Karnataka High Court
The Commissioner Of Income Tax vs M/S Bagmane Developers Pvt Ltd on 20 March, 2015
Bench: Vineet Saran, S.Sujatha
1
IN THE HIGH COURT OF KARNATAKA AT
BENGALURU
DATED THIS THE 20TH DAY OF MARCH 2015
PRESENT
THE HON'BLE MR.JUSTICE VINEET SARAN
AND
THE HON'BLE MRS.JUSTICE S SUJATHA
ITA NO.293 OF 2014
BETWEEN
1. THE COMMISSIONER OF INCOME TAX
C R BUILDING
QUEENS ROAD
BANGALORE
2. THE DEPUTY COMMISSIONER OF INCOME TAX
CIRCLE-11(2)
RASHTROTHANA BHAVAN
NRUPATHUNGA ROAD
BANGALORE ...APPELLANTS
(BY SRI. K V ARAVIND, ADV., )
AND
M/S BAGMANE DEVELOPERS PVT LTD
LAKEVIEW BUILDING
NO.66/1-4
A-BLOCK, 8TH FLOOR
BAGMANE TECH PARK
CV RAMAN NAGAR
BANGALORE 560 093.
... RESPONDENT
2
THIS ITA IS FILED UNDER SEC.260-A OF
INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED:07/02/2014 PASSED IN ITA
NO.1517/BANG/2013, FOR THE ASSESSMENT YEAR
2009-2010 PRAYING TO:
I. FORMULATE THE SUBSTANTIAL QUESTIONS
OF LAW STATED ABOVE.
II. ALLOW THE APPEAL AND SET ASIDE THE
ORDER PASSED BY THE ITAT, BANGALORE IN ITA
NO.1517/BANG/2013 DATED:07/02/2014 AND
CONFIRM THE ORDER OF THE APPELLATE
COMMISSIONER CONFIRMING THE ORDER PASSED
BY THE DEPUTY COMMISSIONER OF INCOME TAX,
CIRCLE-11(2), BANGALORE.
THIS APPEAL COMING ON FOR ADMISSION
THIS DAY, VINEET SARAN J., DELIVERED THE
FOLLOWING:
JUDGMENT
The revenue has preferred this appeal against the order passed by the tribunal. The substantial questions of law that is raised in this appeal are as under:
"Whether in the facts and circumstances of the case, the Tribunal is justified in law in holding that the Commissioner of income tax was justified in deleting the aforesaid additions of Rs.10,92,61,900/- and Rs.16,42,32,367/- for A.Y.2009-10 and 2010-11 respectively on the ground that the advances made to its related parties were for the purposes of purchase and conversion of agricultural lands without appreciating that no agricultural land were purchased by the related parties on behalf of the assessee 3 company and as such there was no evidence that these advances were for business purposes?"
ii. "Whether in the facts and circumstances of the case, the Tribunal is justified in law in holding that in substance the Commissioner of Income Tax was not justified in confirming the disallowance was of interest of Rs.10,92,61,900/- and Rs.16,42,32,367/- for A.Y.2009-10 and 2010-11 respectively without appreciating the decisions of the Kerala High court in the cases of Commissioner of Income tax versus Mangalam Publications and Services India private limited reported in 2010 Vol. 324 ITR page 316 and Commissioner of Income Tax versus Harrison's Malayalam Ltd reported in Vol 25 taxman. com page 546 (2012) relied on by the Commissioner of Income Tax"?
iii. "Whether in the facts and circumstances of the case, the Tribunal is justified in law in holding that the interest-free loans given to assessee sister concerns and others was a measure of commercial expediency by relying on its own petition in the assessee's own case on its own orders dated 7/11/2013 in 346 of 2012 and 1126 of 2011 for the A.Y.2007- 08 and 2008-09 respectively without appreciating that the orders dated 7/11/2013 have not become final"?
2. In fact, in the case of M/s Bagmane Constructions Pvt. Ltd. - the sister concern of the assessee, in a batch of appeals in ITA No.473/13 and 4 connected matters disposed off on 16.09.2014, this Court has held that the money given by M/s Bagmane Developers Pvt. Ltd to its sister concern for acquisition of land is for business purpose and has upheld the order of the tribunal.
3. In that view of the matter, this claim relating to interest on that advance is also not taxable and is an allowable expenditure. This is what the tribunal has held. Therefore, we do not see any merit in this appeal. No substantial question of law do arise for consideration in this appeal. Accordingly, appeal is dismissed.
Sd/-
JUDGE Sd/-
JUDGE JT/-