COMMISSIONER OF INCOME-TAX vs. CADILA CHEMICALS PVT. LTD.

ITA/66/1997HC GujaratGJHC24020104199713 January 1998Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE ANIL R. DAVE6 pages
AI SummaryDismissed

What were the facts?

The Commissioner of Income-tax (Revenue) applied to the Gujarat High Court under Section 256(2) of the Income Tax Act, 1961, seeking a reference of a question of law to the High Court. The question concerned whether the Income Tax Appellate Tribunal was correct in deleting an addition of Rs. 3,93,955/- for customs duty from closing stock under Section 43B. The Tribunal had previously refused to refer the question under Section 256(1), holding that the matter was covered by the High Court's decision in Lakhanpal National Ltd. Vs. ITO. The Revenue argued that even if a similar question was decided, the High Court should still call for a statement of case, citing D.B. Madan Vs. Commissioner of Income Tax, and suggested that Lakhanpal's case might need reconsideration by a larger bench.

What did the High Court hold?

The High Court held that the observations in D.B. Madan's case do not imply that a statement of case must be mechanically called for on a question of law already decided by the High Court. Such observations merely enable the High Court to call for a statement of case even if a similar question has been decided, allowing for reconsideration due to varying contexts or if the earlier view needs re-evaluation. However, in this instance, the High Court found no ground to reconsider its ratio in Lakhanpal's case, which dealt with the deductibility of import and excise duties under Section 43B. The Court noted that the deduction was claimed only for duties actually paid and that the Lakhanpal's case decision, which held such duties deductible under Section 43B(a), had not been challenged by the Revenue. Therefore, the High Court concluded that no question of law arose from the Tribunal's order as it was concluded by the High Court's own precedent. The application was rejected, and the rule was discharged.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 3,93,955/- for customs duty from closing stock under Section 43B? (Question of law and fact, concerning Section 43B of the Income Tax Act, 1961). Assessee's Contention: The Tribunal was correct in deleting the addition as the matter was squarely covered by the High Court's decision in Lakhanpal National Ltd. Vs. ITO. Revenue's Contention: The High Court should call for a statement of case on the question of law, even if a similar question was previously decided, citing D.B. Madan Vs. Commissioner of Income Tax. Furthermore, the Revenue contended that the decision in Lakhanpal's case requires reconsideration by a larger bench.

Which sections of the Income-tax Act were involved?

Section 43B,Section 256(1),Section 256(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX APPLICATION No 66 of 1997

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE A.R.DAVE ============================================================ 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?

The order continues below.

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