COMMISSIONER OF INCOME TAX vs. ASHWINKUMAR GORDHANDAS & BROS

ITR/324/1984HC GujaratGJHC24011989198423 April 1999Author: HONOURABLE MR. JUSTICE R.BALIA,HONOURABLE MR. JUSTICE ANIL R. DAVE2 pages
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What did the High Court hold?

The High Court held that the Tribunal was correct in its conclusion that the assessee company was engaged in processing activities, and therefore, the provisions of Section 104 of the Income Tax Act, 1961, were not applicable. The Court's reasoning was based on its prior decision in the assessee's own case, reported in 212 ITR, 614 (CIT Vs. Ashwinkumar Gordhanbhai and Brothers), which had already established that the assessee's activities constituted "processing". Consequently, the question referred to the Court was answered in the affirmative, in favour of the assessee and against the Revenue. The reference was disposed of accordingly with no order as to costs. No issues were left undecided.

What were the facts?

The Income Tax Appellate Tribunal (ITAT), Ahmedabad, referred a question of law to the High Court of Gujarat concerning the assessment years 1978-79 and 1979-80. The assessee, Ashwinkumar Gordhandas & Bros, claimed that it was engaged in manufacturing and processing activities, making Section 104 of the Income Tax Act, 1961, inapplicable. The Income Tax Officer (ITO) likely disagreed, leading to an appeal. The Commissioner of Income Tax (Appeals) allowed the assessee's claim. The ITAT confirmed this decision, holding that the assessee was entitled to relief under Section 104(4)(a) of the Act. The Revenue has challenged the ITAT's order.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee company was engaged in manufacturing and processing activities and therefore the provisions of Section 104 were not applicable to the assessee? Assessee's Contention: The assessee contended that its activities constituted manufacturing and processing, thus exempting it from the provisions of Section 104. The assessee relied on the decisions of the CIT(A) and the ITAT, which supported its claim. Revenue's Contention: The Revenue argued that the assessee's activities did not qualify as manufacturing or processing, making Section 104 applicable. However, during the hearing, the Revenue's counsel conceded that the issue was covered by this Court's decision in the assessee's own case (CIT Vs. Ashwinkumar Gordhanbhai and Brothers, 212 ITR, 614), which held that the assessee's activities amounted to "processing".

Which sections of the Income-tax Act were involved?

Section 104,Section 256(1),Section 104(4)(a)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 324 of 1984

For Approval and Signature:

Hon'ble MR.JUSTICE R.BALIA. and MR.JUSTICE A.R.DAVE ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question 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?

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The order continues below.

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