COMMISSIONER OF INCOME TAX vs. M/S. MALAYALA MANORAMA CO.LTD

ITA/655/2009HC KeralaKLHC01025416200903 November 2017Author: HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON6 pages
AI SummaryDismissed

What were the facts?

These appeals were filed by the Revenue against orders of the Income Tax Appellate Tribunal (ITAT) concerning assessment years 1997-98 and 1998-99. The core dispute revolved around the eligible deduction under Section 80-IA of the Income Tax Act. The assessee, Malayala Manorama Co. Ltd., calculated its advertisement income by adding 25% to the circulation figures certified by the Audit Bureau of Circulation (ABC). The Assessing Officer (AO) initially accepted this, but later, in proceedings under Annexure A dated 29.03.2001, restricted the reckonable figures to those provided by ABC, reducing the eligible deduction. The Commissioner of Appeals, following a previous ITAT decision for assessment year 1991-92, dismissed the assessee's appeal. The ITAT, however, ruled in favour of the assessee, citing a High Court decision in the assessee's own case for assessment year 1991-92 (reported as Malayala Manorama Co. Ltd. Vs. Commissioner of Income Tax, (2002) 257 ITR 633). The Revenue's appeals to the High Court were based on the pendency of an SLP before the Supreme Court.

What did the High Court hold?

The High Court held that there was no substantial question of law to be answered in these appeals. The Court noted that the issue had been decided in favour of the assessee by the High Court in Malayala Manorama Co. Ltd. Vs. Commissioner of Income Tax (2002) 257 ITR 633. Although that case dealt with Section 80-I, the Court observed that Section 80-IA is its successor provision and the question of law remains the same. Crucially, the Court was informed that the Revenue's challenge to the earlier verdict had been repelled by the dismissal of the SLP before the Apex Court. Therefore, the law declared by the High Court in the cited decision had become final and stood in favour of the assessee. Consequently, the appeals were found to be devoid of merit and were dismissed. No issue was expressly left undecided.

What were the issues?

1. Whether, for the purpose of Section 80-IA, the computation of advertisement income in proportion to circulation figures certified by the Audit Bureau of Circulation (ABC) is in accordance with law? 2. Whether the Tribunal was right in law and fact in interfering with the disallowance of Rs. 87,36,048/- made by the Assessing Officer? 3. Whether the assessee's claim giving additional weightage to advertisement income results in mathematically incorrect and perverse conclusions? Assessee's Contentions: The assessee relied on the High Court's decision in Malayala Manorama Co. Ltd. Vs. Commissioner of Income Tax (2002) 257 ITR 633, which dealt with Section 80-I, a predecessor to Section 80-IA, and was decided in their favour. They argued that the principle laid down in that case, which was upheld by the dismissal of the Revenue's SLP, should apply to the current appeals concerning Section 80-IA. Revenue's Contentions: The Revenue argued that their appeals were mainly necessitated by the pendency of a Special Leave Petition (SLP) before the Apex Court against the earlier High Court verdict. They did not present separate arguments on the merits of the substantial questions of law, relying on the pendency of the SLP as the primary ground for their appeal.

Which sections of the Income-tax Act were involved?

Section 80-IA,Section 80-I,Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON & THE HONOURABLE MRS. JUSTICE SHIRCY V. FRIDAY, THE 3RD DAY OF NOVEMBER 2017/12TH KARTHIKA, 1939 ITA.No. 655 of 2009 ( ) ------------------------ AGAINST THE ORDER IN ITA 665/2005 of I.T.A.TRIBUNAL, COCHIN BENCH DATED 10-02-2009 APPELLANT(S)/APPELLANT/APPELLANT: -------------------------------- THE COMMISSIONER OF INCOME TAX, KOTTAYAM.

BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S)/RESPONDENT: ------------------------- M/S.MALAYALA MANORAMA CO.LTD., KOTTAYAM.

BY ADV. SRI.P.BENNY THOMAS BY ADV. SRI.P.GOPINATH BY ADV. SRI.K.JOHN MATHAI BY ADV. SRI.E.K.NANDAKUMAR BY ADV. SRI.RAJA KANNAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03-11-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

P.R. RAMACHANDRA MENON & SHIRCY V., JJ ~~~~~~~~~~~~~~~~~~~~~~ I.T.A. Nos. 655 of 2009 and 1680 of 2009 ~~~~~~~~~~~~~~~~~~~~~ Dated, this the 3rd day of November, 2017 JUDGMENT Ramachandra Menon , J. These appeals have been preferred at the instance of the Revenue, on being aggrieved of the orders passed by the Tribunal in the appeals. I

The order continues below.

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