JAYANT PAPER MILLS LTD. vs. COMMISSIONER OF INCOME TAX

ITR/132/1986HC GujaratGJHC24010756198610 July 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages
AI SummaryDismissed

What were the facts?

This case involves an Income Tax Reference filed by Jayant Paper Mills Ltd. (the assessee) against the Commissioner of Income Tax (the revenue) before the High Court of Gujarat. The reference was made at the instance of the assessee, seeking the court's opinion on two questions of law referred by the Income Tax Appellate Tribunal, Ahmedabad Bench 'A'. The assessment years are not explicitly stated. The core of the dispute revolves around the disallowance of a sum of Rs. 31,066 paid to ICICI due to foreign exchange rate differences upon loan repayment, and the denial of extra shift depreciation allowance of Rs. 67,974 on electrical installations. The High Court reviewed the questions and noted that they had been previously answered by the court.

What did the High Court hold?

The High Court, per Mr. Justice A.R. Dave, disposed of the reference by answering both questions in the affirmative, in favour of the revenue and against the assessee. For the first question concerning the disallowance of Rs. 31,066 paid to ICICI due to foreign exchange rate differences, the Court relied on its prior decision in Ambica Mills Ltd. v. Commissioner of Income Tax, 235 I.T.R. 264, and held that the sum was not allowable as a deduction. For the second question regarding extra shift depreciation allowance of Rs. 67,974 on electrical installations, the Court followed its own judgment in Commissioner of Income Tax v. Kiran Crimpers, 225 I.T.R. 84, and ruled that the assessee was not entitled to the allowance. The reference was disposed of accordingly with no order as to costs.

What were the issues?

The Tribunal had to decide two questions referred by the assessee: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that a sum of Rs. 31,066, paid to ICICI at the time of instalment repayment on account of foreign exchange rate differences, is not allowable as a deduction in determining the total income? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is not entitled to extra shift depreciation allowance of Rs. 67,974 in respect of electrical installations? Assessee's Contentions: The assessee sought to have these questions answered in their favour, implying they believed the Tribunal erred in its disallowances. Specific arguments for the assessee are not detailed in the judgment. Revenue's Contentions: The revenue, through its advocate, would have supported the Tribunal's findings. Specific arguments for the revenue are not detailed in the judgment.

Which sections of the Income-tax Act were involved?

Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 132 of 1986

For Approval and Signature:

Hon'ble MR.JUSTICE A.R.DAVE and Hon'ble MR.JUSTICE D.A.MEHTA

============================================================ 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 Civil Judge? : NO

The order continues below.

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