BANGALORE INTERNATIONAL AIRPORT LTD V. THE DEPUTY COMMISSIONER OF INCOME TAX

ITA/543/2022

AI Insights

The case involves an appeal by Bangalore International Airport Ltd against the order of the Income Tax Appellate Tribunal, which upheld the disallowance of depreciation on the grounds that the appellant had not acquired any business and commercial rights, and that leasehold rights partake the character of land, thus not entitled to depreciation under Section 32 of the Income Tax Act. The High Court of Karnataka, after hearing the arguments, decided in favor of the appellant, referencing a previous case involving the same parties where similar questions were answered in favor of the assessee.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 753856 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 06-12-2022
• Assessment Year: misc
• Other Referred Cases: Bangalore International Airport Ltd. Vs. The Deputy Commissioner of Income Tax and another
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: TANMAYEE RAJKUMAR
• Keywords: Depreciation disallowance; Income tax appeal; Leasehold rights; Business and Commercial Rights
• Section: 32; 260-A

Judgement Text

" - 1 - ITA No. 543 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF DECEMBER, 2022 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR. JUSTICE T G SHIVASHANKARE GOWDA INCOME TAX APPEAL NO. 543 OF 2022 BETWEEN: BANGALORE INTERNATIONAL AIRPORT LTD A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 ADMINISTRATION BLOCK BIAL, DEVANAHALLI BANGALORE-560 300 REPRESENTED BY ITS CHIEF FINANCIAL OFFICER BHASKAR ANAND RAO …APPELLANT (BY SMT. TANMAYEE RAJKUMAR, ADVOCATE) AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1(1)(2), (FORMERLY ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 2 (1)(1), BANGALORE) BMTC BUILDING, 80 FEET ROAD KORAMANGALA BANGALORE-560 085 2. THE COMMISSIONER OF INCOME TAX -I BMTC BUILDING, 80 FEET ROAD KORAMANGALA BANGALORE-560 085 …RESPONDENTS (BY SHRI. M. DILIP, ADVOCATE) Digitally signed by YASHODHA N Location: High Court Of Karnataka - 2 - ITA No. 543 of 2022 THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 21.06.2022 PASSED IN ITA NO.567/BANG/2020, FOR THE ASSESSMENT YEAR 2012-2013 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL AND SET ASIDE THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, 'A' BENCH, BENGALURU PRONOUNCED ON 21.06.2022 IN ITA NO.567/BANG/2020 (ANNEXURE-C) ASSESSMENT YEAR 2012-2013 TO THE EXTENT QUESTIONED HEREIN AND ETC. THIS INCOME TAX APPEAL, COMING ON FOR ADMISSION, THIS DAY, P.S.DINESH KUMAR J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the Assessee challenging the order dated 21.06.2022 in ITA No.567/Bang/2020 passed by the ITAT1, \"A\" Bench, Bangalore, has been filed to consider following two questions of law: \"(i) Whether on the facts and circumstances of the case, the Tribunal was correct in upholding the disallowance of the depreciation to the extent of Rs.2,25,00,657/- on the basis that the Appellant had not acquired any business and commercial rights without appreciating the material on record in the right perspective? (ii) Whether on the facts and circumstances of the case, the Tribunal was right in holding that leasehold 1 Income tax Appellate Tribunal, Bengaluru Bench - 3 - ITA No. 543 of 2022 rights partakes the character of land and would not be entitled to depreciation under Section 32 of the Act? 2. Heard Ms.Tanmayee Rajkumar, learned advocate for the appellant-Assessee and Shri M.Dilip, learned advocate for the respondents-Revenue. 3. Ms.Tanmayee Rajkumar submits that questions of law raised in this appeal have been answered in favour of the Assessee by this Court in Assessee's own case in Bangalore International Airport Ltd. Vs. The Deputy Commissioner of Income Tax and another2 4. The said submission is not disputed by Shri M.Dilip. 5. In view of the above, the following: (i) Appeal is allowed; (ii) The first question of law is answered in favour of the Assessee subject to Assessee demonstrating before the Income Tax Officer the actual expenditure upon which depreciation of Rs.2,25,00,657/- has been claimed; and 2 ITA No.115/2017 DD 19.09.2022 - 4 - ITA No. 543 of 2022 (iii) The second question of law is answered in favour of the Assessee and against the Revenue. No costs. Sd/- JUDGE Sd/- JUDGE YN List No.: 1 Sl No.: 13 "