COMMISSIONER OF INCOME TAX-II vs. GUJARAT GAS CO LTD

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TAXAP/540/2011HC GujaratGJHC24025312201114 June 2012Author: HONOURABLE MR. JUSTICE VIJAY MANOHAR SAHAI,HONOURABLE MR. JUSTICE N.V.ANJARIA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Appeal filed by the Revenue. The Court noted that the ITAT had dismissed the Revenue's appeal, relying on its own earlier decision which had been affirmed by the High Court in a prior judgment dated 10.08.2011 concerning Tax Appeals No. 953 of 2010 and 954 of 2010. The High Court found no error in the ITAT's order and concluded that the proposed question of law was already concluded by its own prior judgment. Therefore, no substantial question of law arose for consideration. The operative direction was the dismissal of the appeal.

What were the facts?

The Revenue (Commissioner of Income Tax-II) filed a Tax Appeal before the Gujarat High Court challenging an order passed by the Income Tax Appellate Tribunal (ITAT). The ITAT had dismissed the Revenue's appeal against an order dated 05.09.2008 passed by the CIT(A) under Section 154 of the Income Tax Act. The CIT(A) had directed the Assessing Officer to exclude the entire principal component included in the lease rent of Rs.2,46,90,915/-, as against Rs.1,29,04,015/- allowed by the Assessing Officer. The ITAT's decision was based on its prior ruling in ITA No.2868 and 3572/Ahd/2007 for Assessment Year 2001-02. The Revenue's appeal to the High Court argued that authorities are bound to ensure income does not fall below returned income, citing the Apex Court in Goetz India Ltd. The High Court had previously dismissed two similar Tax Appeals (No. 953 and 954 of 2010) on 10.08.2011.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to exclude the entire principal component included in the lease rent of Rs.2,46,90,915/- as against Rs.1,29,04,015/- allowed by the Assessing Officer and thereby directing the Assessing Officer to assess the income below the returned income? Assessee (Revenue) Contentions: The Revenue contended that all concerned authorities are bound to ensure that the order passed by them does not result in income falling below the returned income, as per the ratio of the decision of the Apex Court in the case of Goetz India Ltd. (CIT 284 ITR 323). Revenue Contentions: The judgment does not record specific contentions made by the Revenue in this particular appeal before the High Court, beyond the proposed substantial question of law. However, the appeal itself stems from the Revenue's disagreement with the ITAT's order.

Which sections of the Income-tax Act were involved?

Section 154

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
TAXAP/540/2011 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 540 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-II - Appellant(s) Versus GUJARAT GAS CO LTD - Opponent(s) ========================================================= Appearance : MRS MAUNA M BHATT for Appellant(s) : 1, MR MANISH J SHAH for Opponent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI and HONOURABLE MR.JUSTICE N.V. ANJARIA Date : 14/06/2012

ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE V. M. SAHAI)

TAXAP/540/2011 2/3 JUDGMENT

We have heard Mr. M.R. Bhatt, learned senior counsel for the Revenue, in this Tax Appeal. This Tax Appeal has been filed by the Revenue on the following proposed substantial question of law: “Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to exclude the entire principal component included in the lease rent i.e. Rs.2,46,90,915/- as against Rs.1,29,04,015/- allowed by the Assessing Officer and thereby directing the Assessing Officer to assess the income below the returned income?”

2.

The Department filed an appeal before the Tribunal against the order dated 05.09.2008 passed under Section 154 of the Income Tax Act by the CIT(A) directing the Assessing Officer to exclude the entire principal component included in the lease rent of Rs.2,46,90,915/- as against Rs.1,29,04,015/- allowed by the Assessing Officer. The Tribunal dismissed

the appeal of the Department relying on its own decision in ITA No.2868 and 3572/Ahd/2007 dated 12.05.2009 relevant to Assessment Year 2001-02. Against the order of the Tribunal dated 15.09.2009, the Department filed two appeals before this Court on the ground that all the concerned authorities are bound to ensure that the order passed by them does not result in income falling below the returned income as per the ratio of the decision of the Apex Court in the case of Goetz India Ltd. (CIT 284 ITR 323). This Court has dismissed both the Tax Appeals being Tax Appeal No. 953 of 2010 and Tax Appeal No.954 of 2010 by a common judgement dated 10.08.2011. 3. Relying on the earlier order of the Tribunal dated 15.05.2009, which has been affirmed by this Court on 10.08.2011, Income Tax Appellate Tribunal has decided the Revenue's appeal, and has rejected it. We do not TAXAP/540/2011 3/3 JUDGMENT find any error in the order passed by the Income Tax Appellate Tribunal. The proposed question of law is concluded by the judgment of this Court and no substantial question of law arises for consideration of this Court. This Tax Appeal is accordingly dismissed. (V.M. SAHAI, J.) (N.V. ANJARIA, J.) (SN DEVU PPS)

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