PRINCIPAL COMMISSIONER OF INCOME TAX V. M/S MEDICAL RELIEF SOCIETY OF

ITA/179/2021

AI Insights

The case involves an appeal by the Principal Commissioner of Income Tax and the Income Tax Officer (Exemptions), Mangaluru, against M/s. Medical Relief Society of South Kanara. The appeal challenged the order of the Income Tax Appellate Tribunal, which had partly allowed the respondent's appeal for the assessment year 2008-09. The main legal issues pertained to the disallowance of surplus on the sale of assets and the calculation of long-term capital gains under the Income Tax Act, 1961, particularly concerning the application of Section 11 and the deductions claimed therein. The High Court's decision referenced several precedents, including the case of St. Joseph's Monastery, which addressed similar issues.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 731891 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 25-03-2024
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income-tax (Exemptions) Vs. St. Joseph's Monastery, Al Ameen Educational Society Vs, DIT (Exemptions), CIT (Exemptions) Vs. Maria Social Service Society
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BORKAR SHEETAL SUBODH
• Assessee Lawyers: E I SANMATHI
• Keywords: Capital Gains; Deduction under section 11; Exemptions; Income tax appeal; Sale of assets
• Section: 11; 55A; 45; 260-A; 11(1A)(b)

Judgement Text

" - 1 - NC: 2024:KHC:12157-DB ITA No. 179 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF MARCH, 2024 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE C.M. POONACHA INCOME TAX APPEAL NO.179 OF 2021 BETWEEN: 1. PRINCIPAL COMMISSIONER OF INCOME TAX C.R. BUILDING ATTAVARA MANGALURU - 575001. 2. INCOME TAX OFFICER (EXEMPTIONS) WARD-1, MANGALURU. …APPELLANTS (BY SRI. E. I. SANMATHI, ADVOCATE) AND: M/S. MEDICAL RELIEF SOCIETY OF SOUTH KANARA, UNIVERSITY BUILDING MANGLAURU - 576104 PAN: AAAAM 2004P. …RESPONDENT (BY SMT. BORKAR SHEETAL SUBODH, ADVOCATE) Digitally signed by SHARMA ANAND CHAYA Location: High Court of Karnataka - 2 - NC: 2024:KHC:12157-DB ITA No. 179 of 2021 THIS APPEAL IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961, PRAYING TO SET ASIDE THE APPELLATE ORDER DATED 01.10.2019 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, BENGALURU, IN APPEAL PROCEEDINGS I.T.A.NO.160/BANG/2018 [ANNEXURE- A] FOR THE ASSESSMENT YEAR 2008-09 AS SOUGHT FOR IN THIS APPEAL. THIS APPEAL, COMING ON FOR HEARING, THIS DAY, C.M. POONACHA J., DELIVERED THE FOLLOWING: JUDGMENT 1. This appeal is filed by the Revenue challenging the order passed by the Income Tax Appellate Tribunal1 dated 01.10.2019 in Appeal No.ITA 160/BANG/2018 preferred by the Revenue for the assessment year 2008-09, partly allowing the appeal. 2. On 23.08.2022, this appeal was admitted to consider the following substantial questions of law: \"1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside disallowance of surplus on sale of assets even though entire 1 Hereinafter referred to as ‘Tribunal’ - 3 - NC: 2024:KHC:12157-DB ITA No. 179 of 2021 sale consideration amounting to Rs.24,50,000/- as receipts for purpose of calculating the income available for application during the year is required to be considered since assessee is claiming deduction under Section 11 of the Act and no part of the sale consideration was reinvested in acquiring a new capital asset as laid down in Section 11 (1A) (b) of the Income Tax Act, 1961\"? 2. \"Whether on the facts and circumstances of the case and in law, the Tribunal was correct in upholding the decision of the appellate authority that long term capital gains be calculated as per the provisions of Sections 45 to 55A of the Act whereas the provisions of Sections 45 to 55A of the Act deals with only computation of capital gains whereas assessee is also claiming deduction of capital assets under Section 11 and application of income is arrived while declaring income?\" 3. Heard Sri. E.I. Sanmathi, learned standing counsel for the appellants and Smt. Sheetal Borkar, learned counsel for the respondent. - 4 - NC: 2024:KHC:12157-DB ITA No. 179 of 2021 4. Learned counsel for the respondent submits that the issue that arises for consideration in the present appeal is covered by the Co-ordinate Bench Judgment in the case of Principal Commissioner of Income-tax (Exemptions) Vs. St. Joseph's Monastery2. 5. Learned counsel for the appellants could not dispute the proposition that the issue that arises for consideration in the present appeal is similar to the one that arose for consideration in the Judgment of the St. Joseph's Monastery2. 6. It is relevant to note that the Co-ordinate Bench of this Court while considering the questions raised in the said appeal has noticed relevant factual aspect of the matter at para 16 of its Judgment wherein it has noted that the Tribunal has relied on its earlier Judgment in the case of Al Ameen Educational Society Vs, DIT (Exemptions)3. Also this Court, noticing its earlier Judgment in the case of CIT (Exemptions) Vs. Maria Social Service Society4, has dismissed the appeal filed by the Revenue. 2 (2022) 137 taxmann.com 133 (Karnataka) 3 (2012) 26 taxman.com 250/139 ITD 245 4 (2018) 99 taxmann.com 381/408 ITR 462 - 5 - NC: 2024:KHC:12157-DB ITA No. 179 of 2021 7. In view of the aforementioned Judgment in the case of St. Joseph's Monastery2, the Co-ordinate Bench having considered the issue arising therein and the issue raised in this appeal being similar, the present appeal is dismissed by answering the questions framed for consideration in favour of the assessee and against the Revenue. No costs. SD/- JUDGE SD/- JUDGE sac List No.: 1 Sl No.: 50 "