COMMISSIONER OF INCOME TAX JDR vs. M/S KUMAR AND COMPANY

PDF · subscribers
ITR/4/2004HC Punjab & HaryanaPHHC01051632200409 November 2006Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE RAJESH BINDAL2 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court, based on the concessions made by the Revenue's counsel, answered both referred questions of law. For the first question concerning the disallowance of commission and discount under Section 37(3A), the Court held that the Tribunal was right. This decision was based on the High Court's own prior judgment in Commissioner of Income-tax v. Indo Asian Switchgears (P) Ltd., which was also followed in another High Court case. Consequently, this question was answered against the Revenue and in favour of the assessee. For the second question regarding the applicability of amended Section 43B to assessment year 1985-86, the Court held that the Tribunal was right in its approach. This was based on the Supreme Court's judgment in Allied Motors (P.) Ltd. v. Commissioner of Income-Tax. Therefore, this question was also answered against the Revenue and in favour of the assessee. The reference was disposed of accordingly.

What were the facts?

This case involves a reference to the High Court of Punjab and Haryana by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench, concerning the assessment year 1985-86. The Commissioner of Income-tax, Jalandhar, is the applicant (Revenue), and M/s Kumar & Co., Jalandhar, is the respondent (assessee). The ITAT's order under challenge is dated 29.10.1993, arising from I.T.A. Nos. 442 and 318 (ASR)/1989. The reference pertains to two specific questions of law. The Revenue's counsel conceded that these questions are covered by existing judgments of the High Court and the Supreme Court.

What were the issues?

The Tribunal had to decide two questions of law. The first question was: (1) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the expenses on account of commission amounting to Rs. 88,660/- and discount amounting to Rs. 1,88,300/- are not to be taken into account for the purpose of disallowance under Section 37(3A) of the Income-tax Act? The second question was: (2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in applying the amended provisions of Section 43B of the Income-tax Act to the proceedings for the assessment year 1985-86 when the amendment was effected from 1.4.1988? The Revenue conceded that both questions were covered by previous judgments. For question (1), the Revenue acknowledged it was covered by the High Court's judgment in Commissioner of Income-tax v. Indo Asian Switchgears (P) Ltd. For question (2), the Revenue conceded it was covered by the Supreme Court's judgment in Allied Motors (P.) Ltd. v. Commissioner of Income-Tax.

Which sections of the Income-tax Act were involved?

Section 37(3A),Section 43B

AI-generated summary — verify with the full judgment below

I.T.R. No. 4 of 2004 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.R.No. 4 of 2004 Date of decision: 9.11.2006 The Commissioner of Income-tax, Jalandhar Applicant through

Dr. N.L.Sharda, Advocate v. M/s Kumar & Co., Jalandhar Respondent through Nemo CORAM: Hon'ble Mr.Justice Ajay Kumar Mittal Hon'ble Mr.Justice Rajesh Bindal

1.

Whether Reporters of local papers may be allowed to see the judgment ?

2.

To be referred to the Reporters or not ?

3.

Whether the judgment should be reported in the Digest? Rajesh Bindal, J. Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (for short, `the Tribunal'), arising out of its order dated 29.10.1993 in I.T.A. Nos. 442 and 318 (ASR)/1989, in respect of assessment year 1985-86: “(1) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the expenses on account of commission amounting to Rs. 88,660/- and discount amounting to Rs. 1,88,300/- are not to be taken into account for the purpose of disallowance under Section 37(3A) of the Income-tax Act ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in applying the amended provisions of Section 43B of the Income-tax Act to the proceedings for the assessment year 1985-86 when the amendment was effected from 1.4.1988?” Learned counsel for the Revenue, at the very out-set, fairly conceded that the questions of law, referred to this Court for opinion, are covered by the judgment of this Court and the Supreme Court respectively.

I.T.R. No. 4 of 2004 [2] As far as question No. (1) is concerned, the same is conceded to be covered by a judgment of this Court in Commissioner of Income-tax v. Indo Asian Switchgears (P) Ltd., (2002) 257 ITR 645, which was followed by this Court in I.T.R. No. 134 of 1996 – The Commissioner of Income Tax, Jalandhar v. M/s JMP Manufacturing Co., Preet Nagar, Jalandhar, decided on 5.9.2006. Accordingly, this question is answered against the Revenue and in favour of the assessee. As far as question No. (2) is concerned, concededly the same has been answered against the Revenue and in favour of the assessee in the judgment of Hon'ble the Supreme Court in Allied Motors (P.) Ltd. v. Commissioner of Income-Tax, (1997) 224 ITR 677. Accordingly, this question is also answered against the Revenue and in favour of the assessee. The reference is disposed of in the manner indicated above. ( Rajesh Bindal ) Judge (Ajay Kumar Mittal) Judge 9.11.2006 mk

More judgments on Section 37(3A)

All 29 judgments and leading authorities on Section 37(3A) →

Recent GST High Court judgments

Search GST case law →