COMMISSIONER OF INCOME TAX vs. R NITIN & COMPANY

ITR/33/1995HC GujaratGJHC24022358199501 December 2005Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI3 pages
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What were the facts?

The Commissioner of Income Tax (Revenue) has filed an Income Tax Reference before the High Court of Gujarat at Ahmedabad concerning assessment year 1985-86 and accounting period S.Y. 2040. The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench 'A', had directed the Assessing Officer to exclude a commission payment of Rs. 8,01,845/- made to various dealers for the sale of engines from the purview of Section 37(3-A-3D) of the Income Tax Act, 1961. The Revenue is challenging this direction of the ITAT. The assessee, R Nitin & Company, was served but did not appear before the High Court.

What did the High Court hold?

The High Court held that the Income Tax Tribunal was justified in law and on facts in directing the Assessing Officer to exclude the commission of Rs. 8,01,845/- paid to various dealers for the sale of engines from the purview of Section 37(3A-3D) of the Act. This decision was based on the ratio of the High Court's own earlier judgment in the case of Commissioner of Income Tax vs. Zippers India (supra). The Court applied the ratio of the Zippers India case to the present reference. The question referred to the Court was answered 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. No issue was expressly left undecided.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to exclude the commission of Rs. 8,01,845/- paid to various dealers for sale of engines from the purview of Section 37(3-A-3D) of the Income Tax Act, 1961? Assessee's contentions: Not recorded as there was no appearance. Revenue's contentions: The revenue, through its learned Senior Standing Counsel, Mr. M.R. Bhatt, fairly pointed out that the issue in dispute has already been concluded by a prior decision of the High Court in the case of Commissioner of Income Tax vs. Zippers India, I.T.R No. 141 of 1994, decided on 5/10/2005, which was in favour of the assessee.

Which sections of the Income-tax Act were involved?

Section 37(3-A-3D),Section 256(1)

AI-generated summary — verify with the full judgment below

ITR/33/1995 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 33 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 R NITIN & COMPANY - Respondent(s) ============================================================== Appearance : MR MANISH R BHATT for Applicant(s) : 1, SERVED BY RPAD - (N) for Respondent(s) : 1, ================================================================== CORAM :  HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 01/12/2005 ORAL JUDGMENT (Per : HONOURABLE MS. H. N. DEVANI) 1.The Income Ta

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