Ita/560/2023 Of The Pr. Commissioner Of Income Tax v. M/S. Palmer Investment Group Ltd

Digitally signedbyMARIGANGAIAHPREMAKUMARILocation: HIGHCOURT OFKARNATAKA NC: 2024:KHC:39697-DBITA No. 560 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24 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. 560 OF 2023 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION, BANGALORE. INTERNATIONAL TAXATION, BANGALORE. 2. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2(1), BANGALORE. CIRCLE 2(1), BANGALORE. …APPELLANTS (BY SRI. SANMATHI E. I., ADV.) AND: M/S. PALMER INVESTMENT GROUP LTD., (ERSTWHILE M/S. UB SPORTS MANAGEMENT OVERSEAS LTD., UB TOWERS, NO.24, VITTAL MALLAYA ROAD, BANGALORE-560 001. PAN: . …RESPONDENT (BY SMT. TANMAYEE RAJKUMAR, ADV.) THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 24/02/2023 PASSED IN IT(TP)A NO.2930/BANG/2018, FOR THE ASSESSMENT YEAR 2014-2015, PRAYING TO DECIDE THE - 2 - FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 24/02/2023 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH, BENGALURU, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEE’S CASE, IN APPEAL PROCEEDINGS IN IT(TP)A NO.2930/BANG/2018 FOR A.Y.2014-2015 AND GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE. THIS APPEAL, COMING ON FOR ORDERS, 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.Sanmathi.E.I., for appellants/Revenue and learned counsel Smt.Tanmayee Rajkumar for 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 - NC: 2024:KHC:39697-DBITA No. 560 of 2023 24.02.2023 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.2930/Bang/2018 for the assessment year 2014-15, raising the following substantial questions of law: “1. Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in nature in holding that tax applicable to non-residents on Long Term Capital Gains is 10% as against 20% held by assessing authority as per combined reading of proviso’s to Section 112(1)(C)(ii) of the Act? 2. Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in not appreciating that assessing authority rightly held that lower tax rate is not applicable to non-residents as they are taking the benefit under first proviso to Section 48 of the Act? 3. Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse appreciate that since as per proviso to Section 112(1)(c) read with second proviso to Section 48, the lower rate of tax is provided for taxing the capital gains without providing the benefit of cost of inflation index, in the other words, the gross sale consideration is treated as Long Term Capital Gain and as for as on non-residents are concerned, as they take benefit under first proviso to Section 48 and second proviso to Section 48 being not applicable to non-residents, lower rate of tax cannot be applied to non-residents?” 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. benefit of cost of inflation index, in the other words, the gross sale consideration is treated as Long Term Capital Gain and as for as on non-residents are concerned, as they take benefit under first proviso to Section 48 and second proviso to Section 48 being not applicable to non-residents, lower rate of tax cannot be applied to non-residents?” 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 question of law is kept open to be adjudicated in an appropriate proceeding. Sd/- (S.G.PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE MPK CT:bms List No.: 2 Sl No.: 9