PRINCIPAL COMMISSIONER OF INCOME TAX - 7 vs M/S UNITED SPIRITS LTD.,

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HC-KAR
NC: 2026:KHC:58416-DB
ITA No. 84 of 2021
CNR: KAHC010042282020
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 15 DAY OF OCTOBER, 2026
PRESENT
THE HON'BLE MR. JUSTICE S.G.PANDIT
AND
THE HON'BLE DR. JUSTICE CHILLAKUR SUMALATHA
INCOME TAX APPEAL NO. 84 OF 2021
BETWEEN:
1.
PRINCIPAL COMMISSIONER OF
INCOME TAX - 7
BMTC COMPLEX,
KORAMANGALA,
BENGALURU.
2.
THE ASSISTANT COMMISSIONER
OF INCOME TAX,
CIRCLE - 5,
KOLKATA.
Digitally signed
by AASEEFA
PARVEEN
Location: HIGH
COURT OF
KARNATAKA
…APPELLANTS
(BY SRI. E. I. SANMATHI, ADVOCATE)
AND:
M/S UNITED SPIRITS LTD.,
(IN THE MATTER OF SHAW
WALLACE FINANCIAL SERVICES LTD.,)
UB TOWERS NO. 24,
VITTAL MALLYA ROAD,
BANGALORE- 560001.
PAN : AAFCS 4451D.
…RESPONDENT
(BY SRI. MISTRI JEHANGIR, SR.COUNSEL FOR
MISS. TANMAYEE RAJKUMAR, ADVOCATE)

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HC-KAR
NC: 2026:KHC:58416-DB
ITA No. 84 of 2021
CNR: KAHC010042282020
THIS ITA / INCOME TAX APPEAL UNDER SEC.260-A OF
INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED
28/08/2019 PASSED IN ITA NO. 210/KOL/2008, FOR THE
ASSESSMENT YEAR 2004-2005 PRAYING TO
DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH
OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE
HON'BLE COURT AS DEEMED FIT AND SET ASIDE THE
APPELLATE ORDER DATED 28.08.2019 PASSED BY THE
INCOME TAX APPELLATE TRIBUNAL, 'B' BENCH, BENGALURU IN
APPEAL PROCEEDINGS NO. ITA NO. 210/KOL/2008
(ANNEXURE-A) FOR ASSESSMENT YEAR 2004-2005, AS
SOUGHT FOR IN THIS APPEAL.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.G.PANDIT
and
HON'BLE DR. JUSTICE CHILLAKUR SUMALATHA
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE S.G.PANDIT)
The above appeal filed under Section 260A of the
Income Tax Act, 1961 is directed against the order dated
28.08.2019 in ITA No.210/KOL/2008 for the assessment
year 2004-05 by the Income Tax Appellate Tribunal, 'B'
Bench, Bangalore.

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HC-KAR
NC: 2026:KHC:58416-DB
ITA No. 84 of 2021
CNR: KAHC010042282020
2. The above appeal was admitted for hearing by
order dated 27.01.2022 to examine the following two
Substantial Questions of Law:
1. Whether on the facts and circumstances of the
case and in law the Tribunal was justified in
setting aside the addition in the hands of the
assessee made in respect of sale of shares of
RITPL on protective basis by holding the shares
of RITPL were acquired by the assessee as a
strategic holding to have control of the brewery
business carried on by Shaw Wallace Breweries
Ltd and thus income from the sale of same was
taxable as Long Term Capital Gains as against
income from business ignoring that even when
the conditions for granting benefit of section
54EC are not satisfied and without appreciating
that transaction in question was purely a
business transaction considering the intention
of assessee in making profit alone?
2. Whether on the facts and circumstances of the
case and in law the Tribunal was justified in
allowing deduction of fee of Rs.6,94,29,123/-
paid to M/s. Kinsley & Co., claimed by the
assessee as deduction towards professional
charges simply relying on the fact that the

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ITA No. 84 of 2021
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payment was made to M/s. Kinsley & Co., and
services were rendered by them while ignoring
the findings of the assessing officer as well as
the Commissioner of Income Tax (Appeals)
that no evidence was furnished by the
assessee to show that the services were
rendered in connection with the transactions of
transfer of shares of RITPL?"
3. Heard learned counsel Sri.Sanmathi.E.I for
appellants-Revenue and learned Senior Counsel Sri.Mistri
Jehangir for learned counsel Ms.Tanmayee Rajkumar for
respondent-Assessee.
4. At the outset, learned Senior Counsel for the
respondent-Assessee points out that the appeal before this
Court questioning the order of the ITAT dated 28.08.2019
in ITA No.210/KOL/2008 is not maintainable in view of the
fact that the assessment order was passed by the
Assistant Commissioner of Income Tax, Circle-5, Kolkata.
Learned Senior Counsel placing reliance on the decision of
PRINCIPAL COMMISSIONER OF
the Hon'ble Apex Court in

