COMMR. OF INCOME TAX CHD. vs. M/S STEEL STRIPS LTD. CHD.

PDF · subscribers
ITA/468/2006HC Punjab & HaryanaPHHC01075193200617 July 2013Author: MR. JUSTICE DR. BHARAT BHUSHAN PARSOON,MR. JUSTICE RAJIVE BHALLA2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the controversy in the present appeal is identical to the controversy in the cited case of M/s S.A. Builders Limited. Therefore, a similar order was required. The appeal was allowed, and the impugned order of the ITAT was set aside to the limited extent of the deduction claimed under Section 36(1)(iii) of the Income Tax Act. The matter was remitted back to the Income Tax Appellate Tribunal, Chandigarh, to decide the issue afresh based on the parameters laid down in M/s S.A. Builders Ltd. v. Commissioner of Income Tax (Appeals) and another (2007) 288 ITR 1. The parties were directed to appear before the ITAT on 9.9.2013. The High Court did not decide the substantive issue of deduction but directed the ITAT to do so.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Chandigarh-II against M/s Steel Strips Ltd., Chandigarh. The assessment year(s) are not explicitly stated. The order under challenge is an order passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh. The procedural history indicates that the appellant's counsel submitted that the controversy could be disposed of in terms of a previous order dated 15.1.2009 in ITA No.20 of 2003 (Commissioner of Income Tax v. M/s S.A. Builders Limited). The respondent's counsel agreed that the controversy was identical but requested a separate decision. The High Court perused the previous judgment and the facts of the present case.

What were the issues?

1. Whether the assessee is entitled to deduction under Section 36(1)(iii) of the Income Tax Act, 1961 on the interest component in respect of capital borrowed, based upon parameters laid down in M/s S.A. Builders Ltd. v. Commissioner of Income Tax (Appeals) and another (2007) 288 ITR 1? Assessee's contention: The respondent's counsel stated that the controversy is identical to the case of M/s S.A. Builders Limited and requested the matter be decided separately, implying acceptance of the precedent's applicability. Revenue's contention: The appellant's counsel submitted that the controversy can be disposed of in terms of the order dated 15.1.2009 passed in ITA No.20 of 2003 (Commissioner of Income Tax v. M/s S.A. Builders Limited), indicating an agreement on the legal principle to be applied.

Which sections of the Income-tax Act were involved?

Section 36(1)(iii)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: August 01, 2013. Commissioner of Income Tax, Chandigarh-II ... Appellant v. M/s Steel Strips Ltd., Chandigarh ... Respondent CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Ms. Urvashi Dhugga, Advocate, for the appellant. Shri Alok Mittal, Advocate for the respondent. Rajive Bhalla

, J. (Oral): Counsel for the appellant submits that controversy in the present petition can be disposed of in terms of order dated 15.1.2009 passed in ITA No.20 of 2003 (Commissioner of Income Tax v. M/s S.A. Builders Limited). Counsel for the respondent states that though controversy in the aforementioned case is identical but as it is based upon agreement between counsel for the parties, the matter may be decided separately.

We have heard counsel for the parties, perused the aforesaid judgment and after due appraisal of the facts of the present case, have no manner of doubt that controversy in the present appeal is identical to the controversy in the aforesaid Kadyan Vinod Kumar 2013.08.12 10:56 I attest to the accuracy and integrity of this document Chandigarh case and would, therefore, require that a similar order is passed enabling the Income Tax Appellate Tribunal, Chandigarh to ascertain whether the assessee is entitled to deduction under Section 36(I)(iii) of the Income Tax Act, 1961 on the interest component in respect of capital borrowed, based upon parameters laid down in M/s S.A. Builders Ltd. v. Commissioner of Income Tax (Appeals) and another (2007) 288 ITR 1. In view of what has been recorded hereinabove, the appeal is allowed; the impugned order is set aside to the limited extent of deduction claimed under Section 36(I)(iii) of the I.T. Act and remitted to the Income Tax Appellate Tribunal, Chandigarh to decide the matter afresh. Parties are directed to appear before the Income Tax Appellate Tribunal, Chandigarh on 9.9.2013. [ Rajive Bhalla ]

Judge

[Dr. Bharat Bhushan Parsoon] August 01, 2013. Judge kadyan Kadyan Vinod Kumar 2013.08.12 10:56 I attest to the accuracy and integrity of this document Chandigarh

More judgments on Section 36(1)(iii)

All 3,665 judgments and leading authorities on Section 36(1)(iii) →

Recent GST High Court judgments

Search GST case law →