Revenue appeals against Tribunal orders setting aside a Section 14A disallowance and rejection of short term capital loss claim for AY 2009-10. The High Court followed the BPL Sanyo Finance decision and answered the substantial questions in favour of the assessee, dismissing the appeals.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
NC: 2024:KHC:32336-DB ITA No. 338 of 2017 C/W ITA No.379 of 2017
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF AUGUST, 2024
PRESENT
THE HON'BLE MR JUSTICE S.G.PANDIT
AND
THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO. 338 OF 2017
C/W
INCOME TAX APPEAL NO. 379 OF 2017
IN ITA No.338/2017
BETWEEN:
Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA
…APPELLANTS
(BY SRI Y V RAVI RAJ, ADVOCATE)
AND:
M/S. AGNUS HOLDINGS PVT. LTD., STAR-2, OPP. IIMB BILEKAHALL, BANNERGHATTA ROAD, BENGALURU 560076 PAN:AAHCS 6660A
…RESPONDENT
(BY SMT PRATIBHA R, ADVOCATE)
THE ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BENGALURU IN ITA NO. 529/BANG/2014 DATED13/10/2016 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(1), BENGALURU AND ETC.
IN ITA No.379/2017
BETWEEN:
…APPELLANTS
(BY SRI. Y V RAVIRAJ.,ADVOCATE A/W SRI. M. DILIP., ADVOCATE)
AND:
M/S AGNUS HOLDINGS PVT LTD STAR-2, OPP. IIMB BILEKAHALL, BANNERGHATTA ROAD, BENGALURU-560076. PAN:AAHCS 6660A.
…RESPONDENT
(BY SMT PRATIBHA R., ADVOCATE)
THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, AND ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BENGALURU IN ITA NO. 668/BANG/2014 DATED 13/10/2016 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND
ITA No.379 of 2017
NC: 2024:KHC:32336-DB ITA No. 338 of 2017 C/W
CONFIRM THE ORDER PASSED BY THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(1), BENGALURU AND ETC.
THESE APPEALS, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE S.G.PANDIT and
HON'BLE MR JUSTICE C.M. POONACHA
ORAL JUDGMENT
(PER: HON'BLE MR JUSTICE C.M. POONACHA)
ITA No.338/2017 is filed by the Revenue under Section 260 A of the Income Tax Act, 19611 , challenging the order dated 13.10.2016 passed in ITA.No.529/Bang/2014 by the Income-Tax Appellate Tribunal, Bengaluru2 .
Section 260A of the IT Act, challenging the order dated 13.10.2016 passed in ITA.No.668/Bang/2014 by the Tribunal.
of the present appeals are that the assessee carries on the
1 Hereinafter referred to as ‘IT Act’
2 Hereinafter referred to as ‘Tribunal’
business of investment and finance and trading in shares. The assessee filed returns for the assessment year 200910 declaring loss of `26,67,78,608/- and the assessing authority made disallowance under Section 141A of the IT Act and rejected the claim of forfeiture of money, paid towards share warrant as capital loss. Being aggrieved the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) -I3 , wherein the said appeal was partly allowed. Being aggrieved the assessee preferred ITA.No.529/Bang/2014. The revenue also preferred ITA.No.668/Bang/2014. The Tribunal by its order dated 13.10.2016 partly allowed the appeal of the assessee as well as the revenue. Being aggrieved the assessee has preferred the present appeal.
admitted the above appeal to consider the substantial questions of law formulated in the memorandum of appeal which are as under:
3 Hereinafter referred to as ‘Commissioner Appeals’
NC: 2024:KHC:32336-DB ITA No. 338 of 2017 C/W ITA No.379 of 2017
the disallowance made under Section 14A of the Act by following its earlier order in case of assessee itself which has not reached finality and even when the assessing authority rightly made said disallowance in compliance with Rule 8D of I.T. Rules read with Section 14A of the Act?
Counsel for the appellant - Revenue Sri. Y.V. Ravi Raj and Smt. Prathibha. R., for the respondent.
the present appeal is confined to the disallowance made under Section 14A of the IT Act with regard to the disallowance of short term capital loss.
note that the Tribunal while considering ground Nos.2 to 7
with regard to the disallowance under Section 14A of the IT Act has noticed that an identical issue was considered by the Tribunal in the assessee’s own case for the assessment year 2010-11 vide order dated 30.11.2015 passed in ITA.No.1612/Bang/2014. The relevant portion of said order dated 30.11.2015 has been extracted by the Appellate Tribunal at para No.5 of its order dated 13.10.2016. In view of the similar orders passed, the Tribunal set aside the finding of the assessing officer and remanded the matter to the assessing officer to consider the said issue on similar direction.
4 (2009) 312 ITR 63
NC: 2024:KHC:32336-DB ITA No. 338 of 2017 C/W ITA No.379 of 2017
appeals are dismissed.
Sd/(S.G.PANDIT) JUDGE
Sd/(C.M. POONACHA) JUDGE
PNV List No.: 1 Sl No.: 45
2 issues framed by the court
Whether the Tribunal was right in setting aside the Section 14A disallowance by following its earlier order in the assessee's own case despite Rule 8D computation by the assessing authority?
Whether the Tribunal was right in setting aside disallowance of short term capital loss by following its earlier order not yet reached finality?
Colour shows how this judgement treated each authority
Deputy Commissioner of Income-Tax v/s BPL Sanyo Finance Ltd.Followed¶8
(2009) 312 ITR 63
3 provisions across 2 enactments
The Pr Commissioner of Income Tax CIT(A)
The Deputy Commissioner of Income-Tax Circle-11(1)
M/S Agnus Holdings Pvt. Ltd.
S.G.Pandit
C.M. Poonacha
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
