COMMISSIONER OF INCOME-TAX vs. MAZDA AUTO CHANNELS PVT. LTD.

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ITR/211/1990HC GujaratGJHC24013397199013 April 1998Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE KUNDAN SINGH3 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. (224 ITR 677). This Supreme Court decision approved the High Court's own view in C.I.T vs. Chandulal Venechand (209 ITR 7). In Chandulal Venechand's case, the High Court had interpreted Section 43-B of the Income Tax Act, holding that the proviso related back to the commencement of Section 43-B (April 1, 1984). Consequently, a liability would be allowable as a deduction if it was discharged by actual payment before the due date for furnishing the return of income under Section 139(1) for the relevant previous year in which the liability was incurred. Therefore, the High Court answered the referred question in the affirmative, in favour of the assessee and against the Revenue. The reference was disposed of accordingly.

What were the facts?

This case involves an Income Tax Reference filed by the Commissioner of Income-tax (Revenue) against Mazda Auto Channels Pvt. Ltd. (Assessee). The reference was made by the Income Tax Appellate Tribunal, Ahmedabad, to the High Court of Gujarat. The core issue revolves around the deductibility of sales tax paid as the last installment before the due date of filing the income tax return. The Revenue is challenging the order of the Tribunal which upheld the order of the CIT (Appeals), allowing the deduction. The procedural history indicates that the Tribunal referred a specific question of law to the High Court for its opinion.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in dismissing the departmental appeal and confirming the C.I.T (Appeals)'s order holding that if the amount is in respect of the last installment of sales-tax and is paid before the due date of filing of the return, the deduction has to be allowed? Assessee's Contentions: The judgment does not record specific contentions made by the assessee. The decision relies on established legal precedents. Revenue's Contentions: The Revenue, through the Commissioner of Income-tax, is challenging the Tribunal's decision that allowed the deduction for sales tax paid as the last installment before the return filing due date. The Revenue's appeal to the Tribunal was dismissed, leading to this reference.

Which sections of the Income-tax Act were involved?

Section 43-B,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. 211 of 1990

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? 1 to 5 : NO ---------------------------------------------------------- COMMISSIONER OF INCOME-TAX Versus MAZDA AUTO CHANNELS PVT. LTD. ---------------------------------------------------------- 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, on the facts and in the circumstances of the case, the Tribunal was right in law in dismissing the departmental appeal and confirming the C.I.T (Appeals)'s order holding that if the amount is in respect of the last instalment of sales-tax and is paid before the due date of filing of the return, the deduction has to be allowed ?" 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.

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Prakash* tive in favour of the assessee and against the Revenue. Assessee and against The Reference stands disposed of order as to costs.

13.4.

98 Prvt. Secy 13.4.1998 Prvt. Secretary to Hon'ble Judge tive in favour of the assessee and against the Revenue. Assessee and against The Reference stands disposed of order as to costs.

13.4.

98 Pvt.Secy. 13.4.1998 Pvt. Secretary to to Hon'ble Judge Hon'ble Judge tive in favour of the assessee and against the Revenue. Assessee and against The Reference stands disposed of order as to costs.

13.4.

98 Prvt. Secy. 13.4.1998 Prvt. Secretary to Hon'ble Judge to Hon'ble Judge tive in favour of the assessee and against the Revenue. Assessee and against The Reference stands disposed of order as to costs.

13.4.

98 Prvt. Secy. 13.4.1998 Prvt. Secretary to Hon'ble Judge to Hon'ble Judge

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