COMMISSIONER OF INCOME-TAX vs. SANDEEP CONSTRUCTION PVT.LTD.

ITR/184/1994HC GujaratGJHC24020260199411 October 2005Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI4 pages
AI SummaryRemanded

What were the facts?

The Commissioner of Income-tax (Revenue) has referred a question of law to the High Court of Gujarat concerning the classification of Sandeep Construction Pvt. Ltd. (Assessee) as an industrial company for Assessment Year 1983-84. The assessee's accounting period ended on March 31, 1983. Both the Commissioner (Appeals) and the Income-tax Appellate Tribunal had decided in favour of the assessee, relying on their own orders for Assessment Year 1982-83 without providing independent reasoning. The assessment order noted that the assessee performed overburden removal and excavation for Gujarat Mineral Development Corporation. The Revenue's counsel could not provide information on the outcome of the appeal for the prior assessment year.

What did the High Court hold?

The High Court noted that both the Commissioner (Appeals) and the Tribunal had decided the matter in favour of the assessee by relying on their orders for Assessment Year 1982-83 without assigning independent reasons. The Revenue's counsel could not provide information regarding the outcome of the appeal for the prior assessment year. The Court also observed that the definition of 'industrial company' depends on the actual activity and profit derived therefrom. While the assessment order mentioned excavation work for Gujarat Mineral Development Corporation, the full facts relating to the activity during the year under consideration were not available. Consequently, the Court left the reference unanswered and directed the Tribunal to consider the position for Assessment Year 1982-83 and the relevant facts for the current year when finalizing the appeal under Section 260(1) of the Act. The reference was disposed of accordingly.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in directing the Income Tax Officer to treat the assessee company as an industrial company for Assessment Year 1983-84. Assessee's Contention: The judgment does not record any specific contentions made by the assessee. However, it notes that the assessee relied on the decision in Commissioner of Income-tax, Orissa Vs. N.C. Budharaja and Company, [1980] 121 ITR 213 (Orissa) before the CIT (Appeals). Revenue's Contention: The Revenue argued that the definition of 'industrial company' requires ascertaining the actual activity carried out by the assessee and the extent of profits derived from such activity. The Revenue's counsel was unable to confirm if the decision for Assessment Year 1982-83 was further appealed and its outcome.

Which sections of the Income-tax Act were involved?

Section 256(1),Section 260(1)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
ITR/184/1994 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No.184 of 1994 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA Sd/- HONOURABLE MS.JUSTICE H.N.DEVANI Sd/- ===================================================== 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 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 SANDEEP CONSTRUCTION PVT. LTD. - Respondent(s) ===================================================== Appearance : MR MANISH R BHATT for Applicant(s) : 1, NOTICE SERVED for Respondent(s) : 1, ===================================================== CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 11/10/2005

(Per : HONOURABLE MR.JUSTICE D.A.MEHTA)

1.

The Income-tax Appellate

The order continues below.

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