M/S GNA ENTERPRISES vs. C.I.T
What did the High Court hold?
The High Court did not decide the questions of law on their merits. Since no one appeared for the assessee when the reference was called out for hearing, the Court deemed it inappropriate to make a decision. Consequently, the reference was returned unanswered. The operative direction is that the reference is returned unanswered, implying no relief or decision on the substantive issues raised. No specific findings were made on the classification of machinery or eligibility for depreciation or extra shift allowance. The Court did not express any opinion on the applicability of the cited provisions of Appendix I to Rule 5 of the Income-tax Rules.
What were the facts?
This case concerns Income Tax Reference No. 8 of 1996 before the High Court of Punjab and Haryana at Chandigarh. The reference arises from Income Tax Appeal Nos. 220/85 and 102/96 before the Income Tax Appellate Tribunal (ITAT), Amritsar Bench. The assessment years under consideration are 1981-82 and 1982-83. The assessee is M/s G.N.A. Enterprises Pvt. Ltd., Goraya, and the respondent is the Commissioner of Income Tax, Jalandhar. The ITAT referred specific questions of law to the High Court for its opinion at the instance of the assessee. When the matter was called for hearing, no one appeared on behalf of the assessee.
What were the issues?
The High Court was asked to decide three questions of law concerning the classification of machinery for depreciation and extra shift allowance purposes under Rule 5 of the Income-tax Rules. 1. For assessment year 1981-82, whether the Tribunal was justified in holding that diesel engines, transformers, electric switchgears, and air circuit breakers (valued at Rs. 3,04,748) were general machinery eligible for 10% depreciation, rather than machine tools (automatic, semi-automatic) eligible for 15% depreciation under item No. III(B)(8) of Appendix I to Rule 5. 2. For assessment year 1981-82, whether the Tribunal was justified in denying extra shift allowance on transformers, electric switchgears, and air circuit breakers (valued at Rs. 1,87,374) on the grounds that they were electric machinery under Sr. No. 1, not special machinery under Part III(B) C(4) of Appendix I to Rule 5. 3. For assessment year 1982-83, whether the Tribunal was justified in holding that diesel engines, transformers, and generators (valued at Rs. 10,42,634) were electric machinery eligible for 10% depreciation, rather than machine tools (automatic, semi-automatic) eligible for 15% depreciation under item IIIB(8) of Appendix I to Rule 5. The revenue was represented by Dr. N.L. Sharda, Advocate. No specific arguments for the revenue are recorded in the provided text. The assessee did not appear.
Which sections of the Income-tax Act were involved?
Rule 5
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER: Following questions of law have been referred for opinion of this Court by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, arising in I.T.A. Nos. 220/85 & 102/96 in respect of assessment years 1981-82 and 1982-83 at the instance of the assessee:- For the assessment year 1981-82:- “1. Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that machinery in the form of diesel engine, transformer, electric switchgears and air circuit breaker valuing Rs.3,04,748/- was not machine tool automatic, semi-automatic entitled to depreciation @ 15% within the meanings of item No.III(B)(8) of Appendix I to Rule 5 of the Income-tax Rules but was General Machinery entitled to 10%?” 2. “Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in sustaining the view that extra shift allowance on transformer, electric switchgears and air circuit breaker valuing Rs.1,87,374/- was not allowable in view of sub part 3 (Special rates) of Appendix I to Rule 5 as Electric
I.T.R. No.8 of 1996 Machinery as mentioned in Sr. No.1 and not special machinery as per Part III(B) C(4) of Appendix I to Rule 5 of the Income-tax Rules?” For the assessment year 1982-83:- “Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that machinery in the form of Diesel Engine, Transformer and Generateor etc. valuing Rs.10,42,634/- was not machine tools Automatic, Semi Automatic, entitled to depreciation @ 15% within the meaning of item IIIB(8) of Appendix ‘I’ to Rule 5 of the Income-tax Rules but was electric machinery entitled to depreciation @ 10%?
When the reference was called out for hearing, none appeared for the assessee.
In view of above, we do not consider it appropriate to take a decision on merits. The reference is returned unanswered. ( ADARSH KUMAR GOEL ) JUDGE October 31, 2006 ( RAJESH BINDAL ) ashwani JUDGE Pag e
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