PATEL CHEMICAL WORKS vs. COMMISSIONER OF INCOME TAX

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ITR/220/1989HC GujaratGJHC24012998198914 July 2003Author: HONOURABLE MR. JUSTICE ANIL R. DAVE2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court, per Mr. Justice A.R. Dave, answered the referred question in the affirmative, meaning in favor of the revenue and against the assessee. The reasoning provided by the court was based on the submission made by the assessee's advocate. The advocate stated that a similar question for the same assessee and the Assessment Year 1982-83 had already been decided by the High Court in I.T.R. No. 157 of 1989, and that decision was in favor of the revenue and against the assessee. Therefore, following the precedent set in the earlier case, the court found no reason to deviate and disposed of the reference accordingly. The operative direction was to answer the question in favor of the revenue. No issue was expressly left undecided.

What were the facts?

This case involves an Income Tax Reference filed by the assessee, Patel Chemical Works, against the Commissioner of Income Tax. The reference was made at the instance of the assessee to the High Court of Gujarat at Ahmedabad by the Income Tax Appellate Tribunal, Ahmedabad Bench 'C', under Section 256(2) of the Income-tax Act, 1961. The core of the dispute revolves around the assessment year 1982-83. The assessee's representative argued that a similar question for the same assessee and assessment year had been previously decided by the High Court in I.T.R. No. 157 of 1989. The revenue was represented by its Senior Standing Counsel.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in finding that tax was avoided without ascertaining whether there is any revenue loss on account of non-inclusion of the income in question in the assessee's assessment and its inclusion in the assessment of the sister concerns? (Question of law turning on the interpretation of provisions related to tax avoidance and assessment of income). Assessee's Contention: The assessee's advocate submitted that a similar question for the same assessee and assessment year 1982-83 had already been decided by the High Court in I.T.R. No. 157 of 1989 in favor of the revenue and against the assessee. Revenue's Contention: The judgment does not record any specific arguments made by the revenue's counsel. However, the fact that the court answered the question in favor of the revenue implies the revenue's position was upheld.

Which sections of the Income-tax Act were involved?

Section 256(2)

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 220 of 1989

For Approval and Signature:

Hon'ble MR.JUSTICE A.R.DAVE and Hon'ble MR.JUSTICE A.M.KAPADIA

============================================================ 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?

-------------------------------------------------------------- PATEL CHEMICAL WORKS Versus COMMISSIONER OF INCOME TAX -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 220 of 1989 MR JP SHAH for Petitioner No. 1 MR MANISH R BHATT for Respondent No. 1

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

CORAM : MR.JUSTICE A.R.DAVE and MR.JUSTICE A.M.KAPADIA

Date of decision: 14/07/2003

ORAL JUDGEMENT

(Per : MR.JUSTICE A.R.DAVE)

At the instance of the assessee, the following question has been referred to this court for its opinion by the Income Tax Appellate Tribunal, Ahmedabad Bench 'C' under the provisions of sec. 256(2) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in finding that tax was avoided without ascertaining whether there is any revenue loss on account of non-inclusion of the income in question in the assessee's assessment and its inclusion in the assessment of the sister concerns?"

2.

Learned advocate Shri J.P. Shah has appeared for the applicant-assessee whereas Sr. Standing Counsel Shri M.R. Bhatt has appeared for the respondent-revenue.

3.

The learned advocates have submitted that for the same assessee, for the Assessment Year 1982-83, a similar question had arisen. The said question has already been decided by this court in I.T.R. No. 157 of 1989 in favour of the revenue and against the assessee.

4.

Looking to the aforestated fact, we answer the question referred to this court in the affirmative, i.e., in favour of the revenue and against the assessee.

The reference stands disposed of accordingly with no order as to costs.

(A.R. Dave, J.)

(hn) (A.M.Kapadia, J.)

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