THE COMMISSIONER OF IT-I vs. M/S BHUSHAN METALICS LTD

PDF · subscribers
ITA/679/2005HC Punjab & HaryanaPHHC01073575200511 May 2016Author: MR. JUSTICE ADARSH KUMAR GOEL,THE TAXING OFFICER2 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as not pressed. The revenue, citing CBDT circulars regarding tax effect, indicated its intention not to press the appeal. The court granted liberty to the revenue to file an application for revival of the appeal as prayed for. It was clarified that the withdrawal of the appeal by the revenue would not be taken as an affirmation of the Tribunal's order on merits. The legal issue, as claimed by the revenue, was left open to be adjudicated in an appropriate case. No finding was given on the substantial question of law raised.

What were the facts?

The appeal was filed by the Commissioner of Income Tax-I, Chandigarh (appellant-revenue) against the order dated 05.05.2005 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench 'A'. The ITAT's order pertained to assessment year 1998-99 and had confirmed the deletion of a disallowance of interest amounting to Rs. 13,12,491/- made by the Assessing Officer under Section 36(1)(iii) of the Income Tax Act, 1961. The disallowance was on a loan raised for establishing a new unit, which the revenue contended was not an expansion of the existing business. The High Court of Punjab and Haryana at Chandigarh was hearing the appeal under Section 260A of the Act.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in confirming the order of the CIT(A) deleting the disallowance of interest of Rs. 13,12,491/- under Section 36(1)(iii) of the Income Tax Act, on a loan raised for the establishment of a new unit which was not a case of expansion of the existing business? Contentions: Assessee: The judgment does not record any specific contentions made by the assessee before the High Court. Revenue: The appellant-revenue, through its counsel, submitted that in view of Circular No. 21/2015 dated 10.12.2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by the Central Board of Direct Taxes, it did not wish to press the present appeal as the tax effect involved was less than Rs. 20 lacs. The revenue prayed for liberty to file an application for revival of the appeal if something survived therein.

Which sections of the Income-tax Act were involved?

Section 260A,Section 36(1)(iii)

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 11.05.2016 The Commissioner of Income Tax-I, Chandigarh .......Appellant Versus M/s Bhushan Metalics Ltd. ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Ms. Urvashi Dugga, Advocate for the appellant. Mr. Divya Suri, Advocate for the respondent. RAJESH BINDAL,J. This appeal has been filed under Section 260 A of the Income Tax Act, 1961 (for short 'the Act'), against the order dated 5.5.2005 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A' Chandigarh, in ITA No. 745/Chandi/2001, for the assessment year 1998-99, raising the following substantial question of law: Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in confirming the order of the CIT(A) deleting disallowance of interest of Rs.13,12,491/- u/s 36(1) (iii) of the I.T. Act on loan raised for establishment of a new unit which was not a case of expansion of the existing business? REEMA SAINI 2016.05.20 15:15 I attest to the accuracy and authenticity of this document High Court, Chandigarh -2- Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, she does not wish to press the present appeal, as the tax effect involved is less than ` 20 lacs. However, she prays that liberty be granted to the revenue to file an application for revival of the appeal in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the appeal by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 11.05.2016 JUDGE reema REEMA SAINI 2016.05.20 15:15 I attest to the accuracy and authenticity of this document High Court, Chandigarh

More judgments on Section 36(1)(iii)

All 3,665 judgments and leading authorities on Section 36(1)(iii) →

Recent GST High Court judgments

Search GST case law →