INCOME TAX OFFICER WARD 21 RAIPUR vs. M/S BHOJRAJ HIRALAL SHOP NO.32/83

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TAXC/15/2006HC ChhattisgarhCGHC01001220200604 August 2013Author: HON'BLE THE CHIEF JUSTICE,HON'BLE SHRI JUSTICE PRITINKER DIWAKER3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Income Tax Department. The Court noted that it was not disputed that the tax effect in the appeal pertained to the tax payable by the Assessee on the amount of ₹3,58,051. The Court also referred to the Board instructions applicable at the time, which stipulated that appeals under section 260A could only be filed if the tax effect exceeded ₹4,00,000. Since the tax effect in this appeal was on ₹3,58,051, it was less than ₹4,00,000. Therefore, the appeal was dismissed on the ground of insufficient tax effect, without deciding the substantive issues raised by the Tribunal's order regarding the classification of income and the set-off of business loss.

What were the facts?

The Income Tax Department (Appellant) filed an appeal against the order of the Income Tax Appellate Tribunal (Tribunal) dated May 31, 2006. The Tribunal had partly allowed the appeal of M/s Bhojraj Hiralal, Raipur (Assessee) for Assessment Year 1999-2000. A survey was conducted at the Assessee's premises on March 10, 1999, leading to a surrender of ₹9,65,117 by a partner on March 13, 1999. The Assessee initially filed a return declaring ₹1,96,350. The Assessing Officer (AO) assessed total income at ₹2,72,700. This was set aside by the Commissioner of Income Tax (CIT) under section 263, directing a fresh assessment. The AO then assessed income at ₹7,40,700. The Commissioner of Income Tax (Appeals) (CIT-A) enhanced the income to ₹7,99,051 but also allowed a business loss of ₹3,58,051 to be carried forward.

What were the issues?

1. Whether the Tribunal erred in holding that the income of ₹7,99,051 is to be treated as income from other sources, and the Assessee is entitled to set off the business loss of ₹3,58,051 in the same Assessment Year 1999-2000? Assessee's Contention: The Assessee argued that the Tribunal correctly allowed the income of ₹7,99,051 to be treated as income from other sources and permitted the set-off of the business loss of ₹3,58,051 in the same Assessment Year. Revenue's Contention: The Revenue contended that the Tribunal's order was incorrect. However, the primary ground for dismissal of the appeal by the High Court was based on the tax effect, not on the merits of the Assessee's entitlement to set off the business loss.

Which sections of the Income-tax Act were involved?

Section 260A,Section 263

AI-generated summary — verify with the full judgment below

^!^i:-i=- ^ ^fM^F-. sy" -.•••''-.?:-")?A..'''" ^^ ^' w !lN THE HIGH COURT OF JUDICATURE CHHATTISGARH AT BILASPUR .TaxCase (LT.A.)No.^ 12006 Appellant Income tax Officer Ward 2 (1) Raipiir. ^" Versus Respondent M/s. Bhojraj Hiralal Shop No. 32/83. Halwai lane Sadar Bazar Raipiir. Income Tax appeal u/s 260 Aoflncome Tax Act 1961

HIGH COURT OF CHHATTISGARH AT BILASPUR CORAM: HON'BLE SHRI YATINDRA SINGH, CJ. HON'BLE SHRI PRITINKER DIWAKER, J. Appellant Respondents Tax Case No.15 of 2006 Income Tax Officer Ward 2 (1) Raipur VERSUS M/s Bhojraj Hiralal Shop No.32/83, Halwai lane Sadar Bazar, Raipur Income Tax Appeal under Section 260A of the Income Tax Act.1961 Appearance: Shri Anand Dadariya, counsel for the Appellant. Shri Shashank Dubey, Senior Advocate with Shri Anand Mohan Tiwari, counsel for the Respoodent. Judaement (5thAugust, 2013) 1 .This is an appeal filed by the Income Tax Department (the Department) against the order of the Income Tax Appellate Tribunal, Nagpur (the Tribunal) dated 31.05.2006 partly allowing the appeal of M/s Bhoajraj Hiralal, Raipur (the Assesses) in respect of the Assessment year (AY) 1999-2000. THE FACTS

2.

A survey was conducted in the business premises of the Assessee on 10.03.1999. Shri Maheer Chand Jain, one of the partners of the Assessee surrendered a sum of?9,65,117/- on 13.03.1999. 3. Subsequently, the Assessee filed its return on 30.12.1999 declaring the total income of?1,96,350/-.

4.

The Assessing Officer (the AO) completed the assessment on 27.07.2001 and assessed the total income of ?2,72,700/-.

5.

The aforesaid order was set aside 'by the Commissioner Income Tax under section 263 ofthe Income Tax Act, 1961 (the Act) and directed the AO to make fresh assessment after detailed enquiry. Thereafter, the AO assessed the income of the Assessee at ?7,40.700/-.

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6.

Aggrieved by the aforesaid order, the Assessee filed an appeal before the Commissioner of Income Tax (Appeal) (the CIT-A).

7.

The CIT-A enhanced the total income of the Assessee to ?7,99,051/-. However, he further field that there was a business loss of 73,58,051/-, which was permitted to be carried forward to the next AY.

8.

Aggrieved by the aforesaid order, the Assessee filed an appeal before the Tribunal. It was allowed on 31.05.2006 holding that: • The income of the Assessee of Rs.7,99,051/- to be the income from other sources; • The Assessee was entitled to set off of business loss of ?3,58,051/- in the same AY. Hence, the present appeal by the Department. THE DECISION

9.

We have heard counsel for the parties.

10.

It is not disputed that: • The tax effect in this appeal is the tax payable by the Assessee on the amountof?3,58,051/-; • The Board instructions applioable at the time for filing appeal by the Department under section 260A of the Act was that the appeal could be filed only if the tax effect was more than ?4,00,000/-.

11.

The tax effect in this appeal is on the tax payable on the sum of ?3,58,051/-. Thus, it can never be more than ?4,00,000/-. padma

12.

Consequently, the appeal is dismissed on the ground oftax effect. ChiefJustice Pritinker Diwakar Judge

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