C.I.T. vs. SINDHU INVESTMENT P.LTD.(IVL)

ITR/19/2003HC GujaratGJHC24025675200315 February 2006Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI4 pages
AI SummaryPartly Allowed

What were the facts?

This is an Income Tax Reference filed by the Commissioner of Income Tax (CIT) against Sindhu Investment P.Ltd. (IVL). The reference concerns assessment years not explicitly stated in the judgment. The order under challenge is the one passed by the Income Tax Appellate Tribunal (ITAT). The procedural history indicates that the ITAT referred two questions of law to the High Court under Section 256(1) of the Income Tax Act, 1961. The High Court, upon hearing the parties, noted that the issues were concluded by a prior judgment of the same court in CIT v. Brahmi Investments Pvt. Ltd. dated February 10, 2006. The parties consented to dispense with the filing of the paper-book and proceed with the final hearing.

What did the High Court hold?

The High Court, by relying on its previous judgment in CIT v. Brahmi Investments Pvt. Ltd. (dated 10/2/2006 in ITR No.102 of 1995), answered the referred questions. For the first question, concerning the computation of capital gains by taking the cost in the hands of the previous owner under Section 49(1)(iii)(e), the Court answered in the affirmative, in favour of the assessee and against the revenue. This implies the Tribunal's finding on this point was upheld. For the second question, regarding the non-chargeability of capital gains in view of Section 47(v) despite Section 46(2), the Court answered in the negative, in favour of the revenue and against the assessee. This means the Tribunal's finding that no capital gains were chargeable was overturned. The reference was disposed of accordingly, with no order as to costs. No issues were expressly left undecided.

What were the issues?

The Tribunal referred two questions of law 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), 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 despite section 46(2), 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? The assessee contended that the capital gains should be computed based on the cost in the hands of the previous owner, citing Section 49(1)(iii)(e). The assessee also argued that no capital gains were chargeable due to the benefit of Section 47(v), notwithstanding Section 46(2). The revenue's contentions are not explicitly recorded, but it is implied that the revenue contested the Tribunal's findings on both issues.

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/19/2003 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 19 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 SINDHU INVESTMENT P.LTD.(IVL) - Respondent(s) ============================================================== Appearance : MR MANISH R BHATT 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 “Noti

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 49(1)(iii)(e)

All 25 judgments and leading authorities on Section 49(1)(iii)(e) →

Recent GST High Court judgments

Search GST case law →