COMMISSIONER OF INCOME TAX-II vs. M/S HIPOLIN LTD

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TAXAP/634/2011HC GujaratGJHC24025364201120 June 2012Bench: HONOURABLE MR. JUSTICE VIJAY MANOHAR SAHAI,HONOURABLE MR. JUSTICE N.V.ANJARIA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Appeal. The Court noted that a Division Bench of the same High Court had previously decided Tax Appeal No. 870 of 2010 on 25.7.2011, concerning the same assessee and the same questions of law. In that prior decision, the Division Bench had considered both questions and concluded that they did not raise substantial questions of law. Agreeing with the view taken in the earlier Division Bench decision, the present Court found that no question of law, let alone a substantial question of law, arose for its consideration. Therefore, the appeal was dismissed. The operative direction is the dismissal of the Tax Appeal.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax-II (the Revenue) against an order of the Income Tax Appellate Tribunal (ITAT). The assessee is M/s Hipolin Ltd. The appeal concerns the assessment year(s) not explicitly stated but implied to be related to the ITAT's decision. The Revenue is challenging the ITAT's decision to not treat short-term capital gains (STCG) of Rs. 17,35,041 and long-term capital gains (LTCG) of Rs. 28,63,080 as business income of the assessee. The procedural history indicates that the ITAT had upheld the order of the CIT(A), which directed the Assessing Officer to treat these gains as capital gains and not business income. The High Court is considering the appeal against the ITAT's order.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in not treating the Short Term Capital Gain of Rs.17,35,041/- and Long Term Capital Gain of Rs.28,63,080/- as business income of the assessee? 2. Whether the Appellate Tribunal is right in law and on facts in upholding the order of the CIT (A), and thereby directing the Assessing Officer to treat the short term capital gain and long term capital gain as “capital gain” and not as business income? Contentions: Assessee: Not recorded in the judgment. Revenue: Argued that the STCG and LTCG should be treated as business income. The Revenue is challenging the ITAT's decision on these two questions of law.

AI-generated summary — verify with the full judgment below

TAXAP/634/2011 1/2 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 634 of 2011 For Approval and Signature: HONOURABLE MR.JUSTICE V. M. SAHAI Sd/- HONOURABLE MR.JUSTICE N.V. ANJARIA 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, 1950 or any order made thereunder ? NO 5. Whether it is to be circulated to the civil judge ? NO ====================================== COMMISSIONER OF INCOME TAX-II - Appellant Versus M/S HIPOLIN LTD - Opponent ====================================== Appearance : MR M R BHATT, SENIOR STANDING COUNSEL ASSISTED BY MRS MAUNA M BHATT for Appellant. None for Opponent. ====================================== CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI and HONOURABLE MR.JUSTICE N.V. ANJARIA Date : 20/06/2012

TAXAP/634/2011 2/2 JUDGMENT ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE V. M. SAHAI) We have heard Mr. M.R. Bhatt, learned Senior Standing Counsel appearing for the revenue on the following two proposed questions of law :- “[A] Whether the Appellate Tribunal is right in law and on facts in not treating the Short Term Capital Gain of Rs.17,35,041/- and Long Term Capital Gain of Rs.28,63,080/- as business income of the assessee ? [B] Whether the Appellate Tribunal is right in law and on facts in upholding the order of the CIT (A), and thereby directing the Assessing Officer to treat the short term capital gain and long term capital gain as “capital gain” and not as business income ?” 2. With regard to the same assessee, on the same questions of law, Tax Appeal No.870 of 2010 has been decided on 25.7.2011 by Division Bench of this Court. We agree with the view taken by the Division Bench in Tax Appeal No.870 of 2010 wherein both the questions as raised in this Tax Appeal were considered and were not accepted to raise substantial questions of law. Following the above mentioned Division Bench decision, we find that no question of law, much less, any substantial questions of law arise for the consideration of this Court. Accordingly, we dismiss this Tax Appeal. Sd/- [V. M. SAHAI, J.] Sd/- [N. V. ANJARIA, J.] Savariya

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