Karnataka High Court
The Pr Commissioner Of Income Tax vs M/S Spr Spirits Pvt Ltd on 30 September, 2024
Author: S.G.Pandit
Bench: S.G.Pandit
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NC: 2024:KHC:41210-DB
ITA No. 91 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 30TH DAY OF SEPTEMBER, 2024
PRESENT
THE HON'BLE MR JUSTICE S.G.PANDIT
AND
THE HON'BLE MR JUSTICE C.M. POONACHA
INCOME TAX APPEAL NO. 91 OF 2024
BETWEEN:
1. THE PR COMMISSIONER OF INCOME TAX
CENTRAL, 3RD FLOOR,
C.R. BUILDING, QUEENS ROAD,
BENGALURU - 560 001.
2. THE DEPUTY COMMISSIONER OF INCOME TAX
CENTRAL CIRCLE-1(3),
3RD FLOOR, C.R.BUILDING,
QUEENS ROAD,
BENGALURU - 560 001.
...APPELLANTS
(BY SRI. DILIP M .,ADVOCATE A/W
Digitally SRI. RAVIRAJ Y V, ADVOCATE)
signed by
BHARATHI S
AND:
Location:
HIGH COURT
OF M/S SPR SPIRITS PVT LTD
KARNATAKA
(FORMERLY KNOWN AS SPR GROUP
HOLDINGS PVT LTD)
F 113, 2CD, CENTRAL CHAMBERS,
2ND FLOOR, 2ND MAIN, GANDHINAGAR,
BENGALURU - 560 009
PAN NO. AAECS 2377M
...RESPONDENT
(BY SRI. NARENDRA KUMAR J JAIN.,ADVOCATE)
THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A
OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE
SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, ALLOW THE
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NC: 2024:KHC:41210-DB
ITA No. 91 of 2024
APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX
APPELLATE TRIBUNAL, BENGALURU IN ITA NO.132/BANG/2023
DATED 24.07.2023 FOR ASSESSMENT YEAR 2009-2010 ANNEXURE
A AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER
CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER
OF INCOME TAX, CENTRAL CIRCLE 1(3), BENGALURU AND ETC.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE S.G.PANDIT
and
HON'BLE MR JUSTICE C.M. POONACHA
ORAL JUDGMENT
(PER: HON'BLE MR JUSTICE S.G.PANDIT) Heard the learned counsel Sri. Dilip. M., along with Sri. Raviraj Y.V., for appellants/Revenue and learned counsel Sri. Narendra Kumar. J. Jain., learned counsel for the respondent/assessee.
2. The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, 'the Act') questioning the correctness and legality of order dated 24.07.2023 passed by the Income Tax Appellate Tribunal, 'C' Bench, Bengaluru (for short, 'Appellate Authority') in ITA No.131/Bang/2023 for the assessment year 2011-12, raising the following substantial questions of law: -3-
NC: 2024:KHC:41210-DB ITA No. 91 of 2024 "1. Whether on the facts and in the circumstances of the case, the Tribunal is right in deleting the addition of `27 Crores in respect of bogus purchases, without considering the fact of evidences found during search and seizure proceedings at the business premises of the assessee company revealing that three concerns were completely controlled by the assessee as their bank account statements and VAT return were kept and maintained by the assessee, which clearly reflects a well crafted scheme of tax evasion being resorted by the assessee?
2. Whether on the facts and circumstances of the case, the Tribunal is right in not considering the outcome of filed verification inquiries conducted by the CIT(A) during the remand proceedings which clearly revealed the non-existence of the said 3 bogus concerns at the so called business addresses, thus crafting a serious doubts on the genuineness and authenticity of the transaction?
3. Whether on the facts and in the circumstances of case, the Tribunal is right in holding that only profit element embedded in the transaction of bogus purchases at rate of 10% be considered, discarding the material -4- NC: 2024:KHC:41210-DB ITA No. 91 of 2024 evidence and incriminating material unearthed during search and overlooking all other surrounding circumstances like maintenance of books of accounts of supplying entitles by the assessee and filing of their VAT returns, along with cheque book leafs of the 3 entities, which shows that the transactions were carried out to book bogus purchases and thereby reduce the incidence of tax?"
3. Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue.
4. On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024. -5-
NC: 2024:KHC:41210-DB ITA No. 91 of 2024
5. In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the question of law is kept open to be adjudicated in an appropriate proceeding.
Sd/-
(S.G.PANDIT) JUDGE Sd/-
(C.M. POONACHA) JUDGE BS List No.: 4 Sl No.: 41