Ita/36/2023 Of The Pr. Commissioner Of Income Tax v. M/S. Kontoor Brands India Pvt. Ltd

Digitallysigned byBHARATHI SLocation:HIGH COURTOFKARNATAKA ITA No. 36 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. 36 OF 2023 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX KORMANGALA, BANGALORE. KORMANGALA, BANGALORE. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-4(1)(1), BANGALORE. CIRCLE-4(1)(1), BANGALORE. …APPELLANTS (BY SRI. SANMATHI E I.,ADVOCATE) AND: M/S. KONTOOR BRANDS INDIA PVT. LTD., (FORMERLY VF BRANDS INDIA PVT. LTD.,) BAGMANE LAUREL , BLOCK B, LEVEL 9, 8TH FLOOR, BAGMANE TECH PARK C.V. RAMAN NAGAR, BANGALORE-560 093. …RESPONDENT (BY SRI. NAGESHWAR RAO D. D., ADVOCATE (THROUGH V/C)) THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HONBLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 23/9/21 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, BANGALORE, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEES CASE, IN APPEAL - 2 - PROCEEDINGS IN IT(TP)A NO. 1285/BANG/2017 FOR A.Y. 2012-2013 (ANNEXURE-A) AND GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE AND ETC. THIS APPEAL, COMING ON FOR ADMISSION, 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. Snmathi. E.I., for appellants/Revenue and learned counsel Sri. Nageshwar Rao. D.D., 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 23.09.2021 passed by the Income Tax Appellate Tribunal, ‘c’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A No.1285/Bang/2017 for the assessment year 2012-13, raising the following substantial questions of law: - 3 - NC: 2024:KHC:41543-DBITA No. 36 of 2023 “1. Whether on the present facts and circumstances of the case, the Tribunal is correct in law in holding that depreciation on design and technical knowhow, is allowable under section 32(1)(ii) of he Act in view of explanation 4 to Section 32 of the Act when assessee has not been able to demonstrate that it has acquired any technical knowhow or the same has been put to use by the assessee? circumstances of the case, the Tribunal is correct in law in holding that depreciation on design and technical knowhow, is allowable under section 32(1)(ii) of he Act in view of explanation 4 to Section 32 of the Act when assessee has not been able to demonstrate that it has acquired any technical knowhow or the same has been put to use by the assessee? 2. Whether in the present facts and circumstances of the case, the order passed by Tribunal can be said as perverse in law in allowing claim of depreciation on design and technical knowhow ignoring that the same does not fall under ‘Any other business or commercial rights of the similar nature’ stipulated under Section 32(1)(ii) of the Act read with Explanation 4 to Section 32 ?” circumstances of the case, the order passed by Tribunal can be said as perverse in law in allowing claim of depreciation on design and technical knowhow ignoring that the same does not fall under ‘Any other business or commercial rights of the similar nature’ stipulated under Section 32(1)(ii) of the Act read with Explanation 4 to Section 32 ?” 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 - 4 - Taxes. It is also submitted that the aforesaid Circular binds the revenue. 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 - 4 - 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 Sd/- (C.M. POONACHA) JUDGE BS List No.: 4 Sl No.: 18