COMMISSIONER OF INCOME-TAX JALANDHAR vs. M/S SAKAY TRADERS BAST NAU, JALANDHAR

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ITA/499/2006HC Punjab & HaryanaPHHC01075227200601 April 2016Author: MR. JUSTICE RAMENDRA JAIN,MR. JUSTICE GURDEV SINGH2 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as not pressed, with liberty granted to the revenue to file an application for revival of the appeal as prayed for. The Court 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 raised by the revenue was explicitly left open to be adjudicated in an appropriate case. Therefore, the Tribunal's decision on the merits of whether expenses on FDR interest should be allowed for Section 80HHC deduction, and the quantum of such expenses, was not adjudicated by the High Court.

What were the facts?

The Commissioner of Income Tax, Jalandhar-I (appellant-revenue) filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 18.04.2006 passed by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench. The appeal pertained to assessment year 2001-02 and concerned the ITAT's decision in ITA No.488(ASR)/2004. The dispute involved the calculation of deduction under Section 80HHC, specifically regarding the inclusion of expenses incurred on earning interest from Fixed Deposits (FDRs). The ITAT had suo moto estimated these expenses at 10% of the interest earned.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the ITAT was justified in allowing, for the purpose of calculating the deduction under Section 80HHC, the expenses incurred on earning interest on FDRs, estimated by the ITAT suo moto at 10% of such interest when no such issue was under adjudication before them? Assessee's Contention: The judgment does not record any specific contentions made by the assessee, M/s Sakay Traders, Jalandhar. Revenue's Contention: The revenue, represented by the Commissioner of Income Tax, Jalandhar-I, submitted that in view of Circular No. 21/2015 dated 10.12.2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by the Central Board of Direct Taxes, it did not wish to press the present appeal as the tax effect involved was less than Rs. 20 lacs. The revenue prayed for liberty to file an application for revival of the appeal if something survived therein.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80HHC

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 01.04.2016 The Commissioner of Income Tax, Jalandhar-I, Jalandhar. .......Appellant Versus M/s Sakay Traders, Jalandhar. ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr.Vivek Sethi, Advocate for the appellant. Mr. Alok Mittal, 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 18.4.2006 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, in ITA No.488(ASR)/2004, for the assessment year 2001-02, raising the following substantial question of law: Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in allowing, for the purpose of calculating the deduction under Section 80HHC, the expenses incurred on earning interest on FDRs, estimated by the ITAT suo moto at 10% of such interest when no such issue was under adjudication before them? REEMA SAINI 2016.04.04 11:16 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) 01.04.2016 JUDGE reema REEMA SAINI 2016.04.04 11:16 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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