C.I.T. vs. TUNGBHADRA INVESTMENT PVT.LTD.

ITR/33/2003HC GujaratGJHC24025689200315 February 2006Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI4 pages
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What were the facts?

This is an Income Tax Reference filed by the Commissioner of Income Tax (CIT) against Tungbhadra Investment Pvt. Ltd. The assessment years are not explicitly stated. The reference concerns two questions of law referred by the Income Tax Appellate Tribunal (ITAT). The revenue's counsel accepted notice and requested that the filing of the paper-book be dispensed with, as the issues referred were concluded by a prior judgment of the High Court in CIT v. Brahmi Investments Pvt. Ltd. dated February 10, 2006. The parties agreed to proceed with the disposal of the reference based on this prior decision. The ITAT's order or action under challenge is the reference of these questions to the High Court.

What did the High Court hold?

The High Court answered the referred questions based on its prior judgment in CIT v. Brahmi Investments Pvt. Ltd. dated February 10, 2006. For Question 1, the Court held in the affirmative, in favour of the assessee and against the revenue. This implies that the Tribunal was correct in holding that capital gains should be computed by taking the cost in the hands of the previous owner, KPPL, as per section 49(1)(iii)(e). For Question 2, the Court answered in the negative, in favour of the revenue and against the assessee. This means the Tribunal was not correct in holding that no capital gains were chargeable to tax despite section 46(2), based on the benefit of section 47(v). The reference was disposed of accordingly. No specific amount in dispute was mentioned. No issue was expressly left undecided.

What were the issues?

The Tribunal referred the following two questions for the High Court's decision: 1. Whether the Appellate Tribunal is right in law and on facts in holding that, in view of section 49(1)(iii)(e) of the Income Tax Act, 1961, capital gain should be computed by taking the cost in the hands of the previous owner, namely, KPPL? 2. Whether the Appellate Tribunal is right in law and on facts in holding that inspite of section 46(2) of the Income Tax Act, 1961, capital gains chargeable to tax had not arisen in this case in view of the fact that benefit of section 47(v) would be available to the assessee? Assessee's contentions: The assessee argued that the issues were concluded by the High Court's decision in CIT v. Brahmi Investments Pvt. Ltd. (Income Tax Reference No. 102 of 1995). Revenue's contentions: The revenue's counsel agreed that the issues were concluded by the aforesaid decision and consented to the reference being disposed of on that basis.

Which sections of the Income-tax Act were involved?

Section 49(1)(iii)(e),Section 46(2),Section 47(v),Section 256(1)

AI-generated summary — verify with the full judgment below

ITR/33/2003 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 33 of 2003 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA HONOURABLE MS.JUSTICE H.N.DEVANI ============================================================== 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 ? ============================================================== C.I.T. - Applicant(s)

Versus TUNGBHADRA INVESTMENT PVT.LTD. - Respondent(s) ============================================================== Appearance : MR BB NAIK for Applicant MR RK PATEL for Respondent(s) : 1, ================================================================== CORAM :  HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 15/02/2006 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA) 1.The Board shows the endorsement “Notice not

The order continues below.

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