CIT AMRITSAR vs. M/S AMRITSAR TRANSPORT CO.P.LT

PDF · subscribers
ITR/40/1998HC Punjab & HaryanaPHHC01038013199810 December 2008Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE L.N. MITTAL3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the Tribunal was right in law in holding that the realization of Rs.3,79,729/- as charity did not constitute a trading receipt and was not assessable to tax for the assessment year 1980-81. The Court noted that the revenue's counsel conceded that the issue was covered against the revenue by the High Court's own previous judgment in CIT, Amritsar v. Gheru Lal Bal Chand, (1978) 111 ITR 134. The Tribunal's reliance on the Supreme Court judgment in M/s Bijli Cotton Mills Private Limited, 116 ITR 60, was implicitly affirmed. The ratio decidendi is that amounts collected as charity, which are not trading receipts, are not taxable as income. The reference was answered in favor of the assessee, and the appeal was disposed of accordingly.

What were the facts?

The Income Tax Appellate Tribunal (ITAT), Amritsar, passed an order on December 14, 1984, in ITA No.130(ASR)/1984. The Commissioner of Income Tax (CIT), Amritsar, sought a reference to the High Court under Section 256(2) of the Income Tax Act, 1961, following a Supreme Court order. The dispute pertains to the assessment year 1980-81. The Assessing Officer had taxed an amount of Rs. 3,79,729 realized by the assessee, M/s Amritsar Transport Co. Pvt. Limited, from its customers and credited to a 'Dharmada account'. The CIT(Appeals) had ruled in favor of the assessee, a decision affirmed by the ITAT. The ITAT relied on a Supreme Court judgment in support of its finding.

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 realization of Rs.3,79,729/- as charity in the bills did not constitute a Trading Receipt and was not assessable to tax in the assessment year 1980-81? Assessee's contentions: The assessee argued that the amount collected as charity was not a trading receipt and therefore not taxable. The Tribunal relied on the Supreme Court judgment in M/s Bijli Cotton Mills Private Limited, 116 ITR 60, which held that amounts received as charity could not be treated as income. Revenue's contentions: The revenue's counsel fairly stated that the matter was covered against the revenue by a judgment of the High Court in CIT, Amritsar v. Gheru Lal Bal Chand, (1978) 111 ITR 134.

Which sections of the Income-tax Act were involved?

Section 256(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 10.12.2008 The Commissioner of Income Tax, Amritsar -----Applicant Vs. M/s Amritsar Transport Co.P Limited, Amritsar --Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE L.N.MITTAL Present: Ms.Naveender P.K.Singh, Sr.Standing counsel for the revenue. None for the assessee. Adarsh Kumar Goel,J.

1.

The Income Tax Appellate Tribunal, Amritsar has referred the following question for opinion of this Court under section 256(2) of the Income Tax Act, 1961 (in short, ‘the Act’), arising out of its order dated 14.12.1984 in ITA No.130(ASR)/ 1984, in compliance of order of the Hon’ble Supreme Court dated 5.8.1997 in CA No.5334 of 1995 in the case of CIT v. Amritsar Transport Co.:- “Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the realisation of Rs.3,79,729/- as charity in the bills did not constitute a Trading Receipt and was not assessable to tax in the assessment year 1980-81?”

2.

During assessment, the Assessing Officer assessed amount received by the assessee towards charity from its customers. The amount was credited to ‘Dharmada account’. On appeal, the CIT(Appeals) upheld the plea of the assessee, which view was affirmed by the Tribunal. The Tribunal relied upon judgment of the Hon’ble Supreme Court in M/s Bijli Cotton Mills Private Limited, 116 ITR 60, holding that amount received as charity could not be treated as income.

3.

Learned counsel for the revenue fairly stated that the matter is covered against the revenue by judgment of this Court in CIT, Amritsar v. Gheru Lal Bal Chand, (1978) 111 ITR 134. 4. In view of above, the question referred is answered against the revenue and in favour of the assessee.

5.

The reference is disposed of accordingly. (Adarsh Kumar Goel) Judge December 10, 2008 (L.N.Mittal) ‘gs’ Judge

More judgments on Section 256(2)

All 253 judgments and leading authorities on Section 256(2) →

Recent GST High Court judgments

Search GST case law →