CIT (C) LUDHIANA vs. HERO INVESTMENT (P) LTD.,LUDHI

ITR/14/1998HC Punjab & HaryanaPHHC01037927199807 March 2012Author: MR. JUSTICE M.M. KUMAR,MR. JUSTICE ALOK SINGH2 pages
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What were the facts?

This case concerns Income Tax Reference No. 14 of 1998, decided by the Punjab and Haryana High Court on March 07, 2012. The Revenue (Commissioner of Income Tax, Central, Ludhiana) had sought a reference to the High Court under Section 256(2) of the Income Tax Act, 1961, regarding an order passed by the Income-tax Appellate Tribunal (ITAT) on May 12, 1997, in I.T.C. No. 99/96. The dispute pertains to the assessment year(s) not explicitly stated in the provided text. The core of the matter is the calculation of deduction under Section 80M of the Income Tax Act, 1961.

What did the High Court hold?

The High Court disposed of the reference by answering the question of law in favour of the Revenue and against the assessee. The Court noted that the question of law had already been considered and decided by this very High Court in ITR Nos. 95 to 99 of 1997, vide its order dated August 11, 2009. The Revenue's counsel placed a copy of this order on record. The assessee's counsel could not successfully distinguish the present case from the cited judgment or argue that it was not applicable. The High Court found no distinguishing features between the case in hand and the previously decided judgment. Therefore, the Tribunal's finding that the deduction under Section 80M should be worked out with reference to gross dividend income and without deducting interest and other expenses was overturned.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that deduction u/s 80M be worked out with reference to gross dividend income and without deducting the amount of interest and other expenses, if any paid/incurred by the assessee? (Question of law) Assessee's Contention: The assessee argued that the deduction under Section 80M should be calculated based on gross dividend income, without deducting interest and other expenses. (Implied by the question referred). Revenue's Contention: The Revenue argued that the ITAT's decision was incorrect and that the deduction should not be calculated solely on gross dividend income without considering expenses. The Revenue relied on a previous decision of the High Court in ITR Nos. 95 to 99 of 1997, decided on August 11, 2009, which was in favour of the Revenue and against the assessee.

Which sections of the Income-tax Act were involved?

Section 256(2),Section 80M

AI-generated summary — verify with the full judgment below

-1- IN THE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH

1.

Date of Decision: March 07, 2012 Commissioner of Income Tax, (Central), Ludhiana ..Applicant Versus M/s Hero Investment (P) Ltd. G.T. Road, Ludhiana ..Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR

HON'BLE MR. JUSTICE ALOK SINGH Present: Mrs. Savita Saxena, Advocate for the revenue-applicant. Mr. Alok Mittal, Advocate for the respondent-assessee.

1.

To be referred to the Reporters or not?

2.

Whether the judgment should be reported in the Digest? M.M. KUMAR, J.

1.

Vide order and direction dated 12.05.1997 in I.T.C. No. 99/96, this Court has referred the following question of law under Section 256(2) of the Income Tax Act, 1961 for opinion of this Court at the instance of the Revenue: “Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that deduction u/s 80M be worked out with reference to gross dividend income and without deducting the amount of interest and other expenses, if any paid/ incurred by the assessee?”

2.

Mrs. Savita Saxena, learned counsel for the Revenue has su

The order continues below.

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