THE COMMISSIONER OF INCOME TAX JDR. vs. M/S MITHAN LAL KALRA RICE & GEN.MILLS

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ITR/73/1989HC Punjab & HaryanaPHHC01022618198910 January 2007Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE M.M. KUMAR1 pages

AI SummaryAllowed

What did the High Court hold?

The High Court held that the Income-tax Appellate Tribunal was right in law in deleting the addition of Rs.9,68,474/-. The Court referred to its own decision in I.T.R. No.119 of 1995 – The Commissioner of Income Tax, Patiala v. M/s Jagdamba Woollen Mills (P) Limited, Ludhiana, decided on November 15, 2006. In that case, a similar issue was decided against the revenue and in favour of the assessee. For the reasons recorded in that precedent, the High Court answered the referred question against the revenue and in favour of the assessee. The operative direction is that the addition made by the Income-tax Officer stands deleted.

What were the facts?

The Commissioner of Income Tax, Jalandhar (Revenue) has referred a question of law to the High Court of Punjab and Haryana arising from an order of the Income Tax Appellate Tribunal (ITAT), Amritsar Bench. The ITAT's order in I.T.A. No.833 of 1987, dated 3.2.1988, pertains to the assessment year 1980-81. The dispute concerns the deletion of an addition of Rs.9,68,474/- made by the Income-tax Officer. This addition was on account of a difference between the value of stock hypothecated with the bank and the stock value reflected in the books of account of the assessee, M/s Mithan Lal Kalra Rice & General Mills, Mukatsar (Assessee).

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in deleting the addition of Rs.9,68,474/- made by the Income-tax Officer on account of difference in the value of stock hypothecated with the bank and that shown in the books of account of the assessee? (Question of law) Assessee's contentions: Not recorded in the judgment. Revenue's contentions: Not recorded in the judgment. The judgment states that the issue has been decided by this Court in a similar case, implying the revenue's arguments were considered and found wanting in that precedent.

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.73 of 1989 Date of Decision:10.01.2007 The Commissioner of Income Tax, Jalandhar .....Petitioner Vs. M/s Mithan Lal Kalra Rice & General Mills, Mukatsar .....Respondent CORAM:- HON'BLE MR. JUSTICE M.M.KUMAR HON'BLE MR. JUSTICE RAJESH BINDAL Present:- Mr. Sanjiv Bansal, Advocate for the applicant. ****

ORDER The following question of law has been referred for opinion of this Court arising out of order passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar in I.T.A. No.833 of 1987 dated 3.2.1988 in respect of assessment year 1980-81:- “Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in deleting the addition of Rs.9,68,474/- made by the Income-tax Officer on account of difference in the value of stock hypothecated with the bank and that shown in the books of account of the assessee?” It is not disputed that a similar issue has been gone into by this Court in I.T.R. No.119 of 1995 – The Commissioner of Income Tax, Patiala v. M/s Jagdamba Woollen Mills (P) Limited, Ludhiana decided on November 15, 2006, wherein the same has been answered against the revenue and in favour of the assessee.

For the reasons recorded therein, the question referred is answered against the revenue and in favour of the assessee.

( RAJESH BINDAL ) JUDGE January 10, 2007 ( M.M.KUMAR ) renu JUDGE

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