COMMISSIONER OF INCOME TAX PATIALA vs. M/S HERO CYCLES LTD

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ITA/74/2015HC Punjab & HaryanaPHHC01110176201511 April 2016Author: MR. JUSTICE RAMENDRA JAIN,MR. JUSTICE JITENDRA CHAUHAN2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issues raised in the present appeal were squarely covered against the revenue by a previous order of the same Court dated 4.11.2009 in ITA No. 331 of 2009 (CIT-II vs. M/s Hero Cycles Limited) for the assessment year 2004-2005. The Court found no substantial question of law arising for consideration in the present appeal, based on the detailed reasons recorded in the prior judgment. Consequently, the appeal filed by the Revenue was dismissed. No specific finding was recorded on the merits of the disallowance under Section 14A for the assessment year 2006-2007, as the appeal was disposed of on the basis of precedent.

What were the facts?

The Revenue, Commissioner of Income Tax-II, Ludhiana, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench 'B'. The ITAT's order, dated 24.11.2011, pertained to ITA No. 467/Chd/2009 for the assessment year 2006-2007. The appeal challenged the ITAT's deletion of a disallowance of Rs. 2,78,97,243/- made by the Assessing Officer (AO) under Section 14A of the Act. The amount in dispute is Rs. 2,78,97,243/-.

What were the issues?

1. Whether on facts and in law, the Hon'ble ITAT was right in dismissing the appeal of the department against deletion of disallowance of Rs. 2,78,97,243/- made by the AO under Section 14A of the I.T. Act, 1961? 2. Whether the Hon'ble ITAT was justified in deleting the disallowance failing to appreciate that the assessee was keeping all its funds in a common pool and utilizes out of the same pool for earning taxable as well as exempted income? Contentions of the Revenue: The Revenue argued that the ITAT was not justified in deleting the disallowance under Section 14A, contending that the assessee maintained a common pool of funds used for both taxable and exempted income. The Revenue's appeal was filed under Section 260A of the Act.

Which sections of the Income-tax Act were involved?

Section 260A,Section 14A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: - 11.4.2016 Commissioner of Income Tax-II, Ludhiana .......Appellant. vs. M/s Hero Cycles Ltd. .....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 present appeal has been filed under Section 260A of the Income Tax Act, 1961 (for short 'the Act') against the order of Income Tax Appellate Tribunal, Chandigarh Bench 'B' passed on 24.11.2011 in ITA No. 467/Chd/2009 for the assessment year 2006-2007 raising the following substantial questions of law: - “Whether on facts and in law, the Hon'ble ITAT was right in dismissing the appeal of the department against deletion of disallowance of Rs. 2,78,97,243/- made by the A.O. under Section 14A of the I.T. Act, 1961?” “Whether the Hon'ble ITAT was justified in deleting the disallowance failing to appreciate that the assessee was keeping all its funds in a common pool and utilizes out of the same pool for earning taxable as well as exempted income?” PREETI 2016.04.21 10:54 I attest to the accuracy and integrity of this document Chandigarh -2- Learned counsel for revenue fairly submitted that the issues raised in the present appeal are squarely covered against the revenue vide order of this Court dated 4.11.2009 passed in ITA No. 331 of 2009 (CIT-II vs. M/s Hero Cycles Limited) for the assessment year 2004-2005.

For the detailed reasons recorded in ITA No. 331 of 2009, no substantial question of law arises for consideration in the present appeal.

Dismissed. (RAJESH BINDAL) JUDGE 11.4.2016 (HARINDER SINGH SIDHU) preeti JUDGE PREETI 2016.04.21 10:54 I attest to the accuracy and integrity of this document Chandigarh

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