CIT-I LUDHIANA vs. M/S ABHISHEK INDUSTRIES LTD. LUDHAINA

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ITA/660/2009HC Punjab & HaryanaPHHC01084792200916 March 2010Author: MR. JUSTICE M.M. KUMAR,MR. JUSTICE JITENDRA CHAUHAN3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeals were liable to be dismissed. The Court noted that the substantial questions of law raised in these appeals were identical to those in ITA Nos. 581 to 583 of 2009, which had been dismissed by a separate order of even date. The parties had agreed that these appeals should also be dismissed in terms of the order passed in the connected appeals. Therefore, the appeals did not warrant admission as the substantial questions of law stood already answered. Consequently, the appeals failed and were dismissed. The judgment does not provide reasoning on the merits of the specific issues raised, as the dismissal was based on the outcome of connected appeals.

What were the facts?

The Revenue (Commissioner of Income Tax-I, Ludhiana) filed two appeals (ITA Nos. 660 and 661 of 2009) before the High Court of Punjab and Haryana at Chandigarh. These appeals challenged an order dated March 31, 2009, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench 'B'. The ITAT's order pertained to assessment years 2002-03 and 2003-04. The appeals were filed under Section 260A of the Income Tax Act, 1961. The assessee is M/s Abhishek Industries Ltd., Ludhiana. The High Court noted that similar questions of law were raised in other appeals (ITA Nos. 581 to 583 of 2009) which had been dismissed by a separate order of even date.

What were the issues?

The Tribunal had to decide three substantial questions of law raised by the Revenue: 1. Whether the ITAT was justified in holding that invoking Section 263 of the Act was not justified, despite the Assessing Officer's order passed under Section 143(3) on February 7, 2006, being erroneous and prejudicial to the interest of the Revenue. 2. Whether the ITAT was justified in considering the issue of quantum of exclusion under clause (iv) of the Explanation below Section 115JB(2) for computing 'Book Profits', in light of decisions in DCIT Vs. Syncome Formulations (I) Ltd. and ACIT Vs. Ajanta Pharma Ltd., when the latter decision was reversed by the Bombay High Court in CIT-9 Vs. M/s. Ajanta Pharma Ltd. 3. Whether the ITAT was justified in restricting its decision to the justification of jurisdiction assumed under Section 263 and not deciding the issue on merits. Contentions: Assessee: Not recorded in the judgment. Revenue: Argued that the ITAT erred in not finding the invocation of Section 263 justified, in considering certain precedents that were later reversed, and in not deciding the issue on merits.

Which sections of the Income-tax Act were involved?

Section 260A,Section 263,Section 143(3),Section 115JB(2)

AI-generated summary — verify with the full judgment below

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

1.

Date of Decision 16.03.2010 The Commissioner of Income Tax-I Ludhiana ---Appellant Versus M/s Abhishek Industries Ltd., Ludhiana ---Respondent

2.

The Commissioner of Income Tax-I Ludhiana ---Appellant Versus M/s Abhishek Industries Ltd., 85, Industrial Area A, Ludhiana ---Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE JITENDRA CHAUHAN Present: Mr. Vivek Sethi, Advocate for the Revenue-appellant Ms. Radhika Suri, Advocate, for the assessee-respondent.

1.

To be referred to the Reporters or not?

2.

Whether the judgment should be reported in the Digest? M.M. Kumar, J. This order shall dispose of ITA Nos. 660 and 661 of 2009, preferred by the Revenue by invoking Section 260A of the Income Tax Act, 1961 (for brevity 'the Act') challenging order dated -2- 31.03.2009 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B' Chandigarh (for brevity 'the Tribunal) in respect of assessment year 2002-03 and 2003-04. The Revenue has claimed that following three substantial questions of law would arise for determination of this Court: (i) Whether on the facts and in law, the Hon'ble Income Tax Appellate Tribunal was justified in holding that the invoking of section263 of the Act was not justified ignoring the fact that the order of the Assessing Officer passed u/s 143(3) on 07.02.2006 was erroneous in so far as it was prejudicial to the interest of the Revenue? (ii) Whether on the facts and in law, the Hon'ble Income Tax Appellate Tribunal was justified in considering the issue relating to the quantum of exclusion under clause (iv) of the Explanation below section 115JB(2) of the Income Tax Act, for computation of 'Book Profits” in the said decision has been reversed by the Hon'ble Bombay High Court in ITA No. 1005 of 2008 dated 07.05.2009 in the case of CIT-9 Vs. M/s. Ajanta Pharma Ltd.?

-3- (iii) Whether on the facts and in law, the Hon'ble Income Tax Appellate Tribunal was justified in restricting its decision to the justification of the juri iction assumed u/s 263 of the Act and not deciding the issue on merits of the case? The aforesaid questions were also raised in ITA Nos. 581 to 583 of 2009, which have been dismissed by us vide a separate order of even date which are squarely covered by the decision rendered in ITA Nos. 581 to 583 of 2009. Learned counsel for the parties have also agreed that these appeals are liable to be dismissed in terms of our order passed today in ITA Nos. 581 to 583. Accordingly, these appeals do not warrant admission, as substantial questions of law stand already answered. Consequently these appeals fail and same are dismissed. A photocopy of this order be placed on the file of connected appeal.

(M.M. KUMAR)

JUDGE (JITENDRA CHAUHAN)

JUDGE March 16, 2010 Atul

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