M/S NHDPL SOUTH PRIVATE LIMITED V. THE DEPUTY COMMISSIONER

ITA/586/2022

AI Insights

This case involves an appeal by M/s. NHDPL South Private Limited against the order of the Income Tax Appellate Tribunal, Bangalore, which upheld the disallowance of a deduction claimed on interest/redemption premium on debentures amounting to Rs.28,90,07,189/-. The appeal was admitted to consider whether the Tribunal was justified in its decision, particularly in light of the fact that the liability to pay interest/redemption premium had not crystallized during the year and the genuineness of the transaction was in question. The High Court of Karnataka, after hearing the arguments, decided in favor of the Assessee, referencing a previous decision in the Assessee's own case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 726663 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 23-01-2023
• Assessment Year: misc
• Other Referred Cases: M/s Nitesh Housing Developers Pvt. Ltd. Vs. The Deputy Commissioner of Income Tax
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: A SHANKAR; S ANNAMALAI
• Keywords: Crystallization of liability; Debentures; Disallowance; Genuineness of transaction; Income tax appeal; Interest/Redemption Premium
• Section: 260-A

Judgement Text

" - 1 - ITA No. 586 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF JANUARY, 2023 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR. JUSTICE G BASAVARAJA INCOME TAX APPEAL NO. 586 OF 2022 BETWEEN: M/S. NHDPL SOUTH PRIVATE LIMITED (FORMERLY KNOWN AS NITESH HOUSING DEVELOPERS PVT LTD) A COMPANY INCORPROATED UNDER THE COMPANIES ACT 1956 RERPESENTED BY ITS DIRECTOR SRI. RAJEEV KHANNA NITESH TIMESQUARE, 7TH FLOOR NO.8, M.G.ROAD BANGALORE-560 001 NOW HAVING REGISTERED OFFICE AT NO.110, B WING, LEVEL 1 ANDREWS BUIDLING, M.G. ROAD BANGALORE-560 001 PAN: AACCN6510F …APPELLANT (BY SHRI. A. SHANKAR, SENIOR ADVOCATE FOR SHRI. S. ANNAMALAI, ADVOCATE) AND: THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5(1)(2) BANGALORE …RESPONDENT (BY SHRI. M. DILIP, STANDING COUNSEL) Digitally signed by YASHODHA N Location: HIGH COURT OF KARNATAKA - 2 - ITA No. 586 of 2022 THIS INCOME TAX APPEAL IS UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 14.07.2022 PASSED IN ITA NO.1487/BANG/2019 ASSESSMENT YEAR 2012-2013, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW AS STATED THEREIN AND TO ALLOW THE APPEAL AND SET ASIDE THE FINDINGS TO THE EXTENT AGAINST THE APPELLANT IN THE ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, A BENCH BANGALORE IN ITA NO. 1487/BANG/2019 DATED 14.07.2022 FOR THE ASSESSMENT YEAR 2012-13 (ANNEXURE-A) 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 14.07.2022 in ITA No.1487/Bang/2019 passed by the ITAT1, \"A\" Bench, Bangalore, has been admitted to consider following questions of law: 1. Whether the Tribunal is justified in law to uphold the disallowance of Rs.28,90,07,189/- being deduction claimed on interest/redemption premium on debentures on the facts and circumstances of the case. 2. Whether the Tribunal was justified in law in holding that the liability to pay interest/redemption premium of Rs.28,90,07,189/- has not crystallized during the year by placing reliance on decision of the Tribunal in the appellant’s 1 Income tax Appellate Tribunal, Bengaluru Bench - 3 - ITA No. 586 of 2022 own case for the A.Y. 2011-12 and consequently passed a perverse order on the facts and circumstances of the case. 3. Whether the Tribunal is justified in law in holding the genuineness of the transaction has not been proved beyond doubt by placing reliance on decision of the Tribunal in the appellant’s own case for the A.Y. 2011-12 and consequently passed a perverse order on the facts and circumstances of the case. 2. Heard Shri A.Shankar, learned Senior Advocate for the appellant-Assessee and Shri M.Dilip, learned Standing Counsel for the respondent-Revenue. 3. Shri Shankar submits that issue involved in this appeal is covered by the decision of this Court in Assessee's own case in M/s Nitesh Housing Developers Pvt. Ltd. Vs. The Deputy Commissioner of Income Tax2 holding questions of law in assessee’s favour. 4. The said submission is not disputed by Shri Dilip, in his usual fairness. 2 ITA No.210/2017 DD 02.08.2022 - 4 - ITA No. 586 of 2022 5. In view of the above, the following: (i) Appeal allowed; (ii) The substantial questions of law are answered in favour of the Assessee and against the Revenue. No costs. Sd/- JUDGE Sd/- JUDGE YN List No.: 1 Sl No.: 30 "