COMMISSIONER OF INCOME TAX ROHTAK vs. HARYANA FINANCIAL CORPORATION LTD CHANDIGARH

ITR/2426/1993HC Punjab & HaryanaPHHC01021920199324 October 2006Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the Tribunal was right in law in confirming the order of the CIT(A). The Court's decision was based on respectfully following the judgments of the Apex Court in Commissioner of Income-tax v. Andhra Pradesh State Financial Corporation, (1998) 233 ITR 195 and Commissioner of Income-tax v. Kerala State Industrial Development Corporation, (1998) 233 ITR 197. The ratio decidendi is that financial corporations are entitled to the deduction under Section 36(1)(viii) on their total income computed before such deduction, as established by the Supreme Court. The Revenue's counsel did not dispute the applicability of these binding precedents. Therefore, the question of law was answered in the affirmative, meaning the assessee is entitled to the deduction. The operative direction is to answer the reference in favour of the assessee.

What were the facts?

The Commissioner of Income-tax, Haryana, Rohtak (Revenue) has referred a question of law to the High Court of Punjab and Haryana at Chandigarh, arising from an order of the Income Tax Appellate Tribunal (Tribunal). The Tribunal's consolidated order, dated 3.9.1992, pertained to Income Tax Appeal Nos. 753 to 755 of 1987, concerning assessment years 1981-82 to 1983-84. The assessee is The Haryana Financial Corporation Ltd., Chandigarh. The dispute concerns the eligibility of the assessee for a deduction of 40% under Section 36(1)(viii) of the Income Tax Act, 1961, on its total income calculated before this deduction. The Revenue is challenging the Tribunal's confirmation of the Commissioner of Income-tax (Appeals) [CIT(A)] order allowing this deduction.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in confirming the order of the CIT(A) holding that the assessee was entitled to deduction of 40% under section 36(1)(viii) of the total income arrived at without taking into account this deduction? Assessee's contentions: The judgment does not record specific contentions made by the assessee before the High Court. However, the fact that the High Court is answering the question in favour of the assessee implies the assessee would have argued for the allowance of the deduction. Revenue's contentions: Shri Yogesh Putney, learned counsel for the Revenue, did not dispute the applicability of the Apex Court judgments in Commissioner of Income-tax v. Andhra Pradesh State Financial Corporation, (1998) 233 ITR 195 and Commissioner of Income-tax v. Kerala State Industrial Development Corporation, (1998) 233 ITR 197 to the present case. This implies the Revenue's argument, if any, was based on distinguishing these precedents or challenging their applicability, which they ultimately conceded.

Which sections of the Income-tax Act were involved?

Section 36(1)(viii)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

**** I.T.R. Nos.24 to 26 of 1993 Date of Decision:24.10.2006 The Commissioner of Income-tax, CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE RAJESH BINDAL Present:- Shri Yogesh Putney, Advocate for the applicant. **** ADARSH KUMAR GOEL, J. At the instance of Revenue, Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short, `the Tribunal') has referred the following question of law arising out of its consolidated order dated 3.9.1992 in I.T.A. Nos.753 to 755/Chandi/1987 relating to assessment years 1981-82 to 1983-84 for the opinion of this Court:- “Whether on the facts and in the circumstances of the case, the Tribunal was right in law in confirming the order of the CIT(A) holding that the assessee was entitled to deduction of 40% under section 36(1)(viii) of the total income arrived at without taking into account this deduction?” The issue raised in this question stands settled by the decision

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 36(1)(viii)

All 364 judgments and leading authorities on Section 36(1)(viii) →

Recent GST High Court judgments

Search GST case law →