [.T. Act?." "3 Whether on the facts and In thecircumstances of the case, the Tribunal Isright in law in allowing carry forward of loss|on derivatives contracts without appreciating|that the transaction was speculative in naturein terms of Board's Circular No.3/2010 and|section 73 does not allow setting off ofspeculation loss against any otner income|otner than speculation income?.. 2. For tne reasons assigned by us in the judgmentpassed today in I.T.A.No.133/2013, the substantial questionsof law are answered against the revenue and in favour of theaSS@CSSACC, ���������������"���������!���������������������������������������!������������������������������ ����������������������� $%�&&