The PCIT, CIT(A), Central Circle, Bengaluru / The DCIT, Circle-11(3), Present Address DCIT, Central Circle-1(2), Bengaluru v. Golden Gate Properties Ltd
[Citation -2020-LL-0304-116]

Citation 2020-LL-0304-116
Appellant Name The PCIT, CIT(A), Central Circle, Bengaluru / The DCIT, Circle-11(3), Present Address DCIT, Central Circle-1(2), Bengaluru
Respondent Name Golden Gate Properties Ltd.
Court HIGH COURT OF KARNATAKA
Relevant Act Income-tax
Date of Order 04/03/2020
Assessment Year 2009-10
Judgment View Judgment
Keyword Tags profit and loss account • book profits • provision for bad and doubtful debt
Bot Summary: The facts giving rise to filing of the appeal are briefly stated that, the assessee is a company and had filed its return of income declaring the total income of Rs.5,24,148/- for the assessment year 2009-2010. On going through the details, it was observed that the assessee Company has debited a sum of Rs.14,50,66,593/- towards provision for bad and doubtful advances and the same was added while 4 computing income under the normal provision. While computing book profit as per the provisions of Section 115JB of the Income Tax Act, 1961, the assessee Company has not added the provision for bad and doubtful advance. Being aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax. The said appeal came to be dismissed vide order dated 18.01.2013. Being aggrieved by the same, the assessee preferred an appeal before the Income Tax Appellate Tribunal, Bengaluru and the Tribunal by its order dated 14.06.2019 has allowed the appeal. From the perusal of the impugned order passed by the Tribunal, in particular paragraph No.16 of the impugned order, it is evident that the Tribunal has decided the issue in the light of the decision of this Court in the case of Commissioner of Income Tax Vs. Kirloskar Systems Limited reported in 220 Taxman 1, it can be held that the controversy in the instant appeal is squarely covered by the aforesaid decision.


1 IN HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS 04TH DAY OF MARCH, 2020 PRESENT HON'BLE MR. JUSTICE ALOK ARADHE AND HON'BLE MR. JUSTICE M. NAGAPRASANNA INCOME TAX APPEAL NO.18 OF 2020 BETWEEN: 1. PR.COMMISSIONER OF INCOME-TAX, CIT (A) CENTRAL CIRCLE, C.R.BUILDING, QUEEN S ROAD, BENGALURU 560 001. 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 11(3), PRESENT ADDRESS DCIT, CENTRAL CIRCLE 1(2), C.R.BUILDING, QUEENS ROAD, BENGALURU 560 001. APPELLANTS (BY SRI ARAVIND K.V., ADV.) 2 AND: M/S. GOLDEN GATE PROPERTIES LTD., 820, GOLDEN HOUSE, 80 FEET ROAD, KORAMANGALA 8TH BLOCK, BENGALURU 560 095. PAN: AAACG5248H. RESPONDENT (BY SRI S. SHANKAR, SR. ADV. ALONG WITH SRI VENKATESH, ADV. FOR SRI ANNAMALAI S. AND SRI M. LAVA, ADVS.) THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED:14.06.2019 PASSED IN ITA NO.733/BANG/2013 FOR ASSESSMENT YEAR 2009-2010 PRAYING TO: i. FORMULATE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. ii. ALLOW APPEAL AND SET ASIDE ORDERS PASSED BY INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.733/BANG/2013 DATED 14.06.2019 FOR ASSESSMENT YEAR 2009-2010 ANNEXURE C AND CONFIRM ORDER OF APPELLATE COMMISSIONER CONFIRMING ORDER PASSED BY DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2), BENGALURU. iii. TO PASS SUCH OTHER SUITABLE ORDERS AS THIS COURT DEEMS FIT TO GRANT IN FACTS AND 3 CIRCUMSTANCES OF CASE IN INTEREST OF JUSTICE AND EQUITY. THIS INCOME TAX APPEAL COMING ON FOR ADMISSION, THIS DAY, ALOK ARADHE J., MADE FOLLOWING: JUDGMENT This appeal is filed under Section 260A of Income Tax Act, 1961, by Revenue, being aggrieved by order dated 14.06.2019 passed by Income Tax Appellate Tribunal, Bengaluru, in ITA.No.733/Bang/2013. 2. facts giving rise to filing of appeal are briefly stated that, assessee is company and had filed its return of income declaring total income of Rs.5,24,148/- for assessment year 2009-2010. On going through details, it was observed that assessee Company has debited sum of Rs.14,50,66,593/- towards provision for bad and doubtful advances and same was added while 4 computing income under normal provision. But while computing book profit as per provisions of Section 115JB of Income Tax Act, 1961 (hereinafter referred to as Act ), assessee Company has not added provision for bad and doubtful advance. Assessment Authority by order dated 30.12.2011, determined book profits at Rs.11,99,31,685/-. Being aggrieved, assessee preferred appeal before Commissioner of Income Tax (Appeals). said appeal came to be dismissed vide order dated 18.01.2013. Being aggrieved by same, assessee preferred appeal before Income Tax Appellate Tribunal, Bengaluru and Tribunal by its order dated 14.06.2019 has allowed appeal. In aforesaid background, appeal has been filed. 3. Learned counsel for appellants submitted that Tribunal erred in allowing claim as bad debts though it was not in consonance with 5 accounts approved under Companies Act, 1956, for purpose of computing book profit under Section 115JB of Act. It is further submitted that Tribunal also erred in not appreciating fact that assessee had complied with stipulations stated in Schedule VI Part I to Companies Act, 1956. 4. On other hand, learned senior counsel for respondent - assessee would submit that issue involved is squarely covered by decision of this Court in case of Commissioner of Income Tax Vs. Kirloskar Systems Limited reported in 220 Taxman 1 (Kar), wherein this Court has held that no addition be made to profit as per profit and loss account by invoking clause (i) or (c) of Explanation 1 to Section 115JB of Act in case where there is corresponding reduction of sum debited to profit and loss account on account of provision for bad 6 and doubtful debts from Advances shown in Balance Sheet of Assessee. In view of aforesaid citation, no interference is called for in impugned order. 5. We have considered submissions of learned counsel for parties and perused records. 6. From perusal of impugned order passed by Tribunal, in particular paragraph No.16 of impugned order, it is evident that Tribunal has decided issue in light of decision of this Court in case of Commissioner of Income Tax Vs. Kirloskar Systems Limited reported in 220 Taxman 1 (Kar), it can be held that controversy in instant appeal is squarely covered by aforesaid decision. Therefore, no substantial questions of law arise for our consideration in this appeal. 7 7. In result, we do not find any merit in appeal. Accordingly, appeal is dismissed. Sd/- JUDGE Sd/- JUDGE nvj PCIT, CIT(A), Central Circle, Bengaluru / DCIT, Circle-11(3), Present Address DCIT, Central Circle-1(2), Bengaluru v. Golden Gate Properties Ltd
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