COMMISSIONER OF INCOME TAX vs. SEN & METTENHEIMER PVT. LTD.

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ITR/275/1994HC GujaratGJHC24020351199413 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. The Supreme Court had approved the High Court's view in C.I.T. vs. Chandulal Venechand. In Chandulal Venechand, the High Court had interpreted Section 43B, including its proviso, to mean that a liability incurred would be allowable as a deduction if it was discharged by actual payment before the due date for filing the return of income under Section 139(1) for the relevant previous year. 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?

The Commissioner of Income Tax (Revenue) referred a question of law to the High Court of Gujarat at Ahmedabad concerning an order passed by the Income Tax Appellate Tribunal (ITAT). The assessee is Sen & Mettenheimer Pvt. Ltd. The specific assessment year(s) are not mentioned. The ITAT had held that no addition could be made under Section 43B of the Income Tax Act, 1961, if the return was not filed on time under Section 139(1). The Revenue challenged this finding. The procedural history involves the ITAT's decision and the subsequent reference to the High Court under Section 256(1).

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in holding that if the return is not filed under Section 139(1) on time, no addition could be made invoking the provisions of Section 43B of the Income Tax Act, 1961? (Question of law and fact, concerning Section 43B and Section 139(1)). Assessee's Contention: Not recorded. Revenue's Contention: Not recorded. The judgment states the question is referred by the Commissioner of Income Tax.

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. 275 of 1994

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 SEN & METTENHEIMER 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, the Appellate Tribunal is right in law and on facts in holding that if the unpaid for filing of the return under setion 139 (1) no addition could be made invoking the provisions of section 43B of the Income Tax Act, 1961 ?" 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*

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