THE COMMISSIONER OF INCOME TAX,PATIALA vs. M/S.ROSHAN LAL OIL MILLS LTD.,BATHINDA

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ITC/16/1999HC Punjab & HaryanaPHHC01038430199911 October 2010Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court, in its decision dated 11.10.2010, heard the learned counsel for the revenue. The Court found no error in the view taken by the CIT(A) and the Tribunal. The Court noted that the ITAT had upheld the CIT(A)'s finding that the amount deposited in the joint bank account had gone out of the assessee's control and was transferred to the Municipal Committee, with receipts issued. Therefore, the Court did not find it necessary to direct the Tribunal to refer the proposed questions of law. The application filed by the revenue was dismissed. The specific issue of whether the octroi was deposited in the relevant previous year was not explicitly addressed in the High Court's reasoning, but the overall dismissal implies agreement with the lower authorities' findings.

What were the facts?

The Commissioner of Income Tax, Patiala (Revenue) filed an application under Section 256(1) of the Income Tax Act, 1961, seeking a reference of questions of law to the High Court arising from an order of the Income Tax Appellate Tribunal (ITAT), Amritsar Bench. The assessment year in question is 1985-86. The assessee, M/s Roshan Lal Oil Mills (P) Limited, Bathinda, claimed a deduction for octroi duty deposited in a joint bank account. The Assessing Officer disallowed this deduction, holding it was not paid as per Section 43B. The CIT(A) allowed the deduction, finding that the amount had gone out of the assessee's control and was transferred to the Municipal Committee. The ITAT upheld the CIT(A)'s order.

What were the issues?

The Tribunal had to decide the following questions of law: 1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in allowing deduction of octroi which was not deposited during the previous year relevant to the assessment year under consideration? 2. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in holding that depositing the amount in a joint bank account amounts to payment, whereas it is in the form of security and not payment? Contentions: Revenue: Argued that the ITAT was wrong in allowing the deduction of octroi not deposited in the relevant previous year and in holding that deposit in a joint account constitutes payment, considering it as security. Assessee: No arguments recorded for the assessee as none appeared.

Which sections of the Income-tax Act were involved?

Section 43B,Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of decision: 11.10.2010 The Commissioner of Income Tax, Patiala -----Petitioner Vs. M/s Roshan Lal Oil Mills (P) Limited, Bathinda ----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Ms. Savita Saxena, Advocate for the revenue. None for the respondent.

Adarsh Kumar Goel,J.

1.

This application has been filed under section 256(1) of the Income Tax Act, 1961 (for short, ‘the Act’) for directing Income Tax Appellate Tribunal, Amritsar Bench, Amritsar to refer following questions of law for opinion of this Court, arising out of its order dated 30.4.1998 in ITA No.1306/Amritsar/91, for the assessment year 1985-86:- “i) Whether, on the facts and in the circumstances of the case, the ITAT was right in law in allowing deduction of octroi which was not deposited during the previous year relevant to the assessment year under consideration?

ii) Whether, on the facts and in the circumstances of the case, the ITAT was right in law in holding that depositing the amount in joint bank account tantamounts to payment whereas it is in the form of security and not payment?

2.

The assessee claimed deduction in respect of octroi duty paid to the Municipality which was deposited in a joint account. The Assessing Officer disallowed the deduction by holding that the amount deposited in joint account cannot be held to have been paid as per Section 43B of the Act. On appeal, the CIT(A) held that since the amount had gone from the control of the assessee, the same amounted to payment. Observations in the said order are as under:- “In the present case, the matter has become more clear since in view of the agreement dated 25.3.1991 with the Municipal Committee the amount has been actually transferred to the Municipal Committee by the Bank and receipts have been issued to the appellant. I am in agreement with the view of the learned CIT(A)-2, Jalandhar that once the amount was deposited in the Joint Bank account under the direction of the Court, amount had finally gone out of the control of the assessee. The appellant is, therefore, entitled to this deduction and the AO is directed to allow the same.”

3.

This view was upheld by the Tribunal.

4.

We have heard learned counsel for the revenue.

5.

In view of the finding referred to above, there is no error in the view taken by the CIT(A) and the Tribunal. We, thus, do not find it necessary to give direction to the Tribunal for referring the questions of law proposed on behalf of the revenue.

6.

The application is dismissed. (Adarsh Kumar Goel) Judge October 11, 2010

(Ajay Kumar Mittal) ‘gs’ Judge 3

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