HARSIDDH SPECIFIC FAMILY TRUST vs. A.C.I.T.

O/TAXAP/211/2002 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 211 of 2002

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 ? ================================================================ HARSIDDH SPECIFIC FAMILY TRUST....Appellant(s) Versus A.C.I.T.....Opponent(s) ================================================================ Appearance: MRS SWATI SOPARKAR, ADVOCATE for the Appellant(s) No. 1 MR NITIN K MEHTA, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Page 1 of 5

O/TAXAP/211/2002 JUDGMENT

Date : 21/11/2014

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. The assessee has filed this appeal u/s.260A of the Income Tax Act, 1961 (for short, the Act) being aggrieved by and dissatisfied with the order passed by the Income Tax Appellate Tribunal (for short, the ITAT) in I.T.A. No. 2955/Ahd/95 dated 29.08.2001. 2. While admitting the appeal on 20.08.2002, the following substantial question of law came to be formulated; ”Whether, in law and in facts and circumstances of the appellant’s case, the Tribunal was justified in holding that deduction under sec. 80I of the Act should be allowed from the profits of the industrial undertaking after reducing proportionate amount of interest paid to beneficiaries, which is already offered as income under Kar Vivad Samadhan Scheme by the assessee?” 3. Mr. S.N. Soparkar, learned Senior Counsel appearing with Mr. B.S. Soparkar, learned advocate on behalf of Ms. Swati Soparkar, learned advocate for the assessee submitted that interes paid to beneficiaries was disallowed in the assessment order. He submitted that the assessee had filed declaration under Kar Vivad Samadhan Scheme (KVSS) in respect of appeal filed by the department before the Tribunal and the Tribunal dismissed the departmental appeal vide order dated 02.02.2000 passed in Tax Appeal No. Page 2 of 5

O/TAXAP/211/2002 JUDGMENT 2442/Ahd/94. 3.1 Mr. Soparkar submitted that on giving effect to the order of CIT(A) who allowed the deduction vide order 31.03.1994, the income was revised and deduction u/s 80I was allowed on the profits of the industrial undertaking as reduced by interest paid to beneficiaries. The matter was agitated before the CIT(A) and CIT(A) passed order on 31.03.1995 holding that 75% of interest expenditure of Rs. 1,98,56,822/- amounting to Rs. 1.40 lakhs should be reduced from the profits of the industrial undertaking while working out deduction u/s 80I of the Act. 3.2 Mr. Soparkar submitted that against the said order, the assessee preferred appeal before the Tribunal and the Tribunal confirmed the order of CIT(A) dated 31.03.1995 notwithstanding the fact that income is already subject to tax under KVSS. He submitted that against the said order of the Tribunal the assessee also preferred a Miscellaneous Application under section 254(2) of the Act which also came to be rejected. He therefore submitted that the matter may be remanded to the Tribunal for reconsideration afresh in light of the decision of the Tribunal rendered in ITA No. 2442/Ahd/94 dated 02.02.2000. 4. Mr. Mehta, learned Advocate appearing for the respondent supported the impugned order and submitted that no interference is called for. In the alternative, Mr. Mehta submitted that, this Court may keep it open for both the sides to raise contentions on the issue in case the matter is remanded to the Tribunal for reconsideration. Page 3 of 5

O/TAXAP/211/2002 JUDGMENT 5. We have heard learned counsel for both the sides and have perused the record of the case. Considering the fact that the similar issue in respect of the same assessee was considered by the Tribunal in ITA No. 2442/Ahd/94 on 02.02.2000, the Tribunal ought to have considered the facts and reasonings given in the said decision before coming to a conclusion in the present matter. It appears that through oversight the assessee could not place on record the necessary documents before the Tribunal. However, while considering the Miscellaneous Application, the Tribunal ought to have taken note of the matter that due to inadvertent error, the same could not be pointed out to the Tribunal. 6. Therefore we are of the opinion that the matter is required to be remanded to the Tribunal, who shall consider the issue afresh in light of the order passed in ITA No. 2442/Ahd/94 and shall render its decision, after considering the contentions raised by both the sides. Accordingly, the matter is remanded to the Tribunal for reconsideration. The Tribunal shall decide the issue afresh being uninfluenced by the observations made by the Tribunal earlier as also by this Court as this Court has not entered into the merits of the matter. It shall be open to both the sides to raise all contentions. The impugned order passed by the Tribunal are set aside. Appeal is allowed to the aforesaid extent. (K.S.JHAVERI, J.) Page 4 of 5

O/TAXAP/211/2002 JUDGMENT (K.J.THAKER, J) divya Page 5 of 5