COMMISSIONER OF INCOME-TAX vs. ASHWINKUMAR GORDHANBHAI & BROS. PVT LTD.

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ITR/58/1984HC GujaratGJHC24011733198423 June 1998Author: HONOURABLE MR. JUSTICE C.K.THAKKER,HONOURABLE MR. JUSTICE M.C.PATEL2 pages

AI SummaryAllowed

What did the High Court hold?

The High Court held that the question referred in the present Reference had to be answered in the affirmative and in favour of the assessee. This decision was based on following the High Court's own prior judgment in Commissioner of Income Tax v. Ashwinkumar Gordhanbhai and Bros Pvt. Ltd. (1995 ITR 614), which had decided an identical issue in favour of the assessee for previous assessment years. The revenue's counsel did not dispute this precedent. Therefore, the Tribunal was considered right in law in holding that the assessee company was engaged in manufacturing processing activities and was entitled to the benefit of concessional tax treatment as an 'Industrial Company'. The operative direction was to answer the question in favour of the assessee. No costs were awarded.

What were the facts?

This case involves an Income Tax Reference made by the Revenue (Commissioner of Income-Tax) at the instance of the Income Tax Appellate Tribunal, Ahmedabad Bench. The assessee is Ashwinkumar Gordhanbhai & Bros. Pvt. Ltd. The reference concerns the assessment year(s) not explicitly stated but implied to be subsequent to previous assessment years. The order or action under challenge is the Tribunal's decision that the assessee company was engaged in manufacturing processing activities and thus entitled to concessional tax treatment as an 'Industrial Company'. The procedural history involves a prior decision by the High Court of Gujarat in a similar reference for previous assessment years.

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 processing activities and therefore entitled to the benefit of concessional treatment of tax as an 'Industrial Company'? (Question of law) Assessee's Contention: The assessee argued that an identical question was answered in their favour by the High Court of Gujarat in the case of Commissioner of Income Tax v. Ashwinkumar Gordhanbhai and Bros Pvt. Ltd., reported in 1995 ITR 614, concerning previous assessment years. The assessee relied on this precedent. Revenue's Contention: The learned counsel for the revenue did not dispute the position that the identical question was decided in favour of the assessee in the previous High Court decision.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 58 of 1984

For Approval and Signature:

Hon'ble MR.JUSTICE C.K.THAKKER and MR.JUSTICE M.C.PATEL ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

To be referred to the Reporter or not?

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

Whether this case involves a substantial question 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?

-------------------------------------------------------------- COMMISSIONER OF INCOME-TAX Versus ASHWINKUMAR GORDHANBHAI & BROS. PVT LTD. -------------------------------------------------------------- Appearance: MR MANISH R BHATT for Petitioner MR MANISH J.SHAH FOR MR.JP SHAH for Respondent No. 1

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

CORAM : MR.JUSTICE C.K.THAKKER and MR.JUSTICE M.C.PATEL Date of decision: 23/06/98

ORAL JUDGEMENT (per M.C.Patel J.)

This reference is made by the Income Tax Appellate Tribunal, Ahmedabad Bench at the instance of the Revenue. The following question has been referred for the opinion of the High Court.

"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 processing activities and therefore entitled to the benefit of concessional treatment of tax as an `Industrial Company' ? "

The learned counsel for the Assessee submitted that the said question was answered in favour of the assessee by this court in Commissioner of Income Tax v. Ashwinkumar Gordhanbhai and Bros Pvt. Ltd. 1995 ITR 614 in respect of the previous assessment years. In the said decision the question referred for the opinion of the High Court was as follows:

"(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, should be charged to tax at the rate of 55 per cent.?

Thus, it is clear that identical question was decided in favour of the assessee. Learned counsel for the revenue does not dispute this position.

The result is that the questin referred in the present Reference has to be answered in the affirmative and in favour of the assessee following the said decision. The question is, therefore, answered in favour of the Assessee. No order as to costs.

Dt.23.6.1998. (C.K.THAKKER J.)

(M.C.PATEL J.)

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