COMMISSIONER OF INCOME-TAX vs. M/S.GUJARAT STATE CO-OP.MARKE-TING FEDERATION LTD.

ITR/120/1997HC GujaratGJHC24020284199731 August 2006Author: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE R.S.GARG5 pages
AI SummaryAllowed

What were the facts?

The Revenue is in appeal against the Income-tax Appellate Tribunal's order for assessment year 1990-91. The assessee filed a return declaring a loss of Rs. 22,92,36,633. The return was processed under Section 143(1)(a), and adjustments led to a computed total income of Rs. 3,58,822 and additional tax calculated on prima facie additions of Rs. 2,63,24,652. The assessee claimed a deduction under Section 80P. The Assessing Officer made further adjustments, determining a net taxable income of Rs. 2,59,62,784, making the assessee liable for additional tax at 20%. The Tribunal, relying on the Delhi High Court's decision in Modi Cement, deleted the additional income-tax of Rs. 22,42,320.

What did the High Court hold?

The High Court held that the Tribunal was not right in law and facts in confirming the deletion of additional income-tax. The Tribunal had relied on the Delhi High Court's judgment in Modi Cement, which was subsequently overruled by a larger Bench of the Supreme Court in the case of Assistant Commissioner of Income-tax Vs. J.K. Synthetics Ltd. The Supreme Court observed that the retrospective amendment to Section 143(1A) by the Finance Act, 1993, effective from April 1, 1989, meant that even where an assessee's declared loss was reduced by adjustments under Section 143(1)(a), the provisions of Section 143(1A) would apply. Therefore, the appeal had to be decided in favour of the Revenue. The order of the Tribunal was set aside, and the reference was decided in favour of the Revenue and against the assessee.

What were the issues?

1. Whether the Appellate Tribunal was right in law and facts in confirming the deletion of additional income-tax of Rs. 22,42,320 leviable under Section 143(1A) of the Income-tax Act, 1961, on the ground that additional tax cannot be imposed when there is a loss? Assessee's Contention: The Tribunal held that additional tax could not be imposed as the assessee had declared a loss. This was based on the Delhi High Court's judgment in Modi Cement Vs. Union of India. Revenue's Contention: The Revenue contended that the Tribunal erred in deleting the additional tax. The Supreme Court's subsequent decision in Assistant Commissioner of Income-tax Vs. J.K. Synthetics Ltd. clarified that even if an assessee declares a loss, additional tax under Section 143(1A) could be levied, especially considering the retrospective amendment to Section 143(1A) by the Finance Act, 1993.

Which sections of the Income-tax Act were involved?

Section 143(1A),Section 143(1)(a),Section 80P

AI-generated summary — verify with the full judgment below

ITR/120/1997 1/5 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 120 of 1997 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 M/S.GUJARAT STATE CO-OP.MARKE-TING FEDERATION LTD. - Respondent(s) ========================================================= Appearance : MRS MONA M BHATT for Applicant(s) : 1, None 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/120/1997 2/5 JUDGME

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 80P

All 4,983 judgments and leading authorities on Section 80P →

Recent GST High Court judgments

Search GST case law →