COMMISSIONER OF INCOME TAX-III vs. TRANS INDIA CINEMA

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TAXAP/744/2010HC GujaratGJHC24026733201011 June 2012Bench: HONOURABLE MR. JUSTICE JAYANT PATEL,HONOURABLE MR. JUSTICE C.L. SONI3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeals were concluded by findings of fact. It noted that the ITAT had upheld the order of the CIT(Appeals), which had deleted the additions made by the Assessing Officer. The Court referred to a previous decision of a Division Bench in Commissioner of Income Tax-I vs. Miraa Processors Pvt.Ltd. (decided on 11.4.2012), which, after considering Apex Court decisions, held that the assessee had not claimed any cessation of liability. The High Court found no error in the orders of the CIT(Appeals) and the Tribunal, concluding that no substantial questions of law arose for consideration. Consequently, the appeals were dismissed.

What were the facts?

The Revenue filed two appeals before the High Court of Gujarat against the order of the Income Tax Appellate Tribunal (ITAT). The Assessing Officer (AO) had made additions to the assessee's income under Section 41(1) of the Income Tax Act, 1961, totaling Rs. 20,85,103/- for advances received against tenements/shops, Rs. 2,33,840/- in respect of sundry creditors, and Rs. 22,51,000/- for advance from Ganesh Housing Corporation. The Commissioner of Income Tax (Appeals) had allowed the assessee's appeal, setting aside the AO's additions. The ITAT had subsequently dismissed the Revenue's appeals, upholding the CIT(A)'s order. The Revenue's appeals to the High Court challenged the ITAT's decision.

What were the issues?

1. Whether the Appellate Tribunal was correct in law and on facts in reversing the order of the CIT(A) and deleting the addition of Rs. 20,85,103/- made in respect of advances received against tenements/shops, as per Section 41(1) of the Income Tax Act? 2. Whether the Appellate Tribunal was correct in law and on facts in reversing the order of the CIT(A) and deleting the addition of Rs. 2,33,840/- made in respect of sundry creditors, as per Section 41(1) of the Income Tax Act? 3. Whether the Appellate Tribunal was correct in law and on facts in reversing the order of the CIT(A) and deleting the addition of Rs. 22,51,000/- made in respect of advance from Ganesh Housing Corporation, as per Section 41(1) of the Income Tax Act? Assessee's Contentions: The judgment does not record specific contentions made by the assessee before the High Court. However, the fact that the CIT(A) allowed the appeal and the ITAT upheld this decision implies the assessee argued against the additions made by the AO. Revenue's Contentions: The Revenue contended that the Appellate Tribunal erred in reversing the order of the CIT(A) and deleting the additions made by the Assessing Officer concerning advances received against tenements/shops, sundry creditors, and advance from Ganesh Housing Corporation.

Which sections of the Income-tax Act were involved?

Section 41(1)

AI-generated summary — verify with the full judgment below

TAXAP/743/2010 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 743 of 2010 With TAX APPEAL No. 744 of 2010 For Approval and Signature: HONOURABLE MR.JUSTICE V. M. SAHAI HONOURABLE MR.JUSTICE N.V. ANJARIA ========================================= 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-III - Appellant(s) Versus TRANS INDIA CINEMA - Opponent(s) ========================================= Appearance : MRS MAUNA M BHATT for the Appellant. MR SN DIVATIA for the Opponent. ========================================= CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI and HONOURABLE MR.JUSTICE N.V. ANJARIA Date : 11/06/2012

TAXAP/743/2010 2/3 JUDGMENT ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE V. M. SAHAI) 1. The Revenue has filed these two Appeals. We have heard Ms.Mauna M.Bhatt, learned counsel appearing for the revenue and Mr.S.N.Divetia, learned counsel appearing for the respondent. The Assessing Officer passed an assessment order on 16.10.2007 under section 41(1) of the Income Tax Act (for short "The Act") by making certain additions. Thereafter the respondent filed an appeal. The Commissioner of Income Tax (Appeals) allowed the Appeal by order dated 19.1.2009 and set aside the order of the assessing officer. The Revenue filed Appeals before Income Tax Appellate Tribunal which had been dismissed. 2. The Assessing Officer passed an order making two additions, one with regard to advance received against sanitary shop and the other in respect of sundry. Therefore, the respondents filed two appeal before Commissioner of Income Tax (Appeals) which were allowed by common order dated 19.1.2009 and addition was deleted. The appellant challenged the order of CIT(Appeals) whereas the assessee also filed appeal. Both the appeals were heard together and decided by common judgment and appeal of the revenue was dismissed and the appeal of the assessee which was with regard to addition was allowed and additions were set aside. Tax Appeal No.743 of 2010 has been filed by the revenue on the following proposed substantial questions of law. A. Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by CIT(A) and thereby deleting the addition of Rs. 20,85,103/- made in respect of advances received against tenements/shops ?

TAXAP/743/2010 3/3 JUDGMENT B. Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by CIT(A) and thereby deleting the addition of Rs./ 2,33,840/- made in respect of Sundry Creditors ? C. Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by CIT(A) and thereby deleting the addition of Rs.22,51,000/- made in respect of advance from Ganesh Housing Corporation? 2. We have heard learned counsel for the parties and we have gone through the record. The Division Bench of this Court in Tax Appeal No.474 of 2010 Commissioner of Income Tax-I vs. Miraa Processors Pvt.Ltd. decided on 11.4.2012, after considering the decision of the Apex Court has held that the assessee has not claimed any cessastion of any kind of liability. Since the order of CIT (Appeals) has been upheld by the Tribunal and finding of fact