Court confirms property tax deduction, dismisses Revenue's appeal, upholding assessee's entitlement to deduction.

The High Court confirmed the deletion of the addition of Rs. 87,50,000 for property tax payment, citing the assessee's entitlement to deduction as the tax was paid. The Court referenced a Supreme Court decision and dismissed the Revenue's appeal. The ITAT deemed the Revenue's appeal posting as a mistake and upheld the decision in favor of the assessee, ultimately dismissing the Revenue's appeal on July 13, 2021.

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Issues:
Whether the CIT(A) erred in deleting the addition of Rs. 87,50,000 made on account of disallowance of claim of payment of property tax.

Analysis:
The appeal before the Appellate Tribunal was directed against the CIT(A)'s order dated 22.09.2011 concerning the assessment year 2008-2009. The sole issue raised was the deletion of the addition of Rs. 87,50,000 on the claim of payment of property tax. The ITAT had previously disposed of both the Revenue's appeal and the assessee's appeal in a consolidated order dated 21.12.2012. The ITAT had partly allowed the assessee's appeal and dismissed the Revenue's appeal. Subsequently, the Revenue had filed an appeal under section 260A of the Income Tax Act before the High Court of Karnataka, challenging the ITAT's order. The High Court, in its judgment dated 01.02.2021, confirmed the deletion of the addition of Rs. 87,50,000, stating that the assessee was entitled to deduction as the property tax had been paid. The High Court referenced the Supreme Court decision in BHARAT EARTH MOVERS to support its decision. As a result, the ITAT dismissed the Revenue's appeal as the issue had been settled by the High Court's judgment.

In light of the High Court's finding and confirmation of the deletion of the addition of Rs. 87,50,000, the ITAT deemed the posting of the Revenue's appeal for hearing as a mistake. Consequently, the ITAT dismissed the Revenue's appeal, upholding the decision in favor of the assessee. The appeal filed by the Revenue was thus dismissed, and the order to this effect was pronounced on July 13, 2021.

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