Ita/158/2020 Of Principal Commissioner Of Income Tax - 6 v. M/S Spa Builders

Digitally signedbyMARIGANGAIAHPREMAKUMARILocation: HIGHCOURT OFKARNATAKA NC: 2024:KHC:39699-DB ITA No. 158 of 2020 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24 DAY OF SEPTEMBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO. 158 OF 2020 BETWEEN: 1. PRINCIPAL COMMISSIONER OF INCOME TAX–6 BMTC COMLPLEX KORAMANGALA BENGALURU 2. INCOME TAX OFFICER WARD-6(1)(3) BMTC COMLPLEX KORAMANGALA, BENGALURU …APPELLANTS (BY SRI.SANMATHI.E.I., ADVOCATE) AND: 1. M/S SPA BUILDERS PVT. LTD., SAROJ SQUARE, 3 FLOOR AIRPORT VARTHUR ROAD, BEFORE KUNDANAHALLI CIRCLE MARATHAAHLLI BANGLAORE-560037 PAN AACCSO377B …RESPONDENT (BY SMT.SHEETAL., ADVOCATE) THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 06/12/2019 - 2 - NC: 2024:KHC:39699-DBITA No. 158 of 2020 PASSED IN ITA NO.2051/BANG/2019, FOR THE ASSESSMENT YEAR 2013-2014, PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT; SET ASIDE THE APPELLATE ORDER DATED 06/12/2019 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, BENGALURU, IN APPEAL PROCEEDINGS NO. ITA NO.2051/BANG/2019 FOR THE ASSESSMENT YEAR 2013-2014 AS SOUGHT FOR IN THIS APPEAL. THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.G.PANDIT AND HON'BLE MR JUSTICE C.M. POONACHA ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT) Heard the learned counsel Sri.Sanmathi.E.I., for appellants/Revenue and learned counsel Smt.Sheetal for respondent/assessee. 2. The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated - 3 - NC: 2024:KHC:39699-DBITA No. 158 of 2020 06.12.2019 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.2051/Bang/2019 for the assessment year 2013-14. 3. This Court, admitted the appeal on 04.11.2020 to consider the following substantial questions of law: “1. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal is justified in holding that land sold by assessee is agricultural land ignoring the materials on record which established that intention of the assessee was to procure land to convert the same in into residential plots for selling? 2. Whether on the facts and circumstances of the case, the order passed by the Income Tax Appellate Tribunal can be said as perverse in nature as the Tribunal has held that profit from sale of land cannot be held as capital gain without considering the conduct and intention of the assessee which established that assessee was doing adventure in nature of trade? 3. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal is justified in holding that assessing authority was not right in treating profit from sale land as business income when the assessee was in the business of real estate, property development and construction?” 4. Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue. 5. On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024. 6. In view of the aforesaid submissions, the appeal 4. Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue. 5. On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024. 6. In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the question of law is kept open to be adjudicated in an appropriate proceeding. Sd/- (S.G.PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE MPK List No.: 2 Sl No.: 13