Karnataka High Court
The Commissioner Of Income Tax vs M/S Bharatiya Reserve Bank Note on 1 April, 2008
Bench: Deepak Verma, Anand Byrareddy
IN THE HIGH count? or KARNATAKA AT BMGALORE
DATED THIS THE 13? DAY or ~
PRESENT H %L V' "
T!-IE HoN'nLn: MR. JUSTICE
The Commissioner of '
Income-Tax,-._ H V _ _
Centr.2t.EM'Ci.*5iT3lc.
'
Quee:1s--:}_~2cyad, " '
~
'?l_'11e-_Dcpttwv-Commissioner of
Income
Circle 11'(--1),'g V
C.R.Bui1ding, ~--
' ' Q11ecns "Road,
" §_g_I€_GAAL0RE~.-----~ « .. APPELLANT3.
{ " Seshachala, Adv.)
Mi-.s__s. Bhamaiiya Reserve Bank
; Note Mugiran (P) Ltd.,
~ Corporate Oifice Nos,3 6:. 4,
., A'1"=--.S';tage, I Phase,
" Layout,
'Banncrghatta Roam,
V' __l3ANGALOR.E. .. nmsponnmrr.
in-_-Ir_-k_*_'it_'k_*
'ty
I.T'A -file:-I 111-1:191-v Qacf-inn ')fin,A 'I'-flwn Tfin -
I J.i.I.\a-LI. I..I»..I.J.\.l.\.«J. LIL; I.-LIJJ-4. dial-ill II .I. l..lJ.Lv l'1'n.'\;~'
1961 arising out of order dated 15.06.200'Z...'15aSs§:_d ITA
N'o.568/' BANG} 2006 for the assessment Year _:'-31362'-G3=--Di'a_Vi31g to
allow the appeal and set aside the order of income
Appellate Tribunal, Bangalore, in ITA No.568f- BANG] 20016 "dated
rinw "I"u\r Ani-
- I CC!' I I\rIu'
15.06.2007 and confirm the orde:r;of'the_Appe11ate._Commissioi;1er«.
confirming the order passed by»._th=j:'eI3ep11ty-. Corttteissiener "of -1
Inmme Tax, Central Circle --- 11(1), Bangalore:
!I\I_ 2.. ..-;_ ..
uus i.'i'.A. earning on ti2ifj";i*§<V.» i'§ee:r"' 'Jerma
J ., delivered the following: " " '
Heard Sr.i:.Vl\r1.,_V. S;esl"1ac1;1a1a"for_the agipellants.
26O--£1ofit1ieV1ncoti1eTaxafict, 1.961 ihereixiafter shall be referred to
in short as "the order dated 15.06.2007 passed by
the I11come"TaX' Appénaté Tribunal in ITA No.568f BANG] 2006 for
it 1' - tlieiiiiassessmenti$reaI*"2002-O3.
. ";"1"ter iiaviilg heard the iearned counsel for the appeliants
afiei'-gzierusal of the records, we are of the considered opinion
.. that 1 no substantial question of law arises in this appeal for
.---.._._]
1' gd»ete1'mi11atio11 of this Court.
er iuoe1'w:
The assessee __a wlicifllyij . cwned
subsidiary of R.'B.I. it is }engaged--. iii"-.t__.he,.f
1*\11n-inane n-F -r'\1~;1'\'l'1.1'\n f'I'I11"i'£;i")l'\'I.!"v in
uL|.aJ..I.I.I..-no U1. 1.I.l..l--Vl»J.l-I-I1-5 up ,_ \.--l.lA1l>a,.l¢a'-\_a_Ay J...l. U33, \
which are ultimately s"uppli.ed~.: 'R.B.I.
During the releifaizi previdusilyear, the
assessee ' four Hlnachines
known as F'anurnai°111ac1:ii:*affesV'"rfsr installation
at' its .'MysDre xmachines were
P
r__.
1.1|:
0- ac:
CI fir .
