COMMISSIONER OF INCOME TAX vs. CIBATUL LIMITED

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ITR/199/1985HC GujaratGJHC24012330198521 November 2000Author: HONOURABLE THE CHIEF JUSTICE MR. JUSTICE D.M.DHARMADHIKARI,HONOURABLE MR. JUSTICE MOHIT S. SHAH2 pages

AI SummaryAllowed

What did the High Court hold?

The High Court of Gujarat, per Mr. Justice M.S. Shah, answered the referred question in the affirmative, in favour of the assessee and against the Revenue. The Court noted that both the assessee's and the Revenue's counsel stated that the controversy had already been resolved by this Court's decision in CIT vs. Ahmedabad Manufacturing and Calico Printing Co., 197 ITR 538. Consequently, the Reference was disposed of in accordance with this precedent. The ratio decidendi is that where a specific issue has been authoritatively decided by the High Court, subsequent references on the same issue should follow that precedent. The operative direction was to answer the question in favour of the assessee, and the Reference was disposed of.

What were the facts?

This case involves an Income Tax Reference filed by the Revenue concerning the assessment year 1978-79. The reference pertains to a decision of the Income Tax Appellate Tribunal (ITAT) which confirmed the view of the Commissioner of Income Tax (Appeals) (CIT(A)). The dispute centers on whether the assessee, Cibatul Limited, was entitled to a deduction of Rs. 54,997/- on account of guest house expenses. The High Court of Gujarat was asked to provide its opinion on this specific question.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal has been right in law in confirming the view taken by the CIT (Appeals) in holding that the assessee was entitled to deduction of amount of Rs. 54,997/- on account of guest house expenses? Assessee's Contention: The assessee's counsel, Mr. Shah, did not present specific arguments but indicated that the controversy was resolved by a prior decision of the High Court. Revenue's Contention: The Revenue's counsel, Mr. Naik, also did not present specific arguments, acknowledging that the issue had been settled by a previous judgment of the High Court.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 199 of 1985

For Approval and Signature:

Hon'ble CHIEF JUSTICE MR DM DHARMADHIKARI and Hon'ble MR.JUSTICE M.S.SHAH

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

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?

Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus CIBATUL LIMITED -------------------------------------------------------------- Appearance: MR B B Naik with Mr RP BHATT for Petitioner MR M. J. SHAH for Respondent No. 1

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

CORAM : CHIEF JUSTICE MR DM DHARMADHIKARI and MR.JUSTICE M.S.SHAH

Date of decision: 21/11/2000

ORAL JUDGEMENT (Per : MR.JUSTICE M.S.SHAH)

In this Reference at the instance of the Revenue, the following question is referred to us for our opinion in respect of the assessment year 1978-79:

"Whether, on the facts and in the circumstances of the case, the income tax appellate tribunal has been right in law in confirming the view taken by the CIT (appeals) in holding that the assessee was entitled to deduction of amount of Rs. 54,997/- on account of guest house expenses ?" parekh

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