COMMISSIONER OF INCOME-TAX vs. L N TALKIES

ITR/16/1996HC GujaratGJHC24021696199629 January 2008Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MR. JUSTICE Z.K.SAIYED3 pages
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What were the facts?

The Commissioner of Income-tax (CIT) passed an order under Section 263 of the Income-tax Act, 1961, directing the Assessing Officer (AO) to disallow an interest payment. The AO acted on this direction. The assessee, L N Talkies, appealed this disallowance. The Income-Tax Appellate Tribunal (ITAT) held that the AO's action in disallowing the payment, pursuant to the CIT's Section 263 order, was unwarranted and bad in law. The assessment year in question is 1981-82. This reference to the High Court arises from the ITAT's decision.

What did the High Court hold?

The High Court held that the Income-Tax Appellate Tribunal was right in law and on facts. The Tribunal had previously held, in quantum proceedings for the same assessment year (1981-82), that the Assessing Officer's action in disallowing the interest payment, pursuant to the Commissioner of Income-tax's order under Section 263, was unwarranted and bad in law. The High Court found that its earlier judgment in a related matter (ITR No. 28 of 1995) for the same assessment year had upheld the Tribunal's order. Consequently, the question referred to the High Court was answered in the affirmative, in favour of the assessee and against the revenue. The reference was disposed of accordingly, with no order as to costs.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in holding that the ITO's action in disallowing payment in pursuance to investment payments in pursuance to CIT order u/s. 263 is unwarranted and bad in law and thereby allowing the relief claimed? Assessee's Contention: The judgment does not explicitly record the assessee's contentions. However, the Tribunal's finding implies that the assessee argued the AO's action was unwarranted and legally flawed. Revenue's Contention: The judgment does not explicitly record the revenue's contentions. However, the reference itself indicates the revenue is challenging the ITAT's decision.

Which sections of the Income-tax Act were involved?

Section 256(2),Section 263

AI-generated summary — verify with the full judgment below

ITR/16/1996 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 16 of 1996 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 ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 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 ? 5 Whether it is to be circulated to the civil judge ? ========================================================= COMMISSIONER OF INCOME-TAX - Applicant(s) Versus L N TALKIES - Respondent(s) ========================================================= Appearance : MR MANISH R BHATT for Applicant(s) : 1, NOTICE SERVED for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MR.JUSTICE Z.K.SAIYED Date : 29/01/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA)

ITR/16/1996 2/3 JUDGMENT

1.

Income-Tax Appellate T

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