CIT JALANDHAR vs. M/S AMBIKA FORGINS,JAL.

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ITR/20/1998HC Punjab & HaryanaPHHC01037986199819 July 2007Author: MR. JUSTICE M.M. KUMAR,MR. JUSTICE AJAY KUMAR MITTAL2 pages
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What did the High Court hold?

The High Court held that the question of law referred to it had already been considered and answered in favour of the assessee and against the revenue in a similar case involving the same assessee for the Assessment Year 1987-88. This prior decision was rendered by a Division Bench of the High Court in I.T.R. No. 9 of 1996, decided on September 5, 2006. The revenue did not dispute this factual position. Consequently, following the precedent set in the earlier case, the High Court answered the question against the revenue and in favour of the assessee. The operative direction is that the claim for deduction of Rs. 8,50,000/- is upheld.

What were the facts?

This case involves an Income Tax Reference (ITR No. 20 of 1998) before the High Court of Punjab and Haryana at Chandigarh. The applicant is the Commissioner of Income-tax, Jalandhar, and the respondent is M/s Ambika Forging, Jalandhar. The reference arises from an order dated April 24, 1997, passed by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench, in I.T.A. Nos. 446 & 670 (ASR)/1991. The assessment year in question is 1988-89. The core of the dispute concerns the assessee's claim for a deduction of Rs. 8,50,000/- allegedly paid as commission to the late Sh. B.M. Goel.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Commissioner of Income-tax (Appeals) and the Tribunal have rightly upheld the claim of the assessee for deduction of Rs. 8,50,000/- allegedly paid to commission to late Sh. B.M. Goel? (Question of law turning on the interpretation and application of relevant provisions of the Income-tax Act, 1961, concerning deductions for business expenditure). Assessee's Contention: The assessee's claim for deduction was upheld by the lower authorities. Revenue's Contention: The revenue challenged the upholding of the deduction by the CIT(A) and the Tribunal. The revenue's specific arguments are not detailed in the provided text, but the reference itself indicates their disagreement with the lower authorities' decision.

Which sections of the Income-tax Act were involved?

Section 256(1)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.R. No. 20 of 1998 DATE OF DECISION: 19.7.2007 The Commissioner of Income-tax, Jalandhar …Applicant Versus M/s Ambika Forging, Jalandhar …Respondent CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present: Mr. Sanjiv Bansal, Advocate, for the applicant-revenue. Mr. S.K. Mukhi, Advocate, for the respondent-assessee.

JUDGMENT M.M. KUMAR, J. The following question of law emerging from the order dated 24.4.1997, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, in I.T.A. Nos. 446 & 670 (ASR)/1991 in respect of the Assessment Year 1988-89 has been referred for the opinion of this Court under Section 256(1) of the Income-tax Act, 1961 (for brevity, ‘the Act’):- “Whether on the facts and in the circumstances of the case, the Commissioner of Income-tax (Appeals) and the Tribunal have rightly upheld the claim of the assessee for deduction of Rs. 8,50,000/- allegedly paid to commission to late Sh. B.M. Goel?”

I.T.R. No. 20 of 1998 It has not been disputed that in respect of the Assessment Year 1987-88 similar question of law in the case of the assessee itself was considered in I.T.R. No. 9 of 1996, decided on 5.9.2006, by a Division Bench of this Court and has been answered against the revenue and in favour of the assessee. There is no dispute raised by the learned counsel for the revenue with regard to the aforementioned factual position. In view of the above, the question is answered against the revenue.

(M.M. KUMAR) JUDGE (AJAY KUMAR MITTAL) July 19, 2007 JUDGE Pkapoor 2

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