Ita/456/2013 Of Commissioner Of Income Tax v. Shri C V Madhusudhan Reddy

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27 DAY OF FEBRUARY 2071. PRESENT| THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’‘’BLE MR. JUSTICE NATARAJ RANGASW A BETWEEN: ILT.A. NO.456 OF 2013 COMMISSIONER OF INCOME-TAXBANGALORE-III, C.R. BUILDINGSQUEENS ROAD, BANGALORE. (BY SRI. E.R. INDRAKUMAR, SR. COUNSEL A/WSRI. E.I. SANMATHI, ADV.,) — APPELLANT. AND* SRI. C.V. MADHUSUDHAN REDDY|No.502, CMH ROAD, INDIRANAGARBANGALORE-560038. .., RESPONDENT (BY SRI. ASHOK A. KULKARNI, ADV.)| THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX|ACT 1961, ARISING OUT OF ORDER DATED 12.04.2013 PASSEDIN ITA NO.574/BANG/2012, PRAYING TO: (i) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW,STATED THEREIN. | (ii) SET ASIDE THE APPELLATE ORDER OF THE ITAT A.BENCH,|BANGALOREIN|TTA!NO.574/BANG/2012|DATED12.4.2013, AS SOUGHT FOR IN THIS APPEAL. THIS I.T.A. COMING ON FOR’ HEARING, THIS’ DAY, |ALOK ARADHE J.,DELIVERED THE FOLLOWING: | JUDGMENT This appeal under Section 260A of the Income TaxAct, 1961 (hereinafter referred to as the Act for short)nas been preferred by the revenue. The subject matterof the appeal pertains to the Assessment year 2007-08.The appeal was admitted by a bench of this Court videorder dated 24.09.2013 on the following substantialquestions of law:| “(D)Whether the Tribunal was Justifiedin law in placing reliance on its own order.whereintheHon'bleTribunaldidnotrecognized the colourabie device employed by.the assessee as envisaged by the Honble-Supreme Court in the case of McDowell & Co.Ltd., (154 ITR 148) which resulted in massive|tax evasion in the guise of tax planning laced|with multi layered transactions?’. “(IWhnetner tne Tribunal was Justifiedin law in placing on its own order wherein tne.Hon'ble Tribunal has not considered the factthat the shares belonging to the assessee were|ultimately transferred to Godrej Group as a) part of sale of business of the Nutrine Group toGodgre] Group, routed through a series of.transactions including the reconstitution of thedefunt firm M/s. B.V. Reddy Enterprises to.accommodate the shareholders of M/s. NutrineConfectionery Co. (P) Ltd and gulising thenumerous transactions as genuine in quickspan of time, with a sheer motive of avoidanceof payment of actual capital gain?’.| “(CHD)”Whether the Tribunal was Justifiedin law in placing reliance on its own orderwherein it is held that the entire series oftransactions by which the shares of M/s.|Nutrine Confectionery Co P Ltd were ultimately|transferred to M/s. Godrej] Beverage and Foodsltd were all valid and such a course was.permitted and within the frame work of law.and that the transaction was not colourable or=dubious device or subterfuge and were legaland valid without completely appreciating the|complete thought process and motive behindthe series of transactions entered into by the.assessee and family members?", 4 2 |For the reasons assigned by us in thejudgmentpassed|today|InI.T.A.No.291/13,.thesubstantial question of law framed by a bench of this.court is answered against the revenue and in favour ofthe assessee. In the result, we do not find any merit in.this appeal, the same fails and is hereby dismissed. Sd/-—JUDGE. SS| Sd/-—JUDGE.