Ita/259/2022 Of The Pr. Commissioner Of Income Tax v. M/S Amco Batteries Ltd

NC: 2024:KHC:39416-DB ITA No. 259 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23 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. 259 OF 2022 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX ROOM NO.403 WANAPARTHY BLOCK, 4TH FLOOR AAYAKAR BHAWAN, 121, NUNGAMBAKKAM HIGH ROAD CHENNAI – 34 2. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-11(1), PRESENT ADDRESS CORPORATE CIRCLE-1(1) ROOM NO.403, WANAPARTHY BLOCK, 4TH FLOOR, AAYAKAR BHAWAN 121 NUNGAMBAKKAM HIGH ROAD DigitallyCHENNAI - 34 signed byBHARATHI S…APPELLANTS Location:(BY SRI. RAVI RAJ Y V.,ADVOCATE A/W HIGH COURTOF SRI. DILIP M, ADVOCATE) KARNATAKA AND: M/S AMCO BATTERIES LTD 3RD FLOOR, UNITY BUILDING N R SQUARE BENGALURU - 560 002 AABCA 1726F (BY MISS. JINITHA CHATTERGEE, ADVOCATE FOR SRI. S PARTHASARATHI.,ADVOCATE) …RESPONDENT - 2 - THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 94/BANG/2013 DATED 03/12/2021 FOR ASSESSMENT YEAR 2004-2005 ANNEXURE-D AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-1(1), CHENNAI AND ETC. TO 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 Raviraj Y.V, along with learned counsel Sri Dilip M, for appellants/Revenue and learned counsel Miss Jinitha Chattergee appearing for learned counsel Sri Parthasarathi, 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 3.12.2021 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.94/Bang/2013 for the - 3 - assessment year 2004-05, raising the following substantial questions of law: “1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that assessee had given only permissive possession and as such there was no transfer as required under section 53A of the Transfer of Property Act read with Section 2(47) of the Act ignoring that assessee had agreed to sell its property near Hebbal Flyover at 25% in favour of the assessee and 72% in favour of Developer which falls under the purview of Section 53A of the Transfer of Property Act ? 2. Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in holding that there is no transfer ignoring the contents of Joint Development Agreement entered into by assessee and other related documents which established that assessee had extinguished his share in overall property and had received consideration in the form of undivided share in property to an extent of 28%? 3. Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature in not appreciating that conditions set out Section 2(47) of the Act were fully satisfied in case of assessee and as such assessee was liable to pay capital gain on entering into Joint Development Agreement with Developer?” 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. 3. Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature in not appreciating that conditions set out Section 2(47) of the Act were fully satisfied in case of assessee and as such assessee was liable to pay capital gain on entering into Joint Development Agreement with Developer?” 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 counsel for the revenue. However, the questions of law are kept open to be adjudicated in an appropriate proceeding. Sd/- (S.G.PANDIT) JUDGE ND List No.: 3 Sl No.: 0 Sd/- (C.M. POONACHA) JUDGE