COMMISSIONER OF INCOME TAX vs. SABARKANTHA DIST CO OP MILK PRODUCERS UNION LTD

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ITR/40/1986HC GujaratGJHC24010664198620 June 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the Appellate Tribunal had erred in law and on facts. The question referred was answered in the negative, meaning against the assessee and in favour of the revenue. The reasoning was based on a previous decision of the same High Court in I.T.R. No. 222/84, which dealt with a similar issue for earlier assessment years concerning the same assessee. In that prior case, the High Court had ruled in favour of the revenue, holding that unabsorbed depreciation should be set off before considering claims for deduction under Section 80P. The Tribunal's reliance on its own earlier order was thus superseded by the High Court's binding precedent. The operative direction was to answer the reference in favour of the revenue. No issue was expressly left undecided.

What were the facts?

This case involves an Income Tax Reference filed by the revenue before the High Court of Gujarat. The Income Tax Appellate Tribunal, Ahmedabad Bench 'A', had referred a question of law for the court's opinion. The assessee is Sabarkantha Dist Co Op Milk Producers Union Ltd. The dispute pertains to the assessment year(s) not explicitly stated but implied to be earlier years for which the Tribunal had decided in favour of the assessee. The revenue is challenging the Tribunal's decision regarding the order of set-off of unabsorbed depreciation against income from interest and dividend from co-operative bank and society, which was claimed as a deduction under Section 80P. The amount in dispute is Rs. 1,62,703/-. The procedural history involves a reference under Section 256(1) of the Income-tax Act, 1961.

What were the issues?

1. Whether the Appellate Tribunal has erred in law and on facts in holding that the claim of deduction under Section 80P of the Income-tax Act, 1961, for an amount of Rs. 1,62,703/-, being income from interest and dividend from a co-operative bank and co-operative society, is required to be considered before carry forward unabsorbed depreciation is set off? Assessee's contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, it is implied that the assessee argued in favour of the Tribunal's order which allowed the deduction before setting off unabsorbed depreciation. Revenue's contentions: The revenue, through its learned advocate Shri B.B. Naik, submitted that the Tribunal had relied on its own earlier order for assessment years 1976-77 and 1977-78. Crucially, the revenue pointed out that for similar earlier years, this very High Court had decided a similar issue in favour of the revenue and against the assessee in I.T.R. No. 222/84.

Which sections of the Income-tax Act were involved?

Section 80P,Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 40 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 -------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus SABARKANTHA DIST CO OP MILK PRODUCERS UNION LTD -------------------------------------------------------------- Appearance: MR BB NAIK for MR RP BHATT for Petitioner NOTICE SERVED for Respondent No. 1

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

CORAM : MR.JUSTICE A.R.DAVE and MR.JUSTICE D.A.MEHTA

Date of decision: 20/06/2001

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

At the instance of the revenue, the following question has been referred to this court for its opinion by the Income Tax Appellate Tribunal, Ahmedabad Bench 'A' under the provisions of sec. 256(1) of the Income-tax Act, 1961:

"Whether the Appellate Tribunal has not erred in law and on facts in holding that the claim of deduction under section 80P of the Income-tax Act, 1961 for an amount of Rs. 1,62,703/- being income from interest and dividend from co-operative bank and co-operative society is required to be considered before carry forward unabsorbed depreciation is set off?"

2.

Learned advocate Shri B.B. Naik has appeared for the applicant whereas, though served, nobody has appeared for the respondent assessee.

3.

It has been submitted by learned advocate Shri Naik that the Tribunal had relied upon its order passed in case of the same respondent assessee for the Assessment Years 1976-77 and 1977-78 while deciding the issue before it. It has been further submitted by the learned advocate that in case of the assessee for the earlier years in respect of which the Tribunal had decided the issue in favour of the assessee, in I.T.R. No. 222/84 this Court had decided similar issue in the negative i.e. in favour of the revenue and against the assessee.

4.

In view of the said fact, we answer the question in the negative i.e. against the assessee and in favour of the revenue.

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

(A.R. Dave, J.)

(D.A. Mehta, J.) (hn)

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