COMMISSIONER OF INCOME TAX vs. MARDIA COPPER INDUSTRIES

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TAXAP/744/2006HC GujaratGJHC24037730200610 December 2014Bench: HONOURABLE MR. JUSTICE KS JHAVERI,HONOURABLE MR. JUSTICE K.J.THAKER3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed both appeals filed by the Revenue. The Court noted that the learned advocate for the Revenue stated that the amount involved in the present case was small and had a low revenue effect. In view of the provisions of Section 268A and Circular No. 2/2005, the Revenue ought not to have filed the appeal. Therefore, the question of law framed by the Court was answered in favour of the assessee and against the Revenue. Both appeals were dismissed accordingly. The specific reasoning of the ITAT regarding the job work receipts was not elaborated upon by the High Court, as the dismissal was based on the revenue's own submission regarding the low tax effect and the applicability of Section 268A and the circular.

What were the facts?

The Revenue, as the appellant, has challenged the judgment and order dated September 22, 2005, passed by the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench ‘A’. The ITAT's order pertains to ITA No. 5105/Ahd/1996 for Assessment Year (AY) 1992-93 and ITA No. 703/Ahd/1997 for AY 1993-94. The appeals were admitted by the High Court, which framed a substantial question of law. The dispute involves the computation of profit eligible for deduction under Section 80-I, specifically concerning the exclusion of job work receipts. The Revenue argued that the ITAT erred in directing the Assessing Officer not to exclude job work receipts without ascertaining their connection to the industrial undertaking's activities.

What were the issues?

1. Whether the Appellate Tribunal has erred in law and on facts in directing the Assessing Officer not to exclude any amount on account of job work receipts while computing the profit eligible for deduction under Section 80-I, without it being ascertained as to whether the said receipts were connected with the activities of the Industrial Undertaking? Assessee's Contention: The assessee (Mardia Copper Industries) did not explicitly present arguments in the provided text. However, the outcome suggests their position was upheld. Revenue's Contention: The Revenue argued that the Appellate Tribunal erred in its direction to the Assessing Officer. The Revenue contended that the ITAT should not have allowed the exclusion of job work receipts without a proper ascertainment of whether these receipts were indeed connected with the activities of the industrial undertaking, which is a prerequisite for claiming deduction under Section 80-I. The Revenue also cited Section 268A and Circular No. 2/2005, suggesting the appeal should not have been pursued due to a small amount and low revenue effect.

Which sections of the Income-tax Act were involved?

Section 80I,Section 268A

AI-generated summary — verify with the full judgment below

O/TAXAP/743/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 743 of 2006 With TAX APPEAL NO. 744 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 MARDIA COPPER INDUSTRIES....Opponent(s) ================================================================ Appearance: MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1 MR. HARDIK V VORA, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and Page 1 of 3

O/TAXAP/743/2006 JUDGMENT HONOURABLE MR.JUSTICE K.J.THAKER

Date : 10/12/2014

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE K.J.THAKER) 1. By way of these appeals, the appellant- Revenue has challenged the judgment and order dated 22.9.2005 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench ‘A’ in ITA no. 5105/Ahd/1996, for AY 1992-93 and ITA No. 703/Ahd/1997 for AY 1993-94. 2. While admitting these appeals, This Court has framed the following substantial question of law: “Whether the Appellate Tribunal has erred in law and on facts in directing the Assessing Officer not to exclude any amount on account of job work receipts while computing the profit eligible for deduction u/s. 80I, without it being ascertained as to whether the said receipts were connected with the activities of the Industrial Undertaking ?” 3. Heard the learned advocates appearing for the parties and considered the submissions. Mr. Patel learned advocate states that the amount involved in the present case is small Page 2 of 3

O/TAXAP/743/2006 JUDGMENT one and there is low revenue effect, and therefore, in view of the provisions of section 268(A) and Circular No. 2/2005, the revenue ought not to have come in appeal, and therefore, this appeal is required to be dismissed. In that view of the matter, the question is answered in favour of the assessee and against the revenue. Both these appeals are dismissed accordingly. (K.S.JHAVERI, J.) (K.J.THAKER, J) mandora Page 3 of 3

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