Karnataka High Court
The Pr Commissioner Of vs M/S Bhoruka Power on 24 January, 2023
Author: P.S.Dinesh Kumar
Bench: P.S.Dinesh Kumar
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ITA No. 58/2020
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF JANUARY, 2023
PRESENT
THE HON'BLE MR JUSTICE P.S.DINESH KUMAR
AND
THE HON'BLE MR JUSTICE G BASAVARAJA
INCOME TAX APPEAL NO. 58 OF 2020
BETWEEN:
Digitally signed
by YASHODHA N 1. THE PR COMMISSIONER OF
Location: HIGH INCOME-TAX, CIT (A)
COURT OF CENTRAL CIRCLE
KARNATAKA C R BUILDING, QUEEN'S ROAD
BENGALURU-560 001
2. THE DY. COMMISSIONER OF
INCOME-TAX, CIRCLE 1(1)(2)
PRESENT ADDRESS
CENTRAL CIRCLE
C.R BUILDING, QUEENS ROAD
BENGALURU-560 001 ...APPELLANTS
(BY SHRI. M. DILIP, STANDING COUNSEL FOR
SHRI. K.V. ARAVIND, SENIOR STANDING COUNSEL)
AND:
M/S BHORUKA POWER
CORPORATION LTD
NO.48, HITANADA BUILDING
LAVELLE ROAD
ST. MARKS ROAD
BENGALURU-560 001 ...RESPONDENT
(BY SHRI. BALARAM R. RAO, ADVOCATE)
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ITA No. 58/2020
THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT
1961, ARISING OUT OF ORDER DATED: 31/07/2019 PASSED IN
ITA NO.1225/BANG/2018, FOR THE ASSESSMENT YEAR 2011-
2012, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS
OF LAW STATED THEREIN AND ALLOW THE APPEAL, SET ASIDE
THE ORDERS PASSED BY THE INCOME TAX APPELLATE
TRIBUNAL, BENGALURU IN ITA NO.1225/BANG/2018 DATED:
31/07/2019 FOR ASSESSMENT YEAR 2011-2012 ANNEXURE-C
CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER
AND CONFIRM THE ORDER PASSED BY THE DEPUTY
COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(1),
BENGALURU AND ETC.
THIS ITA, COMING ON FOR FINAL HEARING, THIS DAY,
P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING:
JUDGMENT
This appeal by the Revenue challenging the order dated 31.07.2019 in ITA No.1225/Bang/2018 passed by the ITAT1, "B" Bench, Bangalore, has been admitted to consider following questions of law:
1. Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in restricting the disallowance to the exempt income earned even though the assessing authority rightly disallowed under section 14A R/W Rule 8D as all the conditions were fully satisfied in the case of assessee?1
Income tax Appellate Tribunal, Bengaluru Bench -3- ITA No. 58/2020
2. Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that receipt of carbon credit was capital in nature when both the assessee and Revenue had recognized it as Revenue in nature?
3. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside disallowance made under section 80IA of the Act in respect of consideration from sale of carbon credit even though the same is not derived from the core activity of generation of power and consideration is a Revenue receipt which cannot be attributed towards profit derived from eligible business activity?
2. Heard Shri M.Dilip, learned Standing Counsel for the appellants-Revenue and Shri Balaram R.Rao, learned Advocate for the respondent-Assessee.
3. At the outset, Shri Balaram Rao submits that first issue involved in this appeal is covered by the decision of this Court in The Commissioner of Income Tax & another Vs. M/s Quest Global Engineering Services Pvt. Ltd.2 and second and third issues in Commissioner of Income Tax-III 2 ITA No.133/2015 DD 15.02.2021 -4- ITA No. 58/2020 Vs. Subhash Kabini Power Corporation Ltd.3 holding the questions of law in assessee's favour.
4. The said submission is not disputed by Shri Dilip, in his usual fairness.
5. In view of the above, the following:
(i) Appeal is dismissed; (ii) The substantial questions of law are answered in
favour of the Assessee and against the Revenue.
No costs.
Sd/-
JUDGE Sd/-
JUDGE YN List No.: 1 Sl No.: 79 3 [2016] 69 taxmann.com 394(KAR)