COMMR. OF INCOME TAX, LDH. vs. M/S AVERY CYCLE INDUSTRIES LTD. LDH.

PDF · subscribers
ITA/459/2006HC Punjab & HaryanaPHHC01075183200617 January 2017Author: MR. JUSTICE RAMENDRA JAIN,MR. JUSTICE JITENDRA CHAUHAN2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal filed by the Revenue did not survive. This was in view of the judgment of the Hon'ble Supreme Court in Deputy Commissioner of Income Tax, Ahmedabad vs M/s. Core Health Care Limited, (2008) 298 I.T.R. 194, where a similar question had been answered against the Revenue. Therefore, the High Court found no merit in the present appeal. The operative direction was to dismiss the appeal. No issue was expressly left undecided.

What were the facts?

The Revenue, Commissioner of Income Tax, Ludhiana-II, filed an appeal before the High Court of Punjab and Haryana against the order dated May 30, 2005, passed by the Income-Tax Appellate Tribunal (ITAT), Chandigarh Bench 'A'. The appeal pertains to the assessment year 1998-99 and concerns the disallowance of Rs. 5,92,27,493/- made by the Assessing Officer on account of interest on money borrowed for the purchase and installation of plant and machinery in a new H.R. Unit. This unit was intended for production of a new product and was located 10 km from the existing unit, and was not in existence prior to the borrowing.

What were the issues?

1. Whether, on the facts and in law, the ITAT was legally justified in deleting the disallowance of Rs. 5,92,27,493/- made on account of interest on money borrowed for purchase and installation of plant and machinery in a new H.R. Unit, prior to the period of commencement of production, considering that the new H.R. Unit is located at a distance of 10 KM from the existing unit and was not in existence earlier and is producing a new product? Assessee's contentions: The judgment does not record any specific contentions made by the assessee before the High Court. Revenue's contentions: The Revenue argued that the disallowance made by the Assessing Officer was justified, as the interest was incurred on borrowed funds for a new unit that was not yet in production and was producing a new product, located separately from the existing unit.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 17.1.2017 Commissioner of Income Tax, Ludhiana-II .. Appellant vs M/s Avery Cycles Limited .. Respondent Coram: Hon'ble Mr. Justice Rajesh Bindal Hon'ble Mr. Justice Harinder Singh Sidhu Present: Mr. Zora Singh Klar, Advocate, for the appellant.

Mr. Alok Mittal, Advocate, for the respondent.

Rajesh Bindal, J.

The revenue has filed the present appeal raising the following substantial question of law arising out of the order dated 30.5.2005 passed by the Income-Tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh, in ITA No. 479/Chandi/2000 for the the assessment year 1998-99:- “Whether on the facts and in law, Hon'ble ITAT was legally justified in deleting the disallowance of Rs. 5,92,27,493/- made on account of interest on money borrowed for purchase and installation of plant and machinery in new H.R. Unit, prior to the period of commencement of production, ignoring the fact that new H.R. Unit is located at a distance of 10 KM from the existing unit and was not in existence earlier and is producing new product?”

Varinder Singh 2017.01.20 10:14 I attest to the accuracy and integrity of this document Punjab & Haryana High Court at Chandigarh -2- Learned counsel for the revenue does not dispute that in view of judgment of Hon'ble the Supreme Court in Deputy Commissioner of Income Tax, Ahmedabad vs M/s. Core Health Care Limited, (2008) 298 Whether speaking/ reasoned Yes/No Whether Reportable Yes/No Varinder Singh 2017.01.20 10:14 I attest to the accuracy and integrity of this document Punjab & Haryana High Court at Chandigarh

Recent GST High Court judgments

Search GST case law →