Rp/277/2021 Of Deputy Commissioner Of Income Tax v. Syndicate Bank

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5 DAY OF SEPTEMBER, 2022 :PRESENT: THE HON'BLE MRS. JUSTICE K.S.MUDAGAL AND THE HON'BLE MR. JUSTICE R. NATARAJ REVIEW PETITION No.277/2021 IN I.T.A. No.783/2018 BETWEEN: 1. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, UDUPI-576101. CIRCLE-1, UDUPI-576101. 2. COMMISSIONER OF INCOME TAX CENTRAL REVENUES BUILDING, MANGALORE-575001. CENTRAL REVENUES BUILDING, MANGALORE-575001. (BY SRI. E.I.SANMATHI, ADVOCATE ) ...PETITIONERS AND: SYNDICATE BANK HEAD OFFICE, MANIPAL-576104. REPRESENTED BY ITS GENERAL MANAGER MR. G. MOHAN RAO (BY SRI. TANMAYEE RAJKUMAR, ADVOCATE) …RESPONDENT THIS REVIEW PETITION IS FILED UNDER ORDER XLVII RULES 1 AND 2 READ WITH SECTION 114 OF CPC PRAYING TO REVIEW THE JUDGMENT DATED 18.06.2021 PASSED BY THIS HON'BLE COURT IN I.T.A. NO.783/2018. THIS REVIEW PETITION HAVING BEEN HEARD AND RESERVED ON 26.08.2022, COMING ON FOR ‘PRONOUNCEMENT OF ORDERS’ THIS DAY, R. NATARAJ. J.,MADE THE FOLLOWING: ORDER This review petition is filed by the Revenue seeking review of the judgment dated 18.06.2021 passed in I.T.A.No.783/2008 in so far as it relates to the substantial question of law No.2 framed by this Court, which is as follows:- "ii) Whether, on the facts of the circumstances of the case and on the grounds raised, the Tribunal was right in holding that the deduction computed at the rate of 7.5% of the total income ought to be computed after setting off of brought forward losses?" 2. This Court while answering the above question held that the Tribunal was right in holding that the deduction computed at the rate of 7.5% of the total income ought to be computed after setting off brought forward losses. However, in paragraph No.15 of the judgment, this Court held contrarily that the deduction at the rate of 7.5% of the total income should be computed "before setting off the loss brought forward". This Court held that the reasoning adopted in this regard by the Assessing Officer and the Commissioner of the Income Tax (Appeals) is "not" in accordance with the provisions of the Income Tax Act, 1961. Hence, this Court held the above question against the revenue and in favour of the assessee and consequently, allowed the appeal in part and answered the substantial question of law No.2 against the revenue and in favour of the appellant - assessee. 3. It is now well settled that the deduction towards bad and doubtful debts at 7.5% shall be made after setting off the brought forward loss, to arrive at the total income. Therefore, the finding recorded by this Court on substantial question of law No.2 is an error apparent on the face of the record and therefore, deserves to be reviewed. Hence, the substantial question of law No.2 in I.T.A.No.783/2018 is answered as follows:- "The Tribunal was justified in holding that the deduction at the rate of 7.5% of the total income should be computed after setting off the brought forward loss." PMR 4. Hence, the following ORDER The review petition is allowed. Consequently, the judgment dated 18.06.2021 passed by this Court in I.T.A.No.783/2018 is modified and the substantial question of law No.2 framed therein and extracted above, is answered in favour of the Revenue and against the assessee. Consequently, I.T.A.No.783/2018 is dismissed. Sd/- JUDGE Sd/- JUDGE