Ita/19/2023 Of The Pr. Commissioner Of Income Tax v. Xindia Steels Ltd

Digitallysigned by BLAVANYALocation:HIGHCOURT OFKARNATAKA NC: 2024:KHC:41831-DBITA No. 19 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30 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. 19 OF 2023 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX CENTRAL 3RD FLOOR, CENTRAL 3RD FLOOR, C R BUILDING, QUEENS ROAD, BENGALURU-560001 2. THE ASST COMMISSIONER OF INCOME TAX CIRCLE-1, CIRCLE-1, PRESENT ADDRESS DCIT CENTRAL CIRCLE, AAYAKAR BHAVAN, STAFF ROAD FORT BALLARI-583102 CENTRAL CIRCLE, AAYAKAR BHAVAN, STAFF ROAD FORT BALLARI-583102 …APPELLANTS (BY SRI. M DILIP .,ADVOCATE A/W SRI. RAVIRAJ Y V, ADVOCATE) AND: XINDIA STEELS LTD. , KUNIKERE AND HIREBAGINAL VILLAGE, GINIGERA, KOPPAL TQ AND DIST PAN …RESPONDENT (BY SRI. S PARTHASARATHI.,ADVOCATE) THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX - 2 - APPELLATE TRIBUNAL, BENGALURU IN ITA NO.361/BANG/2019 DATED 31.05.2022 FOR ASSESSMENT YEAR 2014-2015 ANNEXURE-C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE- 1, BELLARY AND ETC. THIS APPEAL, COMING ON FOR 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. Dilip. M., along with Sri. Raviraj. Y.V., for appellants/Revenue and learned counsel Sri. S. Parthasarathi., learned counsel for the 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 31.05.2022 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA No.361/Bang/2019 for the assessment year 2014-15, raising the following substantial questions of law: 3. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in deleting addition of `2,37,76,873/- made on account of disallowance of interest on borrowed funds ignoring that assessee was not able to establish with corroborative evidence that the funds advanced by the assessee to persons were exclusively for the purpose of business? Whether on the facts and in the circumstances of the case, the Tribunal was right in law in deleting addition of `70,52,9990/- made on account of disallowance of Corporate Social Responsibility expenses ignoring that as the assessee failed to substantiate that the expenditure incurred by the company has been expended for the purpose for which it has been claimed and the expenditure has been directly incurred by the Company? Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature in deleting the additions made by assessing authority ignoring the findings and materials brought on record by assessing authority which has been upheld by first appellate authority?” 3. 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. 4. 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. 5. In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned - 5 - 3. 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. 4. 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. 5. In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned - 5 - counsel for the revenue. However, the questions of law are kept open to be adjudicated in an appropriate proceeding. Sd/- (S.G.PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE BS List No.: 4 Sl No.: 28