Ita/520/2022 Of The Pr Commissioner Of Income Tax v. M/S Spr Spirits Pvt Ltd

Digitallysigned by BLAVANYALocation:HIGHCOURT OFKARNATAKA IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 1 DAY OF OCTOBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO. 520 OF 2022 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE C.R. BUILDING QUEEN'S ROAD BENGALURU-560 001 2. THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1(3), C.R. BUILDING QUEEN'S ROAD BENGALURU-560 001 …APPELLANTS (BY SRI. DILIP.M., ADVOCATE ALONG WITH SRI. RAVIRAJ Y V., ADVOCATE) AND: M/S. SPR SPIRITS PVT. LTD., (FORMERLY KNOWN AS SPR GROUP HOLDINGS PVT. LTD.,) 8 CROSS, - 2 - NC: 2024:KHC:41159-DB H.SIDDAIAH ROAD, WILSON GARDEN BENGALURU 560 027 PAN: AAECS 2377M …RESPONDENT (BY SRI. NARENDRA KUMAR J. JAIN, ADVOCATE) THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT, 1961, PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.1658/BANG/2018 DATED 25/07/2022 FOR ASSESSMENT YEAR 2008-2009 (ANNEXURE-C) AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(3), BENGALURU. THIS APPEAL IS 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. Dilip.M., along with Sri. Raviraj.Y.V., learned counsel for appellants/Revenue and Sri. Narendra Kumar.J.Jain, 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 27.05.2022 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short ‘Appellate Authority’) in ITA.No.1658/Bang/2018 for the assessment year 2008-09, raising the following substantial questions of law: 1. "Whether on the facts and in the circumstances of the case, the Tribunal is right in holding that the CIT(A) ought to have examined how the transactions were treated in the hands of M/s.Vinayaka Fruit Mandi, M/s.Venkateshwwara Bottle Traders and M/s.Srinivasa Bottle Traders? 2. "Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature in not considering the merits of the case by evaluating incriminating materials found during course of search which established that the entries pertaining to M/s.Vinayaka Fruit Mandi, M/s.Venkateshwwara Bottle Traders and M/s.Srinivasa Bottle Traders are bogus and were sham transactions"? 3. "Whether on the facts and in the circumstances of the case, the Tribunal is right in law in remanding the matter to file of CIT(A) for fresh consideration even though there was no requirement for remand and Tribunal being final fact finding authority could have considered the materials"? 4. "Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing CIT(A) to ascertain the treatment of transactions in the hands of M/s.Vinayaka Fruit Mandi, M/s. Venkateshwwara Bottle Traders and M/s.Srinivasa Bottle Traders when the entries themselves were bogus"? 5. "Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that burden of proving the treatment of transaction in the hands of three entities is on Revenue when it was only assessee to demonstrate that book entries made therein are genuine "? - 5 - 4. "Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing CIT(A) to ascertain the treatment of transactions in the hands of M/s.Vinayaka Fruit Mandi, M/s. Venkateshwwara Bottle Traders and M/s.Srinivasa Bottle Traders when the entries themselves were bogus"? 5. "Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that burden of proving the treatment of transaction in the hands of three entities is on Revenue when it was only assessee to demonstrate that book entries made therein are genuine "? - 5 - 6. "Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature in holding that CIT(A) is not right in not examining how the transaction with three entities are treated ignoring the Tribunal can independently consider incriminating materials and statements recorded during course of search being fact finding authority and moreover when assessee had clearly admitted the purchases in the statement"? 7. " "Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature in not considering the fact that three entities were created for purpose of bogus transactions and Tribunal failed to appreciate the payments were made to the entities and withdrawn by way of self cheques which proves that the entities were bogus in nature"? 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 - 6 - 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 question of law is kept open to be adjudicated in an appropriate proceeding. Sd/- (S.G.PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE