THE COMMISSIONER OF INCOME TAX vs. M/S LAKSHMI PRECISION SCREWS LTD.

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ITR/125/1992HC Punjab & HaryanaPHHC01021964199211 January 2008Author: MR. JUSTICE SATISH KUMAR MITTAL,MR JUSTICE RAKESH KUMAR GARG2 pages
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What did the High Court hold?

The High Court held that the question of law referred to it is squarely covered in favour of the assessee by the Supreme Court's decision in Surana Steels Pvt. Ltd. v. Deputy Commissioner of Income Tax and others, 237 ITR 777. Consequently, the Court answered the aforesaid question of law against the Revenue and in favour of the Assessee. The principle established is that if a matter is conclusively decided by the Supreme Court, the High Court will follow that precedent. The operative direction was to dispose of the reference accordingly, answering the question against the Revenue.

What were the facts?

The Commissioner of Income Tax, Haryana, Rohtak (Revenue) has filed an Income Tax Reference (ITR) No. 125 of 1992 before the High Court of Punjab and Haryana at Chandigarh. The reference arises from an order dated 14.07.1992 passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'C', in ITA No. 2170/Del/1991, pertaining to the Assessment Year 1989-90. The dispute concerns the calculation of income assessable under Section 115J of the Income-tax Act, 1961. The ITAT directed the Assessing Officer to deduct Rs. 56,40,387/- from Rs. 1,45,70,811/- and then consider 30% of the resultant figure as taxable income.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Hon'ble Income-tax Appellate Tribunal is right in law in directing the Assessing Officer to deduct an amount of Rs. 56,40,387/- from the figure of Rs. 1,45,70,811/- and on the resultant figure deem 30% thereof to be the income assessable under section 115J of the Income-tax Act, 1961? Assessee's Contention: The assessee argued that the question of law referred to the High Court is squarely covered in its favour by the decision of the Supreme Court in Surana Steels Pvt. Ltd. v. Deputy Commissioner of Income Tax and others, 237 ITR 777. Revenue's Contention: The learned counsel for the Revenue was unable to controvert the factual and legal position presented by the assessee.

Which sections of the Income-tax Act were involved?

Section 115J

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

DATE OF DECISION : 11.01.2008 The Commissioner of Income Tax Haryana, Rohtak .... APPLICANT-REVENUE Versus M/s Laxmi Precision Screws Ltd., Hisar Road, Rohtak ..... RESPONDENT-ASSESSEE CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTAL HON'BLE MR. JUSTICE RAKESH KUMAR GARG

Present: Mr. Yogesh Putney, Advocate, for the Revenue. Mr. Akshay Bhan, Advocate, for the Assessee.

* * * SATISH KUMAR MITTAL, J. ( Oral ) The following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Delhi Bench `C', New Delhi, arising out of its order dated 14.7.1992 in ITA No. 2170/Del/1991, Assessment Year 1989-90 : “Whether on the facts and in the circumstances of the case the Hon'ble Income-tax Appellate Tribunal is right in law in directing the Assessing Officer to deduct an amount of Rs.56,40,387/- from the figure of Rs. 1,45,70,811/- and on the -2- resultant figure deem 30% thereof to be the income assessable under section 115J of the Income-tax Act, 1961 ?”

Learned counsel for the Assessee submits that the question of law referred to this Court is squarely covered in favour of the Assessee by the decision of the Supreme Court in Surana Steels Pvt. Ltd. v. Deputy Commissioner of Income Tax and others, 237 ITR 777 (supra). Learned counsel for the Revenue is unable controvert this factual and legal position. Hence, in view of the decision of the Supreme Court in Surana Steels Pvt. Ltd. v. Deputy Commissioner of Income Tax and others, 237 ITR 777 (supra), the aforesaid question of law referred to this Court, is answered against the Revenue and in favour of the Assessee. The question referred is answered against the Revenue and in favour of the Assessee. Reference is disposed of accordingly. ( SATISH KUMAR MITTAL ) JUDGE January 11, 2008 ( RAKESH KUMAR GARG ) ndj JUDGE

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