COMMISSIONER OF INCOME TAX vs. RAMILABEN S. BACHKANIWALA

ITA/295/1999HC GujaratGJHC24025034199928 September 1999Author: HONOURABLE MR. JUSTICE B.C.PATEL,HONOURABLE MR. JUSTICE P.B.MAJMUDAR2 pages
AI SummaryDismissed

What were the facts?

The Commissioner of Income-tax, Surat, filed an application under section 256(2) of the Income-tax Act, 1961, requesting the High Court of Gujarat to direct the Income Tax Appellate Tribunal (ITAT) to make a reference on two questions of law. The assessee is Ramilaben S. Bachkaniwala. The application challenges the ITAT's decision regarding the assessment year(s) which are not explicitly stated. The core dispute revolves around the ITAT's justification in accepting the assessee's version of the average cost of colour and chemicals and its decision on an addition of Rs.11,23,572 in a block assessment.

What did the High Court hold?

The High Court rejected the application for reference. Regarding Question No. 2, the Court noted that the Tribunal had already rejected a similar application based on this question, citing the High Court's own decision in N.R. PAPER & BOARDS LTD. reported in 234 ITR page 733. Therefore, the Tribunal was justified in rejecting the application on this point. For Question No. 1, the Tribunal had held the cost of colour and chemicals as reasonable based on the paperbook submitted by the assessee, which was also before the Assessing Officer. The High Court found no violation of Rule 10 or Rule 29 of the ITAT Rules. It was noted that the Departmental Representative had not raised specific objections, although time was sought. The High Court concluded that the Tribunal had decided this question on facts, and thus, the application for reference was rejected. No specific issue was left undecided.

What were the issues?

The High Court was asked to decide two questions of law: 1. Whether, on the facts and in the circumstances of the case and in law, the ITAT was justified in relying on the assessee's version of the average cost of colour and chemicals at Rs.2.68, allegedly in violation of Rules 10 & 29 of the IT Act rules, without observing the required formalities to draw an inference contrary to the facts on record. 2. Whether, on the facts and in the circumstances of the case and in law, the ITAT was justified in holding that an addition of Rs.11,23,572 could not be made in the block assessment by inferring from the seized materials. Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The revenue, through the Commissioner of Income-tax, argued that the ITAT erred in accepting the assessee's cost of colour and chemicals without adhering to Rules 10 & 29 of the IT Act rules. The revenue also questioned the ITAT's decision to disallow an addition of Rs.11,23,572 in the block assessment based on seized materials.

Which sections of the Income-tax Act were involved?

Section 256(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX APPLICATION No 295 of 1999

For Approval and Signature:

Hon'ble MR.JUSTICE B.C.PATEL and Hon'ble MR.JUSTICE P.B.MAJMUDAR ============================================================ 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 1 to 5 No

The order continues below.

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