The Hon’/Ble Mr. Justice v. Srishananda

IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 4 DAY OF JANUARY 2071 PRESENT| THE HON’BLE MR. JUSTICE ALOK ARADHE AND| THE HON’/BLE MR. JUSTICE V. SRISHANANDA BETWEEN: LT.A.§NOCO.452 OF 201 M/S. MANYATA PROMOTERS PVT. LTD.CLASSIC COURT, 1ST FLOOR9/1, RICHMOND ROADBANGALORE - 560 025.(REPRESENTED BY ITS DIRECTORPR RAMAKRISHNANAGED ABOUT 62 YEARS.S/O SRI. P.V. RAJAGOPALAN ). (BY MRS. SUSHMA RAVINDRA, ADV., FOR |MR. K.K. CHYTHANYA, ADV.,) — APPELLANT. AND" THE DEPUTY COMMISSIONER OF INCOME-TAX.CENTRAL CIRCLE - 2(2).C.R. BUILDINGS, QUEENS ROADBANGALORE - 560 OOQO1(BY MR. K.V. ARAVIND, ADV.) .., RESPONDENT THIS ITA IS FILED UNDER SECTION 260-A OF I.T. ACT,|1961L ARISING OUT OF ORDER DATED 13.06.2014 PASSED IN ITANO.1616/BANG/2012 FOR THE ASSESSMENT YEAR 2009-10,PRAYING TQ: (I) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW.STATED ABOVE. (11) ALLOW THE APPEAL AND SET ASIDE THE IMPUGNED|ORDER (TO THE EXTENT PREJUDICIAL) OF THE INCOME TAX.APPELLATE TRIBUNAL BEARING ITA NOS.1616/BANG/2012 DATED.13.06.2014 FOR THE ASSESSMENT YEAR 2009-1Q0. THIS|ITACOMING|ONFOR.HEARING,THISALOK ARADHE J.,DELIVERED THE FOLLOWING: | DAY, | JUDGMENT This appeal under Section 260A of the Income TaxAct, 1961 (nereinafter referred to as the Act for short)nas been preferred by the assessee. The subject matterof the appeal pertains to the Assessment year 2009-10.The appeal was admitted by a bench of this Court videorder dated 31.03.2015 on the following substantialquestions of law:| (i) Whetner on tne facts and in the)circumstances of the case, the HonourableITAT, Bangalore Bencn ts right in law in|upholding applicability of Section 14A _ r.wRule 8D in a case where the book profits shallbe deemed to be total income as per Section 115JB(2)? (il)Whether on the facts and in thecircumstances of the case, the Honourable ITAT, Bangalore Bencn ts right in law in|upholding invocation of Section 14A r.w. Rule8D for the purpose of Explanation (f) below.Section115JB(2)whilecomputingbookprofits? (111)Whether on the facts and in thecircumstances of the case, the HonourableITAT, Bangalore Bench, Justified in law in|upholding the disallowance under Section 14Ar.w. Rule 8D when the conditions for invokingSection 14A read with Rule 8D did not exist [n the instant case? (iv)Whether on the facts and in thecircumstances of the case, the HonourableITAT, Bangalore Bench Justified in law in.upholding invocation of Section 14A r.w. Rule8D when the owned funds far exceeded thefunds invested in exempt securities? (Vv)Whether on the facts and In the.circumstances of the case, the HonourableITAT, Bangalore Bench Justified in law in.upholding invocation of Section 14A r.w. Rule8D even when the disallowance exceeded the| exempt income? (Vi)Whetner on the facts and in thecircumstances of the case, Honourable ITAT,Bangalore Bench Justified in law in upholding|Invocation of Section 14A r.w. Rule 8D even)when no exempt income was earned? 2 |For the reasons assigned by us in the.judgment passed today in I.T.A.No.203/2015, the|substantial questions of law framed by a bench of this.court are answered in favour of the assessee and-against the revenue. The order passed by the tribunal|dated 13.06.2014 insofar as it pertains to the findings|recorded against tne assessee is hereby quashed. | In the result, the appeal is allowed. Sd/-JUDGE. Sd/-—JUDGE.