DY.CIT (ASSESSMENT) vs. ASSOCIATED CROWN CLOSURES PVT.LIMITED

TAXAP/391/1999HC GujaratGJHC24025721199918 July 2008Author: HONOURABLE MR. JUSTICE K.A.PUJ,HONOURABLE MR. JUSTICE RAJESH H.SHUKLA4 pages
AI SummaryDismissed

What were the facts?

The Revenue has filed this Tax Appeal against the order of the Income Tax Appellate Tribunal (ITAT) for the assessment year 1989-90. The appeal was admitted by the Gujarat High Court, which formulated a substantial question of law. The core of the dispute revolves around the charging of interest under Sections 234B and 234C of the Income Tax Act, 1961, when the total income was determined under Section 115J of the Act. The ITAT had upheld the order of the Commissioner of Income-Tax (Appeals) which directed that such interest should not be charged. The Tribunal followed its own earlier decision and a decision of the Karnataka High Court, which was subsequently upheld by the Supreme Court.

What did the High Court hold?

The Gujarat High Court held that the Income Tax Appellate Tribunal was correct in upholding the order of the Commissioner of Income-Tax (Appeals) directing not to charge interest under Sections 234B and 234C of the Act when the total income was determined under Section 115J. The Court relied on the Supreme Court's dismissal of the Revenue's appeal against the Karnataka High Court's decision in Kwality Biscuits Limited v. Commissioner of Income-Tax. The Supreme Court's decision affirmed that interest under Sections 234B and 234C is not leviable in the case of an assessment of a company on the basis of book profits under Section 115J, as the computation under Section 115J is done at the end of the financial year and related advance tax provisions are not applicable until accounts are audited and the balance sheet is prepared. The ratio decidendi is that the nature of income computation under Section 115J precludes the applicability of interest provisions for non-payment of advance tax.

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 upholding the order of the Commissioner of Income-Tax (A) directing not to charge interest under Section 234-B and 234-C of the Act since the total income was determined under Section 115J of the Act? Assessee's Contentions: The assessee argued, and the Tribunal held, that interest under Sections 234B and 234C is not leviable when income is computed on the basis of book profits under Section 115J. This is because the entire exercise of computing income under Section 115J can only be done at the end of the financial year, and provisions related to advance tax (Sections 207, 208, 209, and 210) cannot be applied until accounts are audited and the balance sheet is prepared. Revenue's Contentions: The Revenue contended that interest under Sections 234B and 234C should be charged. The judgment does not explicitly record the Revenue's specific arguments beyond their appeal against the ITAT's decision.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 115J,Section 234-B,Section 234-C,Section 207,Section 208,Section 209,Section 210

AI-generated summary — verify with the full judgment below

TAXAP/391/1999 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 391 of 1999 For Approval and Signature: HONOURABLE MR.JUSTICE K.A.PUJ HONOURABLE MR.JUSTICE R.H.SHUKLA ======================================

1.

Whether Reporters of Local Papers may be allowed to see the judgment ? YES

2.

To be referred to the Reporter or not ? NO 3. Whether their Lordships wish to see the fair copy of the judgment ? NO 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 ? NO 5. Whether it is to be circulated to the civil judge ? NO ====================================== DY.CIT (ASSESSMENT) - Appellant Versus ASSOCIATED CROWN CLOSURES PVT.LIMITED - Opponent ====================================== Appearance : MR MR BHATT for Appellant. MR SN SOPARKAR, SENIOR COUNSEL with MS VAIBHAVI PARIKH for Opponent. ======================================

TAXAP/391/1999 2/4 JUDGMENT CORAM : HONOURABLE MR.JUSTICE K.A.PUJ and HONOURABLE MR.JUSTICE R.H.SHUKLA Date : 18/07/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE K.A.PUJ)

1.

The revenue has filed this Tax Appeal under Secti

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 260-A

All 2,347 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →