M/S BHARATH INFRA TECH PRIVATE LIMITED V. THE DEPUTY COMMISSIONER OF INCOME TAX

ITA/424/2018

AI Insights

The case involves M/s. Bharath Infra Tech Private Limited, the appellant, contesting an addition of Rs.5,68,497 to their income for the assessment year 2008-2009, which was written off as receivable from St.Mary's Education Trust. The addition was initially made by the Assessing Officer under Section 143(3) of the Income Tax Act, 1961. The Commissioner of Income-Tax (Appeals) deleted two other additions but sustained this particular addition. Both the Revenue and the assessee appealed to the ITAT, which dismissed the Revenue's appeal and confirmed the CIT(A)'s order regarding the addition of Rs.5,68,497. The High Court found that the assessment order was not framed as a consequence of incriminating material and there was abatement of the assessment proceedings, leading to the decision to remit the matter back to the ITAT for reconsideration.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 693632 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 22-11-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: DILIP
• Assessee Lawyers: CHANDRASEKHAR
• Keywords: Assessment year 2008-2009; Bad debt; CIT(A); Cross objection; Income tax appeal; Incriminating material; ITAT
• Section: 143(3); 260-A

Judgement Text

" - 1 - ITA No. 424 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF NOVEMBER, 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. 424 OF 2018 BETWEEN: 1. M/S. BHARATH INFRA TECH PRIVATE LIMITED, REPRESENTED BY ITS MANAGING DIRECTOR, SRI. DAYANANDA, # 186, 1ST CROSS, HOSUR ROAD, WILSON GARDEN, BENGALURU – 560 027. PAN:AACCB0960F. …APPELLANT (BY SRI. CHANDRA SEKHAR V., ADVOCATE) AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -1(2), C.R.BUILDING, QUEENS ROAD, BENGALURU – 560 001. …RESPONDENT (BY SRI.DILIP M., ADVOCATE FOR SRI.K.V.ARAVIND, STANDING COUNSEL) Digitally signed by MALA K N Location: HIGH COURT OF KARNATAKA - 2 - ITA No. 424 of 2018 THIS ITA/INCOME TAX APPEAL UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 19.01.2018 PASSED IN CROSS OBJECTION NO.212/BANG/2015 [IN ITA 1443/BANG/2014], FOR THE ASSESSMENT YEAR 2008- 2009, [VIDE ANNEXURE- A], PRAYING TO A) TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW AS STATED ABOVE AND ANSWER THE SAME IN FAVOUR OF THE APPELLANT. B) TO ALLOW THE APPEAL AND SET ASIDE THE FINDINGS TO THE EXTENT AGAINST THE APPELLANT IN THE COMMON ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'C' BENCH, BANGALORE IN CROSS OBJECTION NO. 212/BANG/2015 [IN ITA 1443/BANG/2014] DATED 19.01.2018 FOR THE ASSESSMENT YEAR 2008-2009 [VIDE ANNEXURE-A] AND ETC., THIS APPEAL, COMING ON FOR HEARING, THIS DAY P.S. DINESH KUMAR J., DELIVERED THE FOLLOWING: JUDGMENT Heard Shri.Chandrasekhar, learned advocate for the appellant-assessee and Shri. M. Dilip, learned advocate for Shri. K.V. Aravind, learned Standing counsel for the respondent - Revenue. 2. Brief facts of the case are, the Assessing Officer in his order under Section 143(3) of the Income Tax Act, 1961 (for short 'the Act') made three additions. On appeal by the assessee, the Commissioner, Income-Tax (Appeals) [for short - 3 - ITA No. 424 of 2018 'CIT(A)'] deleted two additions and sustained the addition with regard to Rs.5,68,497/-. The Revenue challenged the CIT(A)'s order before the Income Tax Appellate Tribunal (for short 'ITAT') with regard to the relief granted by the CIT(A) with regard to a sum of Rs.27,25,725/- received from M/s.Gancon Projects and Rs.79,98,779/- written off as bad debt receivable from M/s Balaji Builders and Developers. 3. The assessee filed Cross Appeal with regard to addition of Rs.5,68,497/- which is also the amount written off receivable from St.Mary's Education Trust. 4. Both the appeals filed by the Revenue and the cross objector have been disposed of by the common impugned order. 5. The ITAT has dismissed Revenue's appeal. With regard to cross objection, it has held that the assessment order was not framed as a consequence of an incriminating material and there is abatement of the assessment proceedings and confirmed the CIT(A)'s order. - 4 - ITA No. 424 of 2018 6. Shri.Chandrasekhar, for the assessee pointed out ground No.2 from the grounds of appeal urged before the ITAT in assessee's appeal stating that the assessee had denied that it was not liable to tax, over and above the returned income of Rs.1,81,149/-. He argued that the question of addition pursuant to any search proceedings under Section 143(3) of the Act, does not arise. 7. This contention is not opposed by the learned advocate for the Revenue. 8. In view of the above, the matter requires re-consideration in the hands of ITAT. Hence, the following; ORDER (i) Appeal is allowed. (ii) Matter is remitted to the file of ITAT for re-consideration with regard to cross objection No.212 (Bang)/2015 and addition of Rs.5,68,497/-. - 5 - ITA No. 424 of 2018 (iii) Since, the matter has been remanded to the ITAT, the questions of law framed by this Court on 08.04.2019, do not require any answer and accordingly not answered. No costs. Sd/- JUDGE Sd/- JUDGE GH List No.: 1 Sl No.: 17 "