COMMISSIONER OF INCOME TAX vs. JAYANT QUARRY WORKS

PDF · subscribers
ITR/320/1992HC GujaratGJHC24015660199213 April 1998Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE KUNDAN SINGH2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the question referred to it was concluded by the Supreme Court's decision in Allied Motors (P) Limited vs. C.I.T., which approved the High Court's own view in C.I.T vs. Chandulal Venechand. In Chandulal Venechand's case, the High Court had construed Section 43B to mean that its proviso related back to the date Section 43B came into operation, i.e., April 1, 1984. Therefore, a liability would be allowable as a deduction if it was discharged by actual payment before the due date for furnishing the return under Section 139(1) for the relevant previous year in which the liability was incurred. Consequently, the High Court answered the referred question in the affirmative, in favour of the assessee and against the Revenue.

What were the facts?

This case involves an Income Tax Reference No. 320 of 1992 before the High Court of Gujarat at Ahmedabad. The reference was made by the Income Tax Appellate Tribunal, Ahmedabad, under Section 256(1) of the Income Tax Act. The assessee is Jayant Quarry Works, and the revenue is the Commissioner of Income Tax. The core of the dispute revolves around the applicability of the amended provisions of Section 43B of the Income Tax Act, specifically whether they applied retrospectively from assessment year 1984-85. The procedural history indicates the Tribunal referred a question of law to the High Court for its opinion.

What were the issues?

1. Whether the Appellate Tribunal was right in law and on facts in holding that the amended provisions of Section 43B were applicable with retrospective effect from assessment year 1984-85? 2. Consequently, whether if sales tax had been paid before the due date of filing of return under Section 139(1), the provisions of Section 43B were not attracted? Assessee's Contention: The assessee, through the Tribunal's referral, implicitly argued that the amended provisions of Section 43B should be applied retrospectively from assessment year 1984-85. This would mean that if sales tax was paid before the due date for filing the return under Section 139(1), the deduction for that liability would be allowable. Revenue's Contention: The revenue, by challenging the Tribunal's order, contended that the amended provisions of Section 43B were not applicable retrospectively, or that the payment of sales tax before the due date of filing the return did not exempt the assessee from the provisions of Section 43B.

Which sections of the Income-tax Act were involved?

Section 43B,Section 139(1),Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No. 320 of 1992

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE KUNDAN SINGH

======================================================== 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?

---------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus JAYANT QUARRY WORKS ---------------------------------------------------------- Appearance: MR MIHIR JOSHI with MR M R BHATT for Petitioner SERVED BY RPAD - (N) for Respondent No. 1 ----------------------------------------------------------

CORAM : MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE KUNDAN SINGH Date of decision: 13/04/98

ORAL JUDGEMENT (Per : Abichandani, J.)

The Income Tax Appellate Tribunal, Ahmedabad has referred the following question for the opinion of this Court under Section 256 (1) of the Income Tax Act.

"Whether, the Appellate Tribunal was right in law and on facts in holding that amended provisions of Section 43B were applicable with retrospective effect i.e., from asstt. year 1984-85 and therefore if the sales tax had been paid before the due date of filing of return under Section 139 (1) the provisions of section 43B were not attracted ?" The question referred to this Court now stands concluded by the decision of Hon'ble the Supreme Court in approved by the Supreme Court. In Chandulal Venechand's case, this Court while construing the provisions of Section 43-B had taken a view that the proviso to Section 43-B of the Act related back to the date when Section 43-B came into operation i.e., April 1, 1984. It was held that such liability would therefore be allowable as a deduction provided the assessee established that it was discharged by actual payment before the date applicable in his case for furnishing the return of income under Section 139 (1) of the Act in respect of relevant previous year in which the liability had been incurred. In view of this settled legal position, the question referred to this Court is answered in the affirmative in favour of the assessee and against the Revenue. The Reference stands disposed of accordingly with no order as to costs.

****

Prakash*

More judgments on Section 43B

All 7,161 judgments and leading authorities on Section 43B →

Recent GST High Court judgments

Search GST case law →