COMMISSIONER OF INCOME-TAX vs. ANKIT INTERMEDIATES

ITR/20/1999HC GujaratGJHC24025178199931 August 2006Author: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE R.S.GARG3 pages
AI SummaryAllowed

What were the facts?

This case involves an Income Tax Reference filed by the Commissioner of Income-tax (Revenue) against Ankit Intermediates (Assessee) for the assessment year 1989-1990. The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench 'B', had referred a question of law to the Gujarat High Court. The dispute centers on the levy of additional tax under Section 143(1A) of the Income Tax Act. The Commissioner of Income-tax (Appeals) and the ITAT had both deleted this additional tax. The Revenue is challenging the ITAT's order.

What did the High Court hold?

The High Court held that the order of the CIT(A), which was confirmed by the Tribunal, was incorrect. The Court referred to the Supreme Court's decision in Assistant Commissioner Income Tax V. J.K. Synthetics Limited and Union of India V. Modi Cement, which observed that in view of the amendment of Section 143(1A) with retrospective effect, the Assessing Officer is entitled to demand additional tax if a return of loss is converted into a return of profit after adjusting losses. Therefore, the High Court quashed the orders of the CIT(A) and the Tribunal and answered the reference in favour of the Revenue. The operative direction was to quash the impugned orders.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT(A) deleting the additional tax charged under section 143(1A) of the Act? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The ITAT and CIT(A) held that additional tax could not be levied under Section 143(1A). Revenue's Contention: The Revenue, through its counsel, is challenging the deletion of the additional tax by the lower authorities, implying they believe the levy was justified. The Revenue relies on the Supreme Court's decision in Assistant Commissioner Income Tax V. J.K. Synthetics Limited and Union of India V. Modi Cement.

Which sections of the Income-tax Act were involved?

Section 143(1A)

AI-generated summary — verify with the full judgment below

ITR/20/1999 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 20 of 1999 For Approval and Signature: HONOURABLE MR.JUSTICE R.S.GARG HONOURABLE MR.JUSTICE M.R. SHAH ========================================================= 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 ANKIT INTERMEDIATES - Respondent(s) ========================================================= Appearance : MR MANISH R BHATT for Applicant(s) : 1, SERVED BY RPAD - (N) for Respondent(s) : 1, ========================================================= CORAM :  HONOURABLE MR.JUSTICE R.S.GARG and HONOURABLE MR.JUSTICE M.R. SHAH Date : 31/08/2006 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE R.S.GARG)

ITR/20/1999 2/3 JUDGMENT Ms Mona Bhatt,

The order continues below.

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