COMMISSIONER OF INCOME TAX vs. TORRENT LEASING & FINANCE PVT.LTD.
What did the High Court hold?
The High Court dismissed the appeal filed by the Revenue. The Court noted that the amount involved in the appeal was small, and the revenue effect was less than Rs. 1 lakh. Citing CBDT Instruction No. 1979 dated March 27, 2000, and Instruction No. 02 of 2005, the Court held that the Revenue ought not to have filed an appeal when the total revenue effect was below Rs. 1 lakh. Consequently, the substantial question of law was answered in favour of the assessee and against the Revenue. The appeal was dismissed on the ground of the smallness of the amount. Liberty was granted to the Revenue to revive the appeal in case of difficulty. No specific finding was given on the merits of the disallowance of interest.
What were the facts?
The Revenue, Commissioner of Income Tax, filed an appeal before the High Court of Gujarat challenging an order dated January 20, 2006, passed by the Income-tax Appellate Tribunal (ITAT), Ahmedabad Bench. The ITAT's order was in ITA No. 369/Ahd/2001 for the assessment year 1997-98. The appeal concerned the deletion of a disallowance of interest amounting to Rs. 3,81,000/-. This interest was paid on borrowings used for the payment of Tax Deducted at Source (TDS). The High Court admitted the appeal on July 9, 2007, and framed a substantial question of law.
What were the issues?
1. Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT deleting the disallowance of interest of Rs. 3,81,000/- paid on the borrowing for payment of TDS? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the ITAT's order, which was confirmed by the High Court, deleted the disallowance of interest. Revenue's Contention: The Revenue contended that the disallowance of interest should not have been deleted. The judgment does not explicitly state the revenue's arguments before the High Court, but their appeal implies disagreement with the ITAT's decision.
AI-generated summary — verify with the full judgment below
O/TAXAP/1442/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1442 of 2006
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE KS JHAVERI
and HONOURABLE MR.JUSTICE K.J.THAKER
================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ COMMISSIONER OF INCOME TAX....Appellant(s) Versus TORRENT LEASING & FINANCE PVT.LTD.....Opponent(s) ================================================================ Appearance: MR NITIN K MEHTA, ADVOCATE for the Appellant(s) No. 1 MRS SWATI SOPARKAR, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Page 1 of 3
O/TAXAP/1442/2006 JUDGMENT
Date : 12/12/2014
ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. By way of this appeal, the appellant-revenue has challenged the order dated 20.01.2006 passed by the Income-tax Appellate Tribunal, Ahmedabad Bench in ITA No. 369/Ahd/2001 for the assessment year 1997-98. 2. While admitting this appeal on 09.07.2007, this Court has framed the following substantial question of law: Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT deleting the disallowance of interest of Rs. 3,81,000/- paid on the borrowing for payment of TDS? 3. In our view, the amount involved in the present case is a small one and the revenue effect is less than Rs. 1 lakh, and therefore, as per CDBT Instruction No. 1979 dated 27th March, 2000 and 02 of 2005, the revenue ought not to have come in appeal where the total revenue effect is less than Rs. 1 lakh, and therefore, this appeal is not entertained. The questions are answered in favour of the assessee and against the revenue. This appeal is dismissed on the ground of smallness of amount. Liberty to revive in case of difficulty. (K.S.JHAVERI, J.) Page 2 of 3
O/TAXAP/1442/2006 JUDGMENT (K.J.THAKER, J) divya Page 3 of 3
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