COMMISSIONER OF INCOME TAX I CHD. vs. M/S PUNJAB STATE INDUSTRIAL DEVELOPMENT CORP. LTD

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ITA/280/2011HC Punjab & HaryanaPHHC01095610201119 October 2011Author: MR. JUSTICE HEMANT GUPTA,MR. JUSTICE GURMEET SINGH SANDHAWALIA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises for its consideration. This decision was based on the fact that the ITAT's order under appeal had relied on this Court's previous judgment in the assessee's own case for assessment years 1991-92 and 1992-93, and a Special Bench of the Tribunal's decision for assessment years 1994-95, 1995-96, and 1997-98. The Court noted that the question of law raised in the present appeal was the same as that decided in the aforesaid appeals, which were decided against the Revenue. Therefore, the appeal was dismissed without delving into the merits of the capital gains treatment.

What were the facts?

The appeal was filed by the Commissioner of Income Tax-I, Chandigarh (Revenue) against M/s Punjab State Industrial Development Corporation Ltd. (assessee). The assessment years are not explicitly stated for this specific appeal, but the ITAT's order under challenge refers to assessment years 1991-92, 1992-93, 1994-95, 1995-96, and 1997-98. The dispute concerns whether the sale of investment in various equities/shares should be treated as long-term capital gain. The ITAT had previously ruled in favor of the assessee in connected matters, relying on this Court's judgment in the assessee's own case for assessment years 1991-92 and 1992-93, and a Special Bench of the Tribunal's decision for assessment years 1994-95, 1995-96, and 1997-98. The Revenue has appealed this ITAT order.

What were the issues?

1. Whether the Hon'ble ITAT was right in law in holding that the sale of investment in various equities/shares was to be treated as long term capital gain when the main business of the assessee was to provide financial support to various industries/business concerns through investments in equity to earn profit from the same. Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue argued that the sale of investments in equities/shares should not be treated as long-term capital gain because the assessee's main business was to provide financial support to industries through equity investments to earn profit. The Revenue is questioning the ITAT's finding on this point.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision :19.10.2011 The Commissioner of Income Tax-I, Chandigarh ...Appellant Versus M/s Punjab State Industrial Development Corporation Ltd. Udyog Ltd., Sector 17, Chandigarh ...Respondent CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA HON'BLE MR. JUSTICE G.S.SANDHAWALIA Present: Ms.Urvashi Dhugga, Advocate for the appellant. **** HEMANT GUPTA J. (Oral)

The Revenue has claimed the following substantial question of law: “Whether the Hon'ble ITAT was right in law in holding that the sale of investment in various equities/shares was to be treated as long term capital gain when the main business of the assessee was to provide financial support to various industries/business concerns through investments in equity to earn profit from the same.”

Learned Income Tax Appellate Tribunal has, in the order under appeal (Annexure A3), relied upon the judgment of this Court in petitioner's own case relating to assessment year 1991-92 and 1992-93, i.e., in ITR No.20 of 2000 decided on 30.09.2010. The petitioner has also relied upon the judgment of special Bench of the Tribunal relating to assessment year 1994- 95, 1995-96 and 1997-98 dated 24.04.2006. The Income Tax Appeal against the said orders along with three other connected matters have been decided on 18.07.2011. The question of law raised in the present appeal was the question of law raised in the aforesaid appeals and have been decided against the Revenue.

In view of the said fact, no substantial question of law arises for our consideration.

Dismissed. (HEMANT GUPTA) JUDGE (G.S.SANDHAWALIA) JUDGE 19.10.2011 sailesh

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