COMMR. OF INCOME TAX CHD. vs. M/S GJ HOTELS (P) LTD.

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ITA/466/2006HC Punjab & HaryanaPHHC01075191200612 March 2008Author: MR JUSTICE RAKESH KUMAR GARG,MR. JUSTICE SATISH KUMAR MITTAL2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court observed that a similar appeal (ITA No. 496 of 2005) concerning a similar question of law on similar facts had already been dismissed by the Court by a judgment of even date. Following the reasoning applied in that previous dismissal, the High Court found no grounds to interfere with the order of the ITAT. Consequently, the Court held that no substantial question of law arose for its determination in the present appeal. No specific finding on the perversity of the ITAT's order or the validity of the CIT(A)'s restriction of the food cost ratio was explicitly detailed, as the appeal was disposed of on the basis of precedent.

What were the facts?

The Revenue, Commissioner of Income Tax -II, Chandigarh, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench 'B'. The appeal pertains to Assessment Year 1997-98 and challenges the ITAT's decision dated July 13, 2005, passed in ITA No. 513/CHANDI/2001. The dispute involves the food cost ratio applied to the assessee, M/s G.J. Hotels (P) Ltd., Chandigarh. The Assessing Officer (AO) had based his order on the results of 17 hotels/restaurants, while the CIT(A) had restricted the food cost ratio to 60% on conjectures and surmises without evidence. The High Court noted that a similar appeal (ITA No. 496 of 2005) on similar facts and raising a similar question of law had been dismissed by the Court by a judgment of even date.

What were the issues?

1. Whether on the facts and in the circumstances of the case and in law, the order of the ITAT is perverse as the ITAT has failed to appreciate that the CIT(A) restricted the food cost ratio to 60% only on conjectures and surmises and without any evidence, whereas the Assessing Officer had based its order on the basis of results of 17 hotels/restaurants. (Question of law turning on the appreciation of evidence and perversity of findings). Contentions: Revenue: Argued that the ITAT's order was perverse because the CIT(A) had restricted the food cost ratio to 60% based on conjectures and surmises without evidence, whereas the AO's assessment was based on the results of 17 hotels/restaurants. Assessee: No arguments recorded for the assessee in the provided text.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

In the High Court for the States of Punjab and Haryana at Chandigarh … Date of decision:12.3.2008 The Commissioner of Income Tax -II,Chandigarh Appellant Versus M/s G.J.Hotels (P) Ltd. Chandigarh Respondent Coram: Hon’ble Mr.Justice Satish Kumar Mittal Hon'ble Mr.Justice Rakesh Kumar Garg Present: Mr.S.K.Garg Narwana, Advocate for the Revenue-appellant. Mr.S.K.Mukhi, Advocate for the respondents. Rakesh Kumar Garg,J

The Revenue has filed the present Appeal under Section 260A of the Income Tax Act, 1961(for short ‘the Act’) against the order of the Income Tax Appellate Tribunal, Chandigarh , Bench ‘B’ Chandigarh (for short ‘the Tribunal’), dated 13.7.2005 passed in ITA No.513/CHANDI/2001 for the Assessment Year 1997-98 raising the following substantial question of law: - “Whether on the facts and in the circumstances of the case and in law, the order of the ITAT is perverse as the ITAT has failed to appreciate the fact that the CIT(A) restricted the food cost ratio to 60 % only on conjectures and surmises and without any evidence, whereas the Assessing Officer had based its order on the basis of results of 17 hotels/restaurants.” ITA No.496 of 2005 in which similar question of law on similar facts was raised by the Revenue has been dismissed by this Court by judgment of even date. Following the same reasoning, we find no ground to interfere in the order of the Tribunal. No question of law arises in this appeal for our determination. Dismissed. (RAKESH KUMAR GARG) JUDGE March 12,2008 (SATISH KUMAR MITTAL) nk JUDGE

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