CIT PATIALA vs. INDUSTRIAL CABLES (INDIA) LTD. RAJPURA

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ITA/306/2009HC Punjab & HaryanaPHHC01084400200925 April 2016Author: MR. JUSTICE RAMENDRA JAIN,MR. JUSTICE JITENDRA CHAUHAN2 pages
AI SummaryDismissed

What did the High Court hold?

The appeal was dismissed as not pressed. The Revenue's counsel submitted that in view of CBDT Circular No. 21/2015 dated 10.12.2015 read with Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, the appeal was not being pressed as the tax effect involved was less than ₹20 lacs. The Revenue prayed for liberty to file an application for revival of the appeal if something survived therein. The Court granted liberty as prayed for and clarified that the withdrawal of the appeal by the Revenue would not be taken as an affirmation of the ITAT's order on merits. The legal issue was left open to be adjudicated in an appropriate case.

What were the facts?

The Revenue, Commissioner of Income-Tax, Patiala, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 28.11.2008 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. The appeal pertained to the assessment year 2005-06 and challenged the ITAT's deletion of an addition of ₹32,98,500/-. This addition was made on account of the disallowance of interest on interest-free loans given by the assessee, Industrial Cables (India) Ltd., Rajpura, to its subsidiary company. The ITAT had accepted the ground of commercial expediency for these loans.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in deleting the addition of ₹32,98,500/- made on account of disallowance of interest on interest-free loans given by the assessee to the subsidiary company by accepting the ground of commercial expediency, whereas no case of commercial expediency has been made out? (Question of law) Assessee's contentions: Not recorded. Revenue's contentions: The Revenue argued that the ITAT was incorrect in deleting the addition by accepting the ground of commercial expediency, as no such case was made out. The appeal was filed under Section 260A of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 25.04.2016 The Commissioner of Income-Tax, Patiala .......Appellant Versus Industrial Cables (India) Ltd. Rajpura (Pb.) ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Zora Singh Klar, Advocate for the appellant. Ms. Divya Suri, Advocate for the respondent. RAJESH BINDAL,J. This appeal has been filed under Section 260 A of the Income Tax Act, 1961 (for short 'the Act'), against the order dated 28.11.2008 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (A), in ITA No. 237/Chandi/2008, for the assessment year 2005-06, raising the following substantial question of law: Whether on the facts and in the circumstances of the case, the ITAT was right in deleting the addition of ` 32,98,500/- made on account of disallowance of interest on interest free loans given by the assessee to the subsidiary company by accepting the ground of commercial expediency whereas no case of commercial expediency has been made out? REEMA SAINI 2016.04.28 10:28 I attest to the accuracy and authenticity of this document High Court, Chandigarh -2- Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, he does not wish to press the present appeal, as the tax effect involved is less than ` 20 lacs. However, he prays that liberty be granted to the revenue to file an application for revival of the appeal in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the appeal by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 25.04.2016 JUDGE reema REEMA SAINI 2016.04.28 10:28 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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