COMMISSIONER OF INCOME TAX vs. ADVANCE CONSRUCTION CO.PVT. LTD.

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ITR/34/1992HC GujaratGJHC24015385199209 December 2004Bench: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI3 pages
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What did the High Court hold?

The High Court noted that the two questions referred at the instance of the Revenue were concluded by its earlier decision dated 25/11/2004 in Income Tax Reference No. 175 of 1991, which was in the assessee's own case. The Tribunal's impugned order had followed this earlier decision without assigning independent reasons. Therefore, the High Court answered these two questions in favour of the assessee and against the Revenue, for the reasons stated in the earlier decision. Regarding the question referred at the instance of the assessee, the learned Advocate for the assessee, under instructions, did not press this question. Consequently, the High Court returned this question unanswered as not pressed. The reference was disposed of accordingly, with no order as to costs.

What were the facts?

This case involves an Income Tax Reference No. 34 of 1992 before the High Court of Gujarat at Ahmedabad. The reference arises from cross-references made by the Income Tax Appellate Tribunal (ITAT) under Section 256(1) of the Income Tax Act, 1961. The Commissioner of Income Tax (Revenue) is the petitioner, and Advance Construction Co. Pvt. Ltd. (Assessee) is the respondent. The judgment is dated 09/12/2004. The core of the matter concerns questions of law and fact arising from the ITAT's order, which the High Court is asked to adjudicate upon.

What were the issues?

The Tribunal had to decide three questions of law. At the instance of the Revenue, the questions were: 1. Whether the Tribunal was right in law and on facts in deleting the addition of Rs. 48,633/- being provision for contingencies? (Question of law and fact, concerning the treatment of a provision). 2. Whether the Tribunal was right in law and on facts in holding that the assessee company is an industrial company? (Question of law and fact, concerning the classification of the company). At the instance of the Assessee, the question was: Whether the Tribunal was justified in upholding the decision of the tax authorities in confirming the additions in respect of deposits of Shri Punjabhai D. Patel (Rs. 50,000/-), Smt. Jevantiben P. Patel (Rs. 35,000/-), and Shri N.V. Patel (Rs. 35,000/-) vis-à-vis the provisions of Section 68 of the Act? (Question of law and fact, concerning the treatment of unexplained deposits under Section 68). The Revenue argued that the Tribunal erred in deleting the provision for contingencies and in classifying the assessee as an industrial company. The Assessee argued that the additions in respect of deposits were wrongly confirmed. The judgment notes that the two questions at the instance of the Revenue were concluded by a prior decision of the High Court in the assessee's own case (Income Tax Reference No. 175 of 1991). The assessee did not press its question.

Which sections of the Income-tax Act were involved?

Section 256(1),Section 68

AI-generated summary — verify with the full judgment below

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 34 of 1992

For Approval and Signature:

HON'BLE MR.JUSTICE D.A.MEHTA and HON'BLE MS.JUSTICE H.N.DEVANI

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO

3.

Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals?

-------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus ADVANCE CONSRUCTION CO.PVT. LTD. -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 34 of 1992 MR MANISH R BHATT for Petitioner No. 1 MR JP SHAH for Respondent No. 1

--------------------------------------------------------------

CORAM : HON'BLE MR.JUSTICE D.A.MEHTA and HON'BLE MS.JUSTICE H.N.DEVANI

Date of decision: 09/12/2004

ORAL JUDGEMENT (Per : HON'BLE MR.JUSTICE D.A.MEHTA)

1 The Income Tax Appellate Tribunal has referred the following questions of law arising from cross references under Section 256(1) of the Income Tax Act,1961 (the Act).

At the instance of the Revenue : "1. (1) Whether, the Tribunal is right in law and on facts in deleting the addition of Rs.48,633/- being provision for contingencies?

(2) Whether, the Tribunal is right in law and on facts in holding that the assessee company is an industrial company ?

At the instance of the assessee :

"Whether, the Tribunal was justified in the facts and in the circumstances of case and in accordance with law in upholding the decision of the tax authorities in confirming the additions in respect of deposits of Shri Punjabhai D.Patel Rs.50,000/-, Smt.Jevantiben P.Patel Rs.35,000/and Shri N.V.Patel Rs.35,000/- vis-a-vis the provisions of Sec.68 of the Act ?"

2 Heard Mr.M.R.Bhatt, learned Senior Standing Counsel for the Revenue and Mr.J.P.Shah, learned Advocate for the assessee.

3 It is common ground between the parties that the two questions referred for opinion of this Court at the instance of the revenue stand concluded by decision dated 25/11/2004 rendered in Income Tax Reference No.175 of 1991 in assessee's own case and it is not necessary to set out any facts or contentions in detail.

4 The Tribunal in its impugned order has followed assessee's own case for Assessment Year 1982-83 and no independent reasons are assigned. In the circumstances, the two questions referred to the Court at the instance of the revenue stand answered in favour of the assessee and against the revenue for the reasons stated in earlier decision of this Court rendered in Income Tax Reference No.175 of 1991.

5 In so far as question at the instance of the

revenue is concerned, Mr.J.P.Shah, learned Advocate for the assessee, under instructions, does not press the question and, hence, the same is returned unanswered as not pressed.

6 In the result, the reference stands disposed of accordingly. There shall be no order as to costs.

(D.A.Mehta, J)

(H.N.Devani,J) m.m.bhatt

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