COMMISSIONER OF INCOME TAX vs. TALIMI INVESTMENT P LTD

ITR/168/1995HC GujaratGJHC24022491199522 December 2005Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI4 pages
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What were the facts?

The Commissioner of Income Tax (Revenue) has referred two questions of law to the High Court of Gujarat at Ahmedabad concerning the assessment years 1984-85 and 1985-86. The assessee is Talimi Investment Pvt Ltd. The dispute pertains to the includibility of interest on redeemable bonds and convertible debentures in the assessee's total income for the relevant assessment years. The Income Tax Appellate Tribunal had ruled in favour of the assessee. The High Court heard the matter after a joint request from both parties, noting that one of the judges had previously appeared for the assessee before the Commissioner (Appeals).

What did the High Court hold?

The High Court held that the questions referred to it were concluded by its own prior decision in the case of Commissioner of Income-tax Vs. Nirman Investments Pvt. Ltd., Income Tax Reference No.116 of 1991, decided on October 1, 2002. This earlier decision, in turn, followed another decision of the same court in Income Tax Reference No.110 of 1990, decided on July 10, 2002. In both those cases, the Court had answered the similar questions in the affirmative, in favour of the assessee and against the Revenue. Therefore, applying the ratio of these precedents, the High Court answered the questions referred in the present case in the affirmative, meaning 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, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that interest on redeemable bonds and convertible debentures attributable to the period under consideration was not includible in the total income of the assessee for assessment year 1984-85? (Question of law) 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that interest on redeemable bonds and convertible debentures attributable to the period under consideration was not includible in the total income of the assessee for assessment year 1985-86? (Question of law) Assessee's Contention: The judgment does not record specific arguments made by the assessee. However, the outcome indicates the assessee supported the Tribunal's decision. The assessee relied on the High Court's earlier decision in Commissioner of Income-tax Vs. Nirman Investments Pvt. Ltd. Revenue's Contention: The judgment does not record specific arguments made by the Revenue. However, the Revenue initiated the reference, indicating disagreement with the Tribunal's order.

Which sections of the Income-tax Act were involved?

Section 256(1)

AI-generated summary — verify with the full judgment below

ITR/168/1995 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No.168 of 1995 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 ? ======================================================= COMMISSIONER OF INCOME TAX - Applicant(s) Versus TALIMI INVESTMENT P LTD - Respondent(s) ======================================================= Appearance : MR MANISH R BHATT for Applicant(s) : 1, MR RK PATEL for Respondent(s) : 1, ======================================================= CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 22/12/2005 ORAL JUDGMENT (Per : HONOURABLE MS.JUSTICE H.N.DEVANI)

1.

The Income Tax Appellate

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