THE COMMR. OF INCOME TAX vs. M/S NATRAJ TYRES PVT. LTD.

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ITA/270/2006HC Punjab & HaryanaPHHC01074966200618 September 2007Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE M.M. KUMAR2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court noted that the assessee's counsel had placed reliance on a Division Bench judgment of the same Court in the case of The Commissioner of Income Tax, Panchkula v. M/s Chauhan Papers Pvt. Limited. The Court observed that a similar question of law had been decided in favour of the assessee and against the Revenue in that precedent. As the facts of the present case were stated to be similar to the Chauhan Papers Pvt. Ltd. case, the High Court held that the present appeal must meet the same fate. Consequently, the appeal was dismissed. The specific reasoning of the ITAT or the detailed findings on the inflated closing stock are not elaborated upon in this excerpt, as the High Court's decision is based on the precedent.

What were the facts?

The Commissioner of Income Tax, Panchkula (the Revenue) filed an appeal under Section 260A of the Income Tax Act, 1961, challenging an order dated July 18, 2005, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. The ITAT's order was in relation to ITA No. 589/Chandi/2003. The dispute pertains to the assessment year(s) not explicitly stated in the provided text. The core of the dispute involves the assessee, M/s Natraj Tyres (P) Ltd., and the Revenue's contention regarding inflated closing stock figures provided by the assessee to a bank.

What were the issues?

1. Whether, in the facts and circumstances of the case, the assessee can take advantage of inflated closing stock figures given to the Bank and at the same time disown the consequences for this assessment to income tax? (Question of law). Assessee's contention: The assessee relied on a Division Bench judgment of the Punjab and Haryana High Court in the case of The Commissioner of Income Tax, Panchkula v. M/s Chauhan Papers Pvt. Limited (ITA No.358 of 2006 decided on 12.10.2006). The assessee argued that the facts of the present case are similar to the Chauhan Papers Pvt. Ltd. case, and therefore, the appeal should be decided in favour of the assessee. Revenue's contention: The judgment does not record any specific arguments made by the revenue beyond the framing of the question of law.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

ITA No. 270 of 2006 Date of decision 18 .9 .2007 The Commissioner of Income Tax, Panchkula. ..Appellant Versus M/s Natraj Tyres (P) Ltd. Harnaul, Yamunanagar .. Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE AJAY KUMAR MITTAL PRESENT: Mr Yogesh Putney, Advocate for the revenue Mr. Pankaj Jain, Advocate for the assessee. M.M.Kumar, J. The revenue has filed the instant appeal under Section 260 A of the Income Tax Act, 1961 challenging order dated 18.7.2005 passed by the Income Tax Appellate Tribunal, Chandigarh Bench, “A”, Chandigarh in ITA No. 589/Chandi/2003. It has been claimed that the following question of law would arise for the determination of this Court: “ Whether in the facts and circumstances of the case the assessee can take advantage of inflated closing stock figures given to the Bank and at the same time disown the consequences for this assessment to income tax?” At the outset, learned counsel for the assessee has placed reliance on a Division Bench judgement of this Court rendered in the case of The Commissioner of Income Tax, Panchkula v. M/s Chauhan Papers Pvt. Limited ( ITA No.358 of 2006 decided on 12.10.2006) and submitted that a similar question of law, as raised in this appeal, has since been decided by the Division Bench in favour of the assessee and against the Revenue. As the facts of the present case are similar to the case of M/s Chauhan Papers Pvt. Ltd. (supra) and therefore it has to meet the same fate. Accordingly the appeal fails and the same is dismissed. (M.M.Kumar) Judge (Ajay Kumar Mittal) 18 .9.2007 Judge okg

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