M/S PADMINI PRODUCTS (P) LTD., V. THE DEPUTY COMMISSIONER OF INCOME TAX

ITA/853/2018

AI Insights

The case revolves around an appeal by M/s Padmini Products (P) Ltd. against the order of the Income-Tax Appellate Tribunal, Bengaluru, concerning the assessment year 2014-2015. The primary legal contention was regarding the eligibility of the appellant to claim depreciation based on the actual cost incurred rather than the written down value of transferred assets from the predecessor firm. Additionally, the invocation of the 5th proviso to Section 32(1) of the IT Act in subsequent assessment years post-succession was contested. The High Court, referencing a prior judgment, ruled in favor of the appellant, thereby quashing the Tribunal's order.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 754469 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 23-08-2021
• Assessment Year: misc
• Other Referred Cases: Padmini Products (P) Ltd., Vs. Deputy Commissioner of Income Tax, Circle 12(2) Bengaluru
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: SHARATH
• Keywords: Assessment Year 2014-2015; Depreciation; Income Tax; Income tax appellate tribunal; Substantial questions of law
• Section: 32(1); 43(1); 260-A

Judgement Text

"1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF AUGUST, 2021 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE HEMANT CHANDANGOUDAR ITA NO.853 OF 2018 BETWEEN: M/S PADMINI PRODUCTS (P) LTD., NO.157, K KAMARAJ ROAD, BENGALURU-560 042, (REPRESENTED BY ITS DIRECTOR, SRI.PRABHU KIRAN, AGED ABOUT 63 YEARS, S/O LATE NAGARAJ N VEMULKAR) PAN: AADCP 1790 L. ... APPELLANT (BY SRI SHARATH, ADVOCATE FOR SRI K.K.CHYTHANYA, ADVOCATE ) AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-5(1)(2), BMTC BUILDING, 5TH BLOCK, KORAMANGALA, BANGALORE-560095. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE -5(1)(2), BMTC BUILDING, 5TH BLOCK, KORAMANGALA, BANGALORE-560095. ... RESPONDENTS 2 (BY SRI E.I SANMATHI, ADVOCATE FOR SRI K.V.ARAVIND, ADVOCATE ) THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED 08.08.2018 PASSED IN ITA NO.204/BANG/2018, FOR THE ASSESSMENT YEAR 2014-2015, VIDE ANNEXURE-A, PRAYING TO: A) FORMULATE THE SUBSTANTIAL QUESTION OF LAW STATED ABOVE; B) ALLOW THE APPEAL AND SET-ASIDE THE IMPUGNED ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU 'C' BENCH BEARING IN ITA NO. 204/BANG/2018 DATED 08.08.2018 FOR AY 2014-2015 AS ENCLOSED IN ANNEXURE-A AND ETC., THIS ITA COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT Mr. Sharath learned counsel for Mr. K.K.Chythanya, learned counsel for the appellant. Mr. E.I.Sanmathi, learned counsel for the revenue. 2. This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the assesse against the order dated 8.8.2018 passed by the Income-Tax Appellate Tribunal, Bengaluru in ITA No.204/Bang/2018. 3 The subject matter of the appeal pertains to the Assessment year 2014-15. The appeal was admitted by a bench of this Court vide order dated 29.5.2019 on the following substantial question of law: \"1. Whether in the facts and circumstances of the case the Tribunal was right in holding that the Appellant is eligible to claim depreciation only with reference to the written down value of transferred assets in the hands of predecessor firm and not with reference to actual cost incurred by it ? 2. Whether in the facts and circumstances of the case, the Tribunal was right in law in upholding the action of the Respondent in invoking 5th proviso to Section 32(1) of the IT Act in the assessment years subsequent to the assessment year in which the succession took place i.e., for the AY 2014-15 ? 3. Whether in the facts and circumstances of the case, the Tribunal was right in invoking Explanation 3 to section 43(1) ?\" 4 3. When the matter was taken up today, the learned counsel for the assessee submits that the substantial questions of law involved in this appeal have already been answered in favour of the assessee by the judgment of this Court in the case of the assessee by this Court vide judgment dated 5.10.2020 in the case of Padmini Products (P) Ltd., Vs. Deputy Commissioner of Income Tax, Circle 12(2) Bengaluru reported in [2021] 277 Taxman 22 (karnataka). 4. The aforesaid submission could not be disputed by the learned counsel for the revenue. 5. For the reason assigned in the afore- mentioned judgment supra the substantial questions of law framed in this appeal are answered in favour of the assessee and against the revenue. 5 6. Accordingly, order dated 8.8.2018 passed by the Income-Tax Appellate Tribunal, Bengaluru in ITA No.204/Bang/2018 relating to assessment year 2014-15 is here by quashed. In the result, the appeal is allowed. Sd/- JUDGE Sd/- JUDGE HR "