COMMISSIONER OF INCOME TAX-III vs. PRABHUDAS KISHORDAS TOBACCO PRODUCTS PVT LTD

TAXAP/522/2011HC GujaratGJHC24025298201130 August 2012Author: HONOURABLE MR. JUSTICE VIJAY MANOHAR SAHAI,HONOURABLE MR. JUSTICE N.V.ANJARIA3 pages
AI SummaryDismissed

What were the facts?

The Revenue has filed an appeal under Section 260-A of the Income Tax Act, 1961, challenging an order dated 30.09.2010 passed by the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench 'C'. The appeal pertains to the assessment year(s) not explicitly stated but implied to be related to the ITAT appeal No. 1952 of 2008. The dispute involves two main issues: a disallowance made under Section 14A of the Act and a deletion of disallowance of Rs. 2,28,94,900/- made under Section 40A(2)(b) of the Act. The ITAT had set aside the order of the CIT(A) concerning Section 14A and remitted it for fresh decision. For the Section 40A(2)(b) issue, the Revenue's appeal was based on a High Court decision in the assessee's own case.

What did the High Court hold?

The Tribunal addressed two issues. Regarding the first issue concerning disallowance under Section 14A, the Tribunal observed that the CIT(A) had not passed a reasoned order and had not applied his mind to the facts of the case, failing to satisfy the requirements of Section 250(6) of the Act. Consequently, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for deciding the issue afresh in accordance with law, after allowing an opportunity to both parties and passing a speaking order. The Tribunal held that no substantial question of law arose on this count as the matter was remanded. Regarding the second issue concerning the deletion of disallowance under Section 40A(2)(b), the Tribunal noted that the learned advocate for the appellant (Revenue) fairly stated that this issue was covered by a decision of the High Court dated 18.01.2012 in the assessee's own case. The High Court had held that the issue was essentially based on facts and did not raise a substantial question of law. The Tribunal agreed with this reasoning and held that the issue did not raise a substantial question of law. Therefore, the appeal was dismissed on both counts.

What were the issues?

The Tribunal had to decide two substantial questions of law proposed by the Revenue: 1. Whether the Appellate Tribunal is right in law and on facts in setting-aside the issue relating to disallowance made u/s 14A of the Act? 2. Whether the Appellate Tribunal is right in law and on facts in deleting the disallowance of Rs. 2,28,94,900/- made u/s 40A(2)(b) of the act? Contentions: Assessee: No arguments were recorded for the assessee as none appeared. Revenue: For the first issue concerning Section 14A, the Revenue argued that the ITAT was incorrect in setting aside the CIT(A)'s order. For the second issue concerning Section 40A(2)(b), the Revenue contended that the ITAT was wrong in deleting the disallowance. The Revenue relied on a High Court decision dated 18.01.2012 in the assessee's own case for assessment year 2002-2003, which held that the issue did not raise a substantial question of law.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 14A,Section 40A(2)(b),Section 250(6)

AI-generated summary — verify with the full judgment below

TAXAP/522/2011 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 522 of 2011 For Approval and Signature: HONOURABLE MR.JUSTICE V. M. SAHAI HONOURABLE MR.JUSTICE N.V. ANJARIA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= COMMISSIONER OF INCOME TAX-III - Appellant(s) Versus PRABHUDAS KISHORDAS TOBACCO PRODUCTS PVT LTD – Opponent(s) ========================================================= Appearance : MS PAURAMI B SHETH for Appellant(s) : 1, None for Opponent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI and HONOURABLE MR.JUSTICE N.V. ANJARIA

TAXAP/522/2011 2/3 JUDGMENT Date : 30/08/2012 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE N.V. A

The order continues below.

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