1.' ~ R.s.1'?'i:1.'94-.i.V}ai§li's'"was; extensively damaged transit. The said damage was ' edetecteds at--Jciiénnai Port and the machine
-.was _sent--._bac'Vk to the supplier for its repair.
"'1"'h"e~ .snpp.iier found that the machine was The said machine was also insured. n'AI'11e claim was preferred by the assesses with the insurance wmpan 1116 isur ice company ...ft..r a..ee-.,_ni1n_-g L... -a.,ts ca...e t- the conclusion that e machine had indeed been extensively damaged. It therefore paid a sum of Rs.15'.2.2 lakhs to the assessee as 'T29'.> e assets. dVThe._A;ssessLng Oficer, mere_ore against the price of Rs.171.94 paid byffhfi assessee. The difference amount \NhiChV"W..'fl8S_a'v. 'rot p-""61 by me "'"1sur'ice Vmpaey to assesses was w. Ltte__ off i__ P ..- L..AQC€!LvlE1; The Assessing 'noticed' in-A loss pertains to capital asset. If the i.assesS.ee i had received the assets withoute -damage, it would have .foun¢&ir'psrt'-oi"'Tt)1ock asset.-'V Since 1-.
and the this asset transit difference in__'the'._c1ai1n'v,reeeived and the aaiouiit invested: by'"tI'_Ie. assessee normally
1. 4'consi§it.n-te's '---loss. "The machinery was ~ne'vei7__puti_to use never found part of bleak oi"«assets. as such loss cannot th-atiflie lossof Rs.25,11,255/- is the capital loss ianfris not admissible as not admissible V r ' ' «.fo'r deduction.
The Commissioner of Income Tax it x.(Appea1s) also concurred with the findings recorded by the Assessing Oflicer relying on a judgment of the Tribunal reported in 186 ITR 5'94 ('Zenith Steei Iiiges Ltd Vs. CE). Anna) 1'1'I(I' fn 141.9 '.'I\'I'I'I1"I'I';I!\l.'ll'I\I'\£h_.'I'l A-5' '4l'l1-gt'-V-Ina '1".-u-r asvwunuuss Lu I..u.L- \./\JJ.l.l.J.|.I£Ds'3.l.L.f.l.J.bl. U1 1.11!» .U..lU 1 "'r> ' " = f fag 4: ' A Section" of the Act has been put into (Appeals) the expenditure incurred bye-the assessee is in the capital f1 (1.
is notb1'"fi's.V'11:
damage to the said asset and ccneequeentialii loss is to be coI1strued""as»a capitain -[It further held that such'-,a less '11ot'~an1io\7i?.éii31e'i'T1.e_' under Section of expenditure is memied in the' '-capital field. I like \JU1Lll;:.iDD1U11ft.L 'J1: 1 City. further he-'id Etna: the "tees 'is not allowable under Sectic»n"'2_8 the --'Act;fas the asset was 1_1.ot.st'c_:-.ck was taken up b'efe1§e1- 'rT1ibu:1e1. The Tribunal V -v..aI*teV2fl_consideringt' the iniatter from all angles 'L1 ;.~ _ A . _ _ . . . ........ 4.1 ..
ft') Llifilgtllluiufiitlll LIT 4.1.. .. A _ _ _ _ _ _ . . _ . _ _ LLIC i:15¥SUl5SCC WHS vthegassessee had become the owner thereof, 1 oizlieiwise insurance company would not have paid the amount of compensation to the assessee for the damages caused to the machine. If the machine would not have been damaged in transit, obviousiy the same pi nuld 115 :9 bggn nut fn 11:29 hv fhn nsicas-cisanra ... - .., In... |.\--' .,..u, ..._, ...,w ....................
'nip la'
-re _ 11?'.
'fl.' But that stage could not arise as it damaged before installation. " .' '
4. In the light of the aforesaid faetual aspecthiof» the 'n1at,fe'1"
after having heard the learned coun'se1;_-for:'t.'ne.ap'pei1antsV, we' areof Q the considered opinion that.no.__subs'1;a_n'tia1 of law Would arise for consideration i11 this Theitfoie itvfgiS dismissed in limine. A