M/S PREM BANSAL REAL ESTATE PV. LTD. vs. COMMISSIONER OF INCOME TAX LUDHIANA AND ANR

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ITA/274/2012HC Punjab & HaryanaPHHC01099354201212 December 20163 pages
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What did the High Court hold?

The High Court noted that the revenue's counsel conceded that issues No. 2 and 3 were liable to be answered in favour of the assessee. This concession was based on CBDT Circular No. 37/2016, which incorporated the views of the Gujarat, Bombay, and Allahabad High Courts in specific cases (Keval Construction, Sunil Vishwambharnath Tiwari, and Surya Merchants Ltd., respectively). The Department had accepted the finality of these judgments. Consequently, the High Court answered questions No. 2 and 3 in favour of the assessee. As these issues were decided in favour of the assessee, the High Court deemed it unnecessary to decide the other questions (No. 1 and 4) raised by the assessee. The appeal was disposed of based on the concession regarding questions 2 and 3.

What were the facts?

This is an appeal by M/s Prem Bansal Real Estate Pvt. Ltd. (the assessee) against an order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2007-08. The appeal was filed with a delay of 128 days, which was condoned by the High Court. The assessee is challenging the ITAT's decision on several grounds. The revenue is represented by the Commissioner of Income Tax and another authority. The dispute concerns disallowances made by the Assessing Officer (AO) and confirmed by the Commissioner of Income Tax (Appeals) (CIT(A)), which the assessee argues affect its eligibility for deduction under Section 80IB of the Income Tax Act.

What were the issues?

The High Court was asked to decide the following substantial questions of law: 1. Whether the ITAT erred in applying the ratio of the judgment in National Laggard Works Vs. Commissioner of Income Tax (288 ITR Page 18) to the facts of the present case? 2. Whether the ITAT failed to consider that disallowance of expenditure debited to the profit and loss account would result in enhancement of profits derived from an industrial undertaking eligible for deduction under Section 80IB of the Income Tax Act? 3. Whether the ITAT erred in law by holding that the assessee had not established that the additions/disallowances made by the AO and confirmed by the CIT(A) constitute profits derived from an eligible business and is not entitled to deduction under Section 80IB? 4. Whether the impugned order passed by the ITAT is perverse? Contentions: Assessee: Raised the above questions of law. Revenue: Mr. Rajesh Katoch, learned counsel for the respondent-Department, stated that questions No. 2 and 3 are liable to be answered in favour of the assessee in view of CBDT Circular No. 37/2016 dated 02.11.2016. This circular refers to judgments of the Gujarat, Bombay, and Allahabad High Courts, which the Department has accepted. Therefore, these issues are liable to be answered in favour of the assessee.

Which sections of the Income-tax Act were involved?

Section 80IB

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Sr. No.101-2 Date of decision: 12.12.2016 M/s Prem Bansal Real Estate Pvt. Ltd., Zirakpur ....Appellant versus The Commissioner of Income Tax, Central Circle, Ludhiana and another ....Respondents CORAM: HON'BLE MR. JUSTICE S.J. VAZIFDAR, CHIEF JUSTICE HON'BLE MR. JUSTICE DEEPAK SIBAL * * * * Present:- Mrs. Radhika Suri, Senior Advocate with Ms. Rinku Dahiya, Advocate for the appellant. Mr. Rajesh Katoch, Advocate for the respondents. * * * * S.J. VAZIFDAR,

CHIEF JUSTICE (ORAL)

CM No.27753-CII of 2012

For the reasons stated in the application, the delay of 128 days in filing the appeal is condoned subject to all just exceptions. Main Appeal This is an appeal against the order of the Tribunal pertaining to the Assessment Year 2007-08. According to the assessee, the following substantial questions of law arise in this appeal:- i) Whether in facts and circumstance of the case, the Jyoti Sharma 2016.12.14 10:56 I attest to the accuracy and authenticity of this document Chandigarh -2- present case? ii) Whether in facts and circumstances of the case the Income Tax Appellate Tribunal has failed to consider that disallowance of expenditure debited to profit and loss account would result in enhancement of profits derived from the industrial undertaking eligible for deduction under Section 80 IB of the Income Tax Act? iii) Whether in facts and circumstances of case, the Income Tax Appellate Tribunal was in law that assessee has not established that the additions/disallowance made by AO and confirmed by CIT(A) constitute profits derived from an eligible business and is not entitle for deduction u/s 80IB? iv) Whether the impugned order passed by Income Tax Appellate Tribunal is perverse?

2.

The appeal was admitted by an order dated 08.01.2013. 3. Mr. Rajesh Katoch, learned counsel appearing on behalf of the respondent-Department states that questions No.2 and 3 are liable to be answered in favour of the assessee in view of circular No.37/2016 dated 02.11.2016 issued by the CBDT. The Circular refers to the following judgments of three High Courts:- (1) Income-Tax Officer-Ward5(1) vs. Keval Construction, Tax Appeal No.443 of 2012, December 10, 2012, Gujarat High Court. (2) Commissioner of Income Tax-IV, Nagpur vs. Sunil Vishwambharnath Tiwari, IT Appeal No.2 of 2011, Jyoti Sharma 2016.12.14 10:56 I attest to the accuracy and authenticity of this document Chandigarh -3-

Accordingly in view of Mr. Katoch's statement, questions No.2 and 3 are answered in favour of the assessee. It is, therefore, not necessary to decide the other questions raised by the assessee.

5.

The appeal stands disposed of. (S.J. VAZIFDAR) CHIEF JUSTICE (DEEPAK SIBAL) JUDGE December 12, 2016 Jyoti 1 (i) Whether speaking/reasoned Yes/No (ii) Whether reportable Yes/No Jyoti Sharma 2016.12.14 10:56 I attest to the accuracy and authenticity of this document Chandigarh

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