PR. COMMISSIONER OF INCOME TAX-4, AHMEDABAD vs. THE SANDESH LTD

PDF · subscribers
TAXAP/180/2018HC GujaratGJHC24008524201826 June 2018Bench: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE A.Y. KOGJE3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the appeal filed by the Revenue. The Court noted that the learned counsel for the Revenue heavily relied upon the Division Bench judgments of the same High Court in Gujarat Chamber of Commerce and Industries & Anr. Vs. Union of India & Ors. and The Principal Commissioner of Income Tax-1 Vs. Cadila Healthcare Ltd. The learned advocate for the respondent (assessee) was not in a position to dispute that the question of law was not res integra and was held in favour of the Revenue. Consequently, the High Court followed its own previous decisions, allowed the appeal, and answered the substantial question of law in favour of the Revenue and against the assessee. The impugned judgment and order passed by the learned Tribunal was set aside. No costs were awarded.

What were the facts?

The Revenue, Pr. Commissioner of Income Tax-4, Ahmedabad, has appealed against the order of the Income Tax Appellate Tribunal (ITAT), Ahmedabad ‘C’ Bench, dated August 22, 2016, in ITA No. 2799/Ahd/2013. The appeal concerns the assessment year(s) not explicitly stated but relates to an addition of Rs. 2,39,36,799/- on which fringe benefits tax was allegedly liable to be paid by the assessee, The Sandesh Ltd. The ITAT had deleted this addition. The Revenue is challenging the ITAT's decision to delete the addition.

What were the issues?

1. Whether the Tribunal is right in law and on the facts in deleting the addition of Rs. 2,39,36,799/- on which fringe benefits tax was liable to be paid by the assessee? (Question of law and fact, concerning the liability to pay fringe benefits tax). Assessee's Contention: The judgment does not record any specific contentions made by the assessee (The Sandesh Ltd.) before the High Court. However, the fact that the ITAT deleted the addition implies the assessee likely argued successfully before the Tribunal that the addition was not warranted or that fringe benefits tax was not applicable. Revenue's Contention: The Revenue heavily relied on the decisions of the Division Bench of the Gujarat High Court in Gujarat Chamber of Commerce and Industries & Anr. Vs. Union of India & Ors. (SCA No. 21124 of 2005, dated 17.03.2017) and The Principal Commissioner of Income Tax-1 Vs. Cadila Healthcare Ltd. (dated 17.03.2017). The Revenue argued that these judgments cover the present issue in its favour, meaning the question of law is no longer res integra and is decided in favour of the Revenue.

AI-generated summary — verify with the full judgment below

C/TAXAP/180/2018 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 180 of 2018

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE M.R. SHAH Sd/-

and HONOURABLE MR.JUSTICE A.Y. KOGJE Sd/- =========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? No 2 To be referred to the Reporter or not ? No 3 Whether their Lordships wish to see the fair copy of the judgment ? No 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? No ================================================================ PR. COMMISSIONER OF INCOME TAX-4, AHMEDABAD Versus THE SANDESH LTD ================================================================ Appearance: MR MANISH R BHATT, SENIOR ADVOCATE assisted by MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 MR B S SOPARKAR(6851) for the RESPONDENT(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE A.Y. KOGJE

Date : 26/06/2018

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1. Feeling aggrieved and dissatisfied with the Page 1 of 3

C/TAXAP/180/2018 JUDGMENT impugned judgment and order passed by the learned Income Tax Appellate Tribunal, Ahmedabad ‘C’ Bench dated 22.08.2016 in ITA No.2799/Ahd/2013, the Revenue has preferred the present Tax Appeal to consider following substantial question of law:- “[A] Whether the Tribunal is right in law and on the facts in deleting the addition of Rs.2,39,36,799/- on which fringe benefits tax was liable to be paid by the assessee?” 2. Today, when the present appeal is taken up for final hearing, Shri Bhatt, learned Counsel appearing on behalf of the Revenue has heavily relied upon the decision of the Division Bench of this Court in the case of Gujarat Chamber of Commerce and Industries & Anr. Vs. Union of India & Ors., in SCA No.21124 of 2005 and other allied SCAs dated 17.03.2017 as well as common judgment and order passed in Tax Appeal No.888 of 2015 and other allied Tax Appeals in the case of The Principal Commissioner of Income Tax-1 Vs. Cadila Healthcare Ltd. dated 17.03.2017 and has submitted that so far as this Court is concerned, the aforesaid question is now not res integra and is covered in favour of the Revenue. 3. Shri B.S.Soparkar, learned Advocate appearing on behalf of the respondent is not in a position to dispute that so far as this Court is concerned, question Page 2 of 3

C/TAXAP/180/2018 JUDGMENT of law is now not res integra and it is held in favour of the Revenue and against the assessee. 4. In view of the above and for the reasons stated in common judgment and order passed by the Division Bench of this Court in the case of Gujarat Chamber of Commerce and Industries Vs. Union of India & Ors., in SCA No.21124 of 2005 dated 17.03.2017 and in the case The Principal Commissioner of Income Tax-1 Vs. Cadila Healthcare Ltd., reported in 395 ITR, 457, present appeal is allowed. The question of law is answered in favour of the Revenue and against the assessee. Consequently, the impugned judgment and order passed by the learned Tribunal is hereby set aside. No order as to costs. Sd/- (M.R. SHAH, J) Sd/- (A.Y. KOGJE, J) SHITOLE Page 3 of 3

Recent GST High Court judgments

Search GST case law →