COMMISSIONER OF INCOME-TAX vs. NACHMO MARKETING PVT. LTD.

ITR/187/1993HC GujaratGJHC24021241199321 June 2005Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI6 pages
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What were the facts?

This case involves an Income Tax Reference made by the Income Tax Appellate Tribunal, Ahmedabad Bench 'C', to the High Court of Gujarat at Ahmedabad at the instance of the Commissioner of Income Tax, Gujarat-I, Ahmedabad. The respondent assessee is Nachmo Marketing Pvt. Ltd. The reference concerns two questions of law arising from an order of the Tribunal. The revenue appeared through its learned Standing Counsel, Mrs. M.M. Bhatt, while no one appeared for the respondent assessee despite being served. The judgment was delivered on June 21, 2005.

What did the High Court hold?

The High Court answered the reference. On the first issue, applying the ratio of CIT vs. Anang Polyfil Pvt. Ltd., the Court held that the Appellate Tribunal was not right in directing the Income-tax Officer to allow depreciation at the rate of 30% on the diesel generating set. This question was answered in the negative, in favour of the revenue and against the assessee. On the second issue, applying the ratio of Allied Motors (P) Ltd. vs. CIT, the Court held that the Appellate Tribunal was right in deleting the addition of Rs. 39,441.31 in respect of unpaid sales tax liability by invoking Section 43B. This question was answered in the affirmative, 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?

The Tribunal had to decide two questions of law: 1. Whether the Appellate Tribunal is right in law and on facts in directing the Income-tax Officer to allow depreciation at the rate of 30% on a diesel generating set, concerning Section 32 of the Income Tax Act, 1961. 2. Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 39,441.31 in respect of unpaid sales tax liability by invoking the provisions of Section 43B of the Income Tax Act, 1961. The revenue, through its counsel, conceded that the issue regarding depreciation on the diesel generating set was concluded in its favour by this Court's decision in CIT vs. Anang Polyfil Pvt. Ltd. (2004) 267 ITR 266. Regarding the second issue, the revenue acknowledged that the matter concerning the invocation of Section 43B for unpaid sales tax liability was concluded against the revenue by the Supreme Court's decision in Allied Motors (P) Ltd. vs. CIT (1997) 224 ITR 677. The assessee's contentions were not recorded as they did not appear.

Which sections of the Income-tax Act were involved?

Section 32,Section 43B,Section 256(1)

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 187 of 1993 For Approval and Signature: THE HON'BLE MR.JUSTICE D.A.MEHTA HON'BLE 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 of any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? =========================================================== COMMISSIONER OF INCOME-TAX - Petitioner(s) Versus NACHMO MARKETING PVT. LTD. - Respondent(s) =========================================================== Appearance : MRS.M.M.BHATT  for Petitioner No(s).: 1. None for Respondent No(s).: 1. =========================================================== CORAM :THE HON'BLE MR.JUSTICE D.A.MEHTA HON'BLE MS.JUSTICE H.N.DEVANI Date : 21/06/2005

2 ORAL JUDGMENT (Per : HON'BLE MS.JUSTICE H.N.DEVANI) 1 The Income Tax Appellate Tribunal, Ahmedabad Bench  'C'  has

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