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ITA No. 84 of 2021
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INCOME-TAX V. ABC PAPERS LTD reported in [2022] 141
TAXMANN.COM 332 (SC)
submits that appeal against the
decision of the ITAT would lie before the High Court within
the jurisdiction in which the Assessing Officer passed the
assessment order. It is submitted that since the
assessment order in the instant case is passed by the
Assessing Officer at Kolkata, the present appeal would not
be maintainable before this Court.
5. However, learned counsel Sri.Sanmathi.E.I. for
the appellants would submit that since the appellate order
is passed by the ITAT, Bangalore, this Hon'ble Court has
jurisdiction. Further, learned counsel would submit that
the respondent-Assessee has taken over the company i.e.,
M/s.Shaw Wallace Financial Services Ltd and the
respondent-Assessee Company Registered Office is
situated at Bangalore, this Court would get jurisdiction.
Thus, he would submit that the above appeal is properly

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ITA No. 84 of 2021
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filed before this Court and prayed for hearing the appeal
on merits.
6. On hearing learned counsel for the parties and
on perusal of the entire material on record, we are of the
opinion that there is substance in the submission of the
learned Senior Counsel for respondent-Assessee Company.
The above appeal relates to the Assessment Year 2004-
2005. As on the date of assessment, the Assessee-
company was not taken over by the respondent-
M/s.United Spirits Limited. The registered office of the
Assessee-company i.e., M/s.Shaw Wallace Financial
Services Ltd was at Kolkata. Therefore, the contention of
the appellants-Revenue that the registered office of the
respondent i.e, M/s.United Spirits Limited is at Bangalore,
hence, the appeal would be maintainable at Bangalore in
the facts and circumstances, is liable to be rejected.
7. Admittedly, the assessment order in respect of
M/s.Shaw Wallace Financial Services Limited is passed by

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Assistant Commissioner of Income Tax Circle-5, Kolkata on
27.12.2006. The appellants-Revenue has enclosed a
wrong assessment order to the present appeal. The
assessment order enclosed to the present appeal relates
to the Assesse-Shaw Wallace Breweries Limited.
8. Be that as it may, the Hon'ble Apex Court in
ABC Papers Ltd., supra was considering the question as to
the jurisdiction of the High Court to challenge the
decisions of the ITAT where the assessment orders are
passed by different jurisdictional Assessing Officers and
the Hon'ble Apex Court at paragraphs 33 and 34, has held
as follows:
"33. In conclusion, we hold that appeals against
every decision of the ITAT shall lie only before the
High Court within whose jurisdiction the Assessing
Officer who passed the assessment order is situated.
Even if the case or cases of an assessee are
transferred in exercise of power under section 127 of
the Act, the High Court within whose jurisdiction the
Assessing Officer has passed the order, shall
continue to exercise the jurisdiction of appeal. This

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ITA No. 84 of 2021
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principle is applicable even if the transfer is under
section 127 for the same assessment year(s).
34. We will now deal with the decisions of certain
High Court which have taken a view that the
jurisdiction of the High Court must be based on the
location of the ITAT. These judgments are Parke
Davis (India) Ltd. (supra), CIT v. A.B.C. India Ltd.
[2003] 126 Taxman 18 (Cal.), CIT v. J.L. Marrison
(India) Ltd. [2005] 272 ITR 321 (Cal.), CIT v. Akzo
Nobel India Ltd. [2014] 47 taxmann.com 332 (Cal.),
Pr. CIT v. Sungard Solutions (I) (P.) Ltd. [2019] 105
taxmann.com 67/263 Taxman 277/415 ITR 294
(Bom.) and CIT v. Shree Ganapati Rolling Mills (P.)
Ltd. [2013] 39 taxmann.com 12/219 Taxman 36
(Mag.)/356 ITR 586. We have examined these cases
in detail and found that the Assessing Officers in
each of these cases were in fact not located within
the territorial jurisdiction of these High Courts. For
this reason, the aforesaid decisions are correct to the
extent of these High Courts not exercising
jurisdiction. However, while returning the files to be
represented in the appropriate court, certain
observations were made stating that the appeals
could be filed in the High Court which exercises
territorial jurisdiction over the concerned ITAT. These
observations are only obiter. In any event they did

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not preclude the party from filing the appeal before
the appropriate High Court where the Assessing
Officers exercised jurisdiction. However, we are
reiterating for clarity and certainty that the
jurisdiction of a High Court is not dependent on the
location of the ITAT, as sometimes a Bench of the
ITAT exercises jurisdiction over plurality of states."
9. The above decision of the Hon'ble Apex Court
makes it abundantly clear that the jurisdiction to challenge
the decision of the ITAT shall be decided based on the
assessment order. To file an appeal before the High Court
under Section 260A of the Act, assessment order would
become relevant and not the decision of the ITAT. Since
the assessment order in the present case is passed by the
Assistant Commissioner of Income Tax Circle-5, Kolkata in
terms of the above decision, the present appeal would not
be maintainable before this Court. However, learned
counsel Sri.Sanmathi.E.I tried to submit that based on the
location of the ITAT, the jurisdiction to file an appeal
before the High Court shall be decided. The said

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ITA No. 84 of 2021
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contention is also answered by the Hon'ble Apex Court in
the above decision at paragraph 34.
10. Thus, we are of the considered opinion that the
above appeal would not be maintainable before this Court.
dismissed
Accordingly, the appeal stands with liberty to
file an appeal before the Jurisdictional High Court, in
accordance with law.
Sd/-
(S.G.PANDIT)
JUDGE
Sd/-
(DR.CHILLAKUR SUMALATHA)
JUDGE
DS
CT:TSM
List No.: 1 Sl No.: 5