COMMISSIONER OF INCOME-TAX vs. SHREEJI SPICES MFG.CO.LTD.

ITR/60/1997HC GujaratGJHC24020224199705 March 2008Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MR. JUSTICE Z.K.SAIYED3 pages
AI SummaryAllowed

What were the facts?

The Commissioner of Income-tax (CIT), Ahmedabad, referred a question of law to the High Court of Gujarat at Ahmedabad concerning an order passed by the Income-tax Appellate Tribunal (ITAT), Ahmedabad Bench 'C'. The ITAT had cancelled an order passed under Section 201(1) of the Income-tax Act, 1961. The dispute arose because the assessee company, Shreeji Spices Mfg. Co. Ltd., had credited certain sums in a 'payable account' instead of the respective individual accounts. The assessment year(s) are not specified. The procedural history involves the ITAT's decision which was then challenged by the revenue through a reference application under Section 256(1) of the Act.

What did the High Court hold?

The High Court held that the question referred stands concluded by its own judgment in the case of Alkapuri Investments Pvt. Ltd. (supra). Therefore, for the reasons stated in that judgment, the question is answered in the affirmative, meaning in favour of the assessee and against the revenue. The ITAT's decision to cancel the order passed under Section 201(1) was upheld. The reference was disposed of accordingly. The operative direction was to answer the question in favour of the assessee. No issue was expressly left undecided. The ratio is that if a matter is concluded by a binding precedent of the High Court, the reference will be decided in accordance with that precedent.

What were the issues?

The question before the High Court was: 1. Whether the Appellate Tribunal is right in law and on facts in cancelling the order passed u/s.201(1) of the Act when the assessee company credited certain sums in respect of payable account instead of the respective individual accounts? The revenue, represented by Mr. M.R. Bhatt, contended that the controversy was concluded by a judgment of the High Court in the case of Alkapuri Investments Pvt. Ltd. Vs. D.S. Khoba & Ors., [1997] 226 ITR 506. No arguments were recorded for the respondent-assessee as there was no appearance on their behalf, though they were served.

Which sections of the Income-tax Act were involved?

Section 201(1),Section 256(1)

AI-generated summary — verify with the full judgment below

ITR/60/1997 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 60 of 1997 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA HONOURABLE MR.JUSTICE Z.K.SAIYED =================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? NO 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 =================================================== COMMISSIONER OF INCOME-TAX - Applicant(s) Versus SHREEJI SPICES MFG. CO. LTD. - Respondent(s) =================================================== Appearance : MR MANISH R BHATT for Applicant(s) : 1, SERVED BY RPAD - (N) for Respondent(s) : 1, =================================================== CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MR.JUSTICE Z.K.SAIYED Date : 05/03/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JU

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