THE COMMISSIONER OF INCOME TAX, V. M/S MANIPAL UNIVERSAL LEARNING PVT.LTD.,

ITA/429/2009

AI Insights

The case involves two Income Tax Appeals (ITA No. 429/2009 and ITA No. 430/2009) filed by the Commissioner of Income-Tax and the Assistant Commissioner of Income-Tax against Manipal Universal Learning Pvt. Ltd. The appeals challenged the orders passed by the Income Tax Appellate Tribunal (ITAT) Bangalore, which had confirmed the orders of the Appellate Commissioner allowing the depreciation claims made by the assessee for the assessment years 2003-2004 and 2005-2006. The main legal issues revolved around the correctness of the depreciation claims and the legality of the reopening of assessments. The High Court of Karnataka, referencing a prior decision on a similar matter involving the same assessee, dismissed the appeals, thereby upholding the ITAT's decision.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 728888 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 23-01-2015
• Assessment Year: misc
• Other Referred Cases: COMMISSIONER OF INCOME-TAX & ANOTHER vs. MANIPAL UNIVERSAL LEARNING PVT. LTD.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: S PARTHASARATHI
• Assessee Lawyers: K V ARAVIND
• Keywords: Assessment Year; Depreciation claim; Income tax appeal; Reopening of assessment
• Section: 260-A

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF JANUARY, 2015 PRESENT THE HON' BLE MR. JUSTICE N. KUMAR AND THE HON' BLE MR. JUSTICE B. VEERAPPA ITA No. 429/2009 C/w. ITA No.430/2009 ITA No.429/2009: BETWEEN: 1. THE COMMISSIONER OF INCOME-TAX C.R. BUILDING, QUEENS ROAD, BANGALORE. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(3), C.R. BUILDING, QUEENS ROAD, BANGALORE. .. APPELLANTS (BY SRI K V ARAVIND, ADVOCATE) AND: M/S. MANIPAL UNIVERSAL LEARNING PVT. LTD., No.14, MANIPAL TOWERS, 4TH FLOOR, AIRPORT ROAD BANGALORE. ... RESPONDENT (BY SRI S. PARTHASARATHI, ADVOCATE) 2 THIS ITA IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961, ARISING OUT OF ORDER DATED 31.03.2009 PASSED IN ITA NO. 687/BNG/2008, FOR THE ASSESSMENT YEAR 2005- 2006, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND TO ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT BANGALORE IN ITA No.687/BNG/2008, DATED 31/03/2009, CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(3), BANGALORE IN THE INTEREST OF JUSTICE. ITA NO.430/2009: BETWEEN: 1. THE COMMISSIONER OF INCOME-TAX C.R. BUILDING, QUEENS ROAD, BANGALORE. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(3), C.R. BUILDING, QUEENS ROAD, BANGALORE. .. APPELLANTS (BY SRI K V ARAVIND, ADVOCATE) AND: M/S. MANIPAL UNIVERSAL LEARNING PVT. LTD., No.14, MANIPAL TOWERS, 3 4TH FLOOR, AIRPORT ROAD BANGALORE. ... RESPONDENT (BY SRI S. PARTHASARATHI, ADVOCATE) ……… THIS ITA IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED 31.03.2009 PASSED IN ITA NO. 686/BNG/2008, FOR THE ASSESSMENT YEAR 2003- 2004, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND TO ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT BANGALORE IN ITA No.686/BNG/2008, DATED 31.03.2009, CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 2(3), BANGALORE IN THE INTEREST OF JUSTICE AND EQUITY. THESE INCOME TAX APPEALS COMING ON FOR HEARING THIS DAY, N. KUMAR J., DELIVERED THE FOLLOWING: JUDGMENT These two appeals are preferred by the revenue challenging the common order passed for the assessing years 2003-2004 and 2005-2006 in respect of the same assessee and therefore they are taken up for consideration together and disposed of by this common judgment. 4 2. The substantial questions of law that arise for our consideration in ITA No.429/2009 are as under: “1. Whether the Appellate Authorities were correct in holding that the claim of depreciation in its entirety was not inflated and did not apply to the actual assets acquired from the sister concern and for the various reasons stated there in had been disallowed resulting in a perverse finding? 2. Whether the Appellate Authorities were correct in holding that the claim of depreciation in respect of that part of inflated amount which was claimed as a commercial right is entitled to the depreciation claim and that transaction did not amount to a collusive transaction, intended to avoid tax by dubious means?” 3. In ITA No.430/2009, in addition to the aforesaid substantial questions of law, the following substantial question of law also arises for consideration: “Whether the Appellate Authorities were correct in holding that the reopening of assessment for the current assessment year was a mere change of opinion, not based on any new information and bad 5 in law without examining the fact that in the assessment proceedings for the assessment year 2004-05 it was found that the claim of depreciation in its entirety was not inflated and did not apply to the actual assets acquired from the sister concern and for the various reasons stated there in had been disallowed resulting in a perverse finding?” 4. Insofar as the substantial question dealing with the claim of depreciation of the commercial right is concerned, this Court had an occasion to consider the very same assessee’s case for the earlier assessment year in the case of COMMISSIONER OF INCOME-TAX & ANOTHER vs. MANIPAL UNIVERSAL LEARNING PVT. LTD., reported in (2013) 359 ITR 369 (Karn), where the said substantial question of law was answered in favour of the assessee and against the same. Therefore, following the said judgment, the said substantial question of law is accordingly answered in favour of the assessee and against the revenue. 6 5. Insofar as the substantial question dealing with the reopening of assessment for the current assessment year was a mere change of opinion, not based on any new information is concerned, becomes academic as the assessee is succeeding on merit. In that view of the matter, the substantial question of law is not answered. 6. Accordingly, both the appeals are dismissed. Sd/- JUDGE Sd/- JUDGE Sbs* "