Karnataka High Court
The Pr Commissioner Of Income Tax vs M/S Bhoruka Power Corporation Ltd on 24 January, 2023
Author: P.S.Dinesh Kumar
Bench: P.S.Dinesh Kumar
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ITA No. 56 of 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.56 OF 2020
BETWEEN:
Digitally signed by 1. THE PR. COMMISSIONER OF INCOME-TAX
YASHODHA N
CIT(A), CENTRAL CIRCLE
Location: HIGH
COURT OF C.R.BUILDING, QUEEN'S ROAD
KARNATAKA 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
LAVELLA ROAD, ST.MARKS ROAD
BENGALURU-560 001 ...RESPONDENT
(BY SHRI. BALARAM R. RAO, ADVOCATE)
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.1227/BANG/2018, FOR THE ASSESSMENT YEAR
2013-2014 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF
LAW STATED THEREIN AND ALLOW THE APPEAL AND SET ASIDE THE
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ITA No. 56 of 2020
ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL,
BENGALURU IN ITA NO. 1227/BANG/2018 DATED 31.07.2019 FOR
ASSESSMENT YEAR 2013-2014 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 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.1227/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?
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?1
Income tax Appellate Tribunal, Bengaluru Bench -3- ITA No. 56 of 2020
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 Vs. Subhash Kabini Power Corporation Ltd,3 holding the questions of law in assessee's favour.
2 ITA No.133/2015 DD 15.02.2021 3 [2016] 69 taxmann.com 394 (KAR) -4- ITA No. 56 of 2020
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.: 77