COMMISSIONER OF INCOME TAX vs. RAPICUT CARBIDES LTD.

ITA/277/1999HC GujaratGJHC24025016199901 September 1999Author: HONOURABLE MR. JUSTICE C.K.THAKKER,HONOURABLE MR. JUSTICE A.L.DAVE2 pages
AI SummaryDismissed

What were the facts?

The Commissioner of Income Tax (Revenue) filed an application under Section 256(2) of the Income Tax Act, 1961, before the High Court of Gujarat at Ahmedabad. The application sought to refer three questions of law for the opinion of the High Court, arising from an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had upheld the Commissioner of Income Tax (Appeals)'s order, which had deleted certain disallowances and additions made by the Assessing Officer. The disputed amounts were Rs. 2,02,549/- on account of excess consumption of raw materials, Rs. 51,526/- on account of Modvat credit, and Rs. 15,280/- for licence fee paid for an increase in authorised share capital. The Revenue's earlier application under Section 256(1) to the Tribunal for referring these questions was rejected.

What did the High Court hold?

The High Court dismissed the Revenue's application for reference. The Court found that the first question concerning the disallowance on account of excess consumption of raw materials was essentially a matter of appreciation of evidence and a finding of fact arrived at by the Tribunal. Therefore, it did not raise a substantial question of law. Regarding the second question on Modvat credit and the third question on licence fee, the Court noted that these issues had already been concluded by previous decisions of the High Court itself. Specifically, the second question was covered by the decision in CIT vs. Nirma Detergent Private Limited, and the third question was covered by the decision in Alembic Glass Industries vs. CIT. Consequently, the High Court was of the opinion that no question arose for its opinion and accordingly dismissed the application. No directions were issued to the Tribunal, and no relief was granted to the Revenue.

What were the issues?

The High Court had to decide whether to direct the Tribunal to refer the following questions for its opinion: 1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in upholding the Commissioner of Income Tax (Appeals)'s order deleting the disallowance of Rs. 2,02,549/- made on account of excess consumption of raw materials (Section 37 of the Income Tax Act). 2. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in upholding the Commissioner of Income Tax (Appeals)'s order deleting the addition of Rs. 51,526/- made on account of Modvat credit (Section 295 of the Income Tax Act, relating to rules for computation of income). 3. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in upholding the Commissioner of Income Tax (Appeals)'s order deleting the addition for licence fee of Rs. 15,280/- paid to the Registrar of Companies for an increase in the authorised share capital (Section 37 of the Income Tax Act). Revenue's Contentions: The Revenue sought to refer these questions to the High Court for its legal opinion. Assessee's Contentions: Not recorded in the judgment. Tribunal's Reasoning for Rejection (as stated by the Revenue): Question 1 was based on appreciation of facts. Question 2 was concluded by this Court's decision in CIT vs. Nirma Detergent Private Limited. Question 3 was covered by this Court's decision in Alembic Glass Industries vs. CIT.

Which sections of the Income-tax Act were involved?

Section 256(1),Section 256(2),Section 37

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX APPLICATION No 277 of 1999

For Approval and Signature:

Hon'ble MR.JUSTICE C.K.THAKKER and MR.JUSTICE A.L.DAVE ============================================================ 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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