COMMISSIONER OF INCOME TAX, GANDHINAGAR vs. VRAJ CORPORATION

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TAXAP/291/2018HC GujaratGJHC24011283201809 April 2018Author: HONOURABLE MR. JUSTICE AKIL KURESHI,HONOURABLE MR. JUSTICE B.N. KARIA2 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal decided that no question of law arises from the ITAT's order. The High Court found that the CIT(A) and the Tribunal had examined the material on record and concluded that the land was, in fact, transferred to the assessee-firm. This finding of fact, based on the evidence, meant that the primary objection of the Assessing Officer regarding land ownership was not sustainable. Consequently, the disallowance made by the Assessing Officer under Section 80IB(10) was deleted by the Tribunal. The Tribunal also directed to allow deduction under Section 80IB(10) on the disallowance pertaining to vehicle and telephone expenses. The High Court, agreeing with the Tribunal's factual findings and its conclusion that no substantial question of law arises, dismissed the Revenue's appeal. The ratio decidendi is that where the lower appellate authorities have made factual findings based on material evidence, the High Court should not interfere unless a substantial question of law is involved.

What were the facts?

The Revenue, Commissioner of Income Tax, Gandhinagar, is in appeal against an order of the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench. The appeal concerns the assessment year(s) not explicitly stated but related to a deduction claimed by the assessee, Vraj Corporation, under Section 80IB(10) of the Income-tax Act, 1961. The Assessing Officer had disallowed a deduction of Rs. 5,03,11,524/-, primarily on the ground that the assessee was not the owner of the land it claimed to have developed. The CIT(A) and the ITAT, however, examined the material and concluded that the land was indeed transferred to the assessee-firm. The dispute also involves a direction by the ITAT to allow deduction under Section 80IB(10) on a disallowance of Rs. 1,06,625/- related to vehicle and telephone expenses.

What were the issues?

The Tribunal had to decide the following question of law: 1. Whether, on the facts and circumstances of the case, the Appellate Tribunal is justified in deleting the disallowance made under Section 80IB(10) of Rs. 5,03,11,524/= and also directing to allow deduction under Section 80IB(10) on disallowance out of vehicle and telephone expenses of Rs. 1,06,625/= ? The Revenue's contention, as reflected in the question of law, is that the disallowance made by the Assessing Officer under Section 80IB(10) should have been upheld. The core of this contention is that the assessee was not the owner of the land developed. The judgment does not record specific arguments from the assessee's side, but it implies that the assessee successfully argued that the land was transferred to the firm, leading to the ITAT's favorable decision. The judgment also does not explicitly state the Revenue's arguments regarding the vehicle and telephone expenses, other than their inclusion in the overall disallowance.

Which sections of the Income-tax Act were involved?

Section 80IB(10)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/TAXAP/291/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL No. 291 of 2018 In TAX APPEAL No. 358 of 2018 ============================================================= COMMISSIONER OF INCOME TAX, GANDHINAGAR Versus VRAJ CORPORATION ============================================================= Appearance : Mr MANISH R BHATT, Sr Advocate with Mrs MAUNA M BHATT, Advocate for the PETITIONER ============================================================= CORAM: HONOURABLE Mr. JUSTICE AKIL KURESHI and HONOURABLE Mr. JUSTICE B.N. KARIA 9th April 2018 ORAL ORDER (PER : HONOURABLE Mr. JUSTICE AKIL KURESHI) Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal, Ahmedabad Bench, raising the following question for our consideration :- “Whether on facts and circumstances, the Appellate Tribunal is justified in deleting disallowance made under Section 80IB [10] of Rs. 5,03,11,524/= and also directing to allow deduction under Section 80IB [10] on disallowance out of vehicle and telephone expenses of Rs. 1,06,625/= ?” Page 1 of 2

The issue pertains to deduction under Section 80IB [10] of the Income-tax Act, 1961. The assessee claimed such deduction in relation to the income arising out of development of a housing project. The main objection of the Assessing Officer was that the assessee was not the owner of the land which it claimed to have developed. CIT [A] and the Tribunal, however, examined the material on record and came to the conclusion that the land was in fact transferred to the assessee-firm.

No question of law arises. Tax Appeal is dismissed. [Akil Kureshi, J.] [B.N Karia, J.] Prakash

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