THE PRINCIPAL COMMISSIONER OF INCOME TAX vs. WESTERN AGRI SEEDS LTD.

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TAXAP/834/2019HC GujaratGJHC24065146201920 January 2020Author: HONOURABLE MR. JUSTICE J.B.PARDIWALA,HONOURABLE MR. JUSTICE BHARGAV D. KARIA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that all three questions proposed by the Revenue were questions of fact, not substantial questions of law. The Court noted that two authorities (CIT(A) and ITAT) had recorded concurrent findings of fact in favor of the assessee. Therefore, none of the proposed questions could be termed as substantial questions of law. The High Court did not delve into the merits of the disallowances themselves but focused on the nature of the questions presented. The appeal was dismissed on the ground that it did not involve a substantial question of law, as required under Section 260A of the Income Tax Act, 1961. No issue was left undecided; the appeal was disposed of on a preliminary ground.

What were the facts?

This Tax Appeal was filed by the Revenue against an order of the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, dated March 27, 2019, concerning Assessment Year 2010-11. The appeal challenges the ITAT's decision to uphold the order of the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) had deleted certain disallowances made by the Assessing Officer. The disputed amounts relate to discount and rate difference (Rs. 2,14,47,109), foreign tour expenses (Rs. 21,35,713), and disallowances under Section 40(A)(2) (Rs. 86,39,915). The ITAT affirmed the findings of the CIT(A) in favor of the assessee, Western Agri Seeds Ltd.

What were the issues?

The Tribunal had to decide the following substantial questions of law proposed by the Revenue: 1. Whether the Appellate Tribunal erred in upholding the deletion of disallowance on account of discount and rate difference amounting to Rs. 2,14,47,109? 2. Whether the Appellate Tribunal erred in upholding the deletion of disallowance on account of foreign tour expenses amounting to Rs. 21,35,713? 3. Whether the Appellate Tribunal erred in upholding the deletion of disallowances made under Section 40(A)(2) amounting to Rs. 86,39,915? The Revenue contended that the ITAT erred in law and facts by upholding the CIT(A)'s order. The judgment does not record specific arguments made by the assessee. However, the Revenue's arguments were implicitly countered by the Tribunal's finding that the questions were not substantial questions of law.

Which sections of the Income-tax Act were involved?

Section 260A,Section 40(A)(2)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/TAXAP/834/2019 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 834 of 2019 ========================================================== THE PRINCIPAL COMMISSIONER OF INCOME TAX Versus WESTERN AGRI SEEDS LTD. ========================================================== Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 20/01/2020

ORAL ORDER (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1 This Tax Appeal under Section 260A of the Income Tax Act, 1961 (for short, 'the Act, 1961') is at the instance of the Revenue and is directed against the order passed by the Income Tax Appellate Tribunal, Ahmedabad,   'B'   Bench,   dated   27th  March   2019   in   the   ITA No.2795/Ahd/2014 for the A.Y. 2010­11. 2 The   Revenue   has   proposed   the   following   questions   as   the substantial questions of law involved in the present appeal: “[A] Whether the Appellate Tribunal has erred considering the facts and circumstances of the case and in law, in upholding the order of the CIT(A) for deleting disallowance on account of discount and rate difference to Rs.2,14,47,109/­? C/TAXAP/834/2019 ORDER [B] Whether the Appellate Tribunal has erred considering the facts and circumstances of the case and in law, in upholding the order of the CIT(A) for   deleting   disallowance   on   account   of   foreign   tour   expenses   to Rs.21,35,713/­? [C] Whether the Appellate Tribunal has erred considering the facts and circumstances of the case and in law, in upholding the order of the CIT(A) for deleting disallowances made u/s 40(A)(2) to Rs.86,39,915/­?” 3 We take notice of the fact that the Appellate Tribunal has affirmed the   order   passed   by   the   CIT(Appeals).   All   the   three   questions,   as proposed, in our opinion, are questions of fact. Two authorities have recorded concurrent finding of fact in favour of the assessee. None of the three questions, as proposed, could be termed as substantial question of law. 4 In the result, this appeal fails and is hereby dismissed. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) CHANDRESH

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