COMMISSIONER OF INCOME TAX vs. M/S ITARSI OILS AND FLOURS MILLS LTD.

ITA/39/2003HC ChhattisgarhCGHC01008325200330 October 2012Author: HON'BLE SHRI JUSTICE ABHAY MANOHAR SAPRE,HON'BLE SHRI JUSTICE G. MINHAJUDDIN3 pages
AI SummaryRemanded

What were the facts?

The Revenue, Commissioner of Income Tax, Raipur, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated January 31, 2003, passed by the Income Tax Appellate Tribunal (ITAT) in Case No. 41/Nag/2001. The appeal pertains to Assessment Year 1996-97. The dispute involves the ITAT's decision to allow deductions under Sections 80HH and 80-I of the Act. The High Court admitted the appeal for hearing on a substantial question of law concerning the ITAT's justification for considering gross income from two units of the assessee, M/s Itarsi Oils and Flours Mills Ltd., namely the Flour Mill Unit, Itarsi and the Solvent Extraction Plant, Khandwa, in alleged violation of Section 80AB of the Act.

What did the High Court hold?

The High Court acknowledged a recent Supreme Court decision in M/s Synco Industries Ltd. vs. Assessing Officer, Income Tax, which interpreted various deduction sections including 80HH, 80-I, and 80AB. The Court noted that this decision was rendered after the ITAT's impugned order, meaning the ITAT did not have the benefit of this pronouncement. Consequently, the High Court found it necessary for the matter to be re-examined by the Tribunal in the first instance. The Tribunal needs to consider the factual aspects in light of the Supreme Court's ruling and other subsequent Supreme Court decisions. The Court decided to remand the case to the ITAT for a fresh examination of the factual and legal issues. The High Court explicitly stated that it was not expressing any opinion on the merits of the controversy and that the parties would have the right to appeal the ITAT's subsequent order.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in allowing deduction under Section 80HH and 80-I of the Act by considering gross income from the two units of the appellant, namely Flour Mill Unit, Itarsi and Solvent Extraction Plant, Khandwa, in violation of Section 80AB of the Act? Assessee's Contentions: Not recorded. Revenue's Contentions: The Revenue argued that the ITAT erred in allowing deductions under Sections 80HH and 80-I by considering the gross income of both units, which they contended was in violation of Section 80AB of the Act. The Revenue relied on the Supreme Court's decision in M/s Synco Industries Ltd. vs. Assessing Officer, Income Tax, (2008) 299 ITR 444, which interpreted Sections 80HHC, 80HHD, 80-I, 80-IA, and 80-HH.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80HH,Section 80-I,Section 80AB

AI-generated summary — verify with the full judgment below

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HK%{COURTOFCHHATHSGARH:BHASPUR \ \1. T. A. No. 39 of 2003 Appeant bmmissioner, Incom6 Tax, Raipur Versus Respondent M/ s Itarsi Oils and Flours Mills Ltd. APPEAL UNDER SECTION 260A OFINCOME TAX ACT, 1961 - ' DB: Hon’ble Abhay Mohar Sapre, 85 Hon’ble Mr. G. Minhajuddin, JJ. Shri Anand adaria, Standing Counsel for the Income Tax Department. Shri Shashank Dubey, Senior Advocate with Shri Vijay Kurnar Sahu, Advocate for the respondent. ( Passed on this 31$ day of October, 2012 ) Per Abhay Maohar Sapre, J. n (1) This is an appeal filed by the Revenue under ection 260A of the Income Tax Act, 1961 against the order dated 31.1.2003 passed by the Tribunal in Case No. 41/Nag/2001 (Assesent Year 1996—97). (2) This appeal was admitted for haring on the following substantial question of law : “Whether on the facts and

The order continues below.

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