CIT PATIALA vs. VARDHMAN SPINNING AND GEN.MILL

ITR/43/1999HC Punjab & HaryanaPHHC01038727199918 October 2006Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL2 pages

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What did the High Court hold?

The High Court answered both questions of law against the Revenue and in favour of the assessee. For Question 1, the Court followed its own previous judgment in I.T.R. No. 9 of 1995 (The Commissioner of Income-tax, Patiala v. M/s Hind Woollen & Hosiery Mills, Ludhiana), decided on September 5, 2006, which in turn followed the Supreme Court's decision in South India Viscose Ltd. v. Commissioner of Income-Tax, (1997) 227 ITR 286. This implies that the Tribunal was correct in allowing the claim for ESA by treating the concern as a whole. For Question 2, the Court relied on its judgment in I.T.R. No. 60 of 1988 (Commissioner of Income-tax (Central), Ludhiana v. M/s Oswal Woollen Mills Ltd.), decided on April 19, 2006. The Revenue did not cite any contrary judgment. The reasoning for both questions is based on the precedent set by higher courts and the High Court's own prior decisions. The reference is disposed of accordingly.

What were the facts?

This case concerns Income Tax Reference No. 43 of 1999 before the High Court of Punjab and Haryana at Chandigarh. The reference arises from an order dated July 12, 1994, passed by the Income-Tax Appellate Tribunal, Chandigarh Bench, in I.T.A. No. 517/Chandi/88, pertaining to the assessment year 1981-82. The applicant is the Commissioner of Income-tax, Patiala, and the respondent is M/s Vardhman Spinning and General Mills Ltd. The High Court was asked to decide two questions of law referred by the Tribunal. The procedural history involves the Tribunal's order which is under challenge, and the subsequent reference of specific questions to the High Court for its opinion.

What were the issues?

The Tribunal referred the following questions of law for the opinion of the High Court: 1. Whether, the CIT and Tribunal have rightly allowed the claim of the assessee in respect of ESA by treating the concern as a whole? 2. Whether, on the facts and in the circumstances of the case, the ITAT is right in upholding the orders passed by CIT(A) with regard to the grant of ESA on the cost of electrical installation? For Question 1, the Revenue's contention is implicitly that the CIT and Tribunal erred in allowing the claim for ESA by treating the concern as a whole. The Assessee's contention is that the claim was rightly allowed. For Question 2, the Revenue's contention is implicitly that the ITAT was not right in upholding the orders of the CIT(A) regarding the grant of ESA on the cost of electrical installation. The Assessee's contention is that the ITAT was right in upholding the orders. The judgment does not explicitly detail the arguments of each side beyond what can be inferred from the questions and the court's reliance on previous judgments.

AI-generated summary — verify with the full judgment below

I.T.R.No.43 of 1999 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.R.No. 43 of 1999 Date of decision: October 18, 2006 The Commissioner of Income-tax, Patiala v. M/s Vardhman Spinning and General Mills Ltd. Present: Mr.S.K.Garg Narwana, Advocate for the applicant. Mr.Akshay Bhan, Advocate for the respondent. CORAM: Hon'ble Mr.Justice Adarsh Kumar Goel Hon'ble Mr.Justice Rajesh Bindal

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

To be referred to the Reporters or not ?

Whether the judgment should be reported in the Digest? Rajesh Bindal, J. Following questions of law has been referred for opinion of this Court by the Income-Tax Appellate Tribunal, Chandigarh Bench (for short, `the Tribunal'), arising out of its order dated 12.7.1994, in I.T.A. No. 517/Chandi/88, in respect of assessment year 1981-82:

“1. Whether, CIT and Tribunal have rightly allowed the claim of the assessee in respect of ESA by treating the concern as a whole ?

Whether, on the facts and in the circumstances of the case, the ITAT is right in upholding the orders passed by CIT(A) with regard to the grant of E

The order continues below.

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