COMMISSIONER OF INCOME TAX vs. EIMCO ELECON (INDIA) LTD.

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ITA/250/1999HC GujaratGJHC24024989199907 August 2002Author: HONOURABLE MR. JUSTICE MOHIT S. SHAH,HONOURABLE MR. JUSTICE K.A.PUJ2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Gujarat considered the question proposed by the Revenue. The Court noted that this issue had recently been considered by them in Income-tax Reference No. 110 of 1995, which was decided on July 26, 2002. In view of that prior decision, the High Court held that the question proposed by the Revenue did not survive. Consequently, the application filed by the Revenue was rejected. The operative direction was to reject the application and discharge the rule. The Court did not explicitly state the ratio decidendi of the earlier judgment, but it implied that the earlier judgment was against the Revenue's contention.

What were the facts?

The Commissioner of Income Tax (CIT) invoked Section 263 of the Income Tax Act, 1961, to revise an assessment order. The CIT directed the Assessing Officer (AO) to modify the assessment, considering the liability of unpaid sales tax shown in the balance sheet as sales tax deferment. The CIT sought to invoke Section 43B of the Act, despite no amendment in the Sales Tax Act. The assessee, Eimco Elecon (India) Ltd., challenged this revision before the Income Tax Appellate Tribunal (ITAT). The ITAT set aside the order passed by the CIT under Section 263. The Revenue (Commissioner of Income Tax) has filed an application before the High Court of Gujarat proposing a question of law for determination.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in setting aside the order passed by the Commissioner of Income Tax under section 263 of the Act, whereby he directed the Assessing Officer to modify the assessment order considering the liability of unpaid sales tax as appearing in the balance sheet which was shown on account of sales tax deferment, invoking the provisions of section 43B, in absence of amendment in the Sales Tax Act? The Revenue contended that the Tribunal erred in setting aside the CIT's order, which sought to bring to tax the unpaid sales tax deferment under Section 43B. The Revenue argued that the liability for sales tax, even if deferred, should be considered for deduction under Section 43B. The judgment does not record any specific arguments made by the assessee before the High Court, other than the fact that the rule was served on them.

Which sections of the Income-tax Act were involved?

Section 263,Section 43B

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX APPLICATION No 250 of 1999

For Approval and Signature:

Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE K.A.PUJ

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO 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 concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus EIMCO ELECON (INDIA) LTD. -------------------------------------------------------------- Appearance: 1. INCOME TAX APPLICATION No. 250 of 1999 MR MANISH R BHATT for Petitioner No. 1 RULE SERVED for Respondent No. 1

--------------------------------------------------------------

CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE K.A.PUJ

Date of decision: 07/08/2002

ORAL JUDGEMENT (Per : MR.JUSTICE K.A.PUJ)

The revenue has proposed the following question

for determination of this Court :-

"Whether, the Appellate Tribunal is right in law and on facts in setting aside the order passed by the Commissioner of Income Tax under section 263 of the Act whereby he directed the Assessing Officer to modify the assessment order considering the liability of unpaid sales tax as appearing in the balance sheet which was shown on account of sales tax deferment invoking the provisions of section 43B, in absence of amendment in the Sales Tax Act ?"

2.

The issue raised by the revenue while proposing the aforesaid question has recently been considered by us in Income-tax Reference No. 110 of 1995 which is decided on 26.7.2002. In view of the said decision, the question proposed by the revenue does not survive and hence, this application is rejected.

Rule is discharged with no order as to costs.

(M.S. Shah, J.) (K.A. Puj, J.)

sundar/-

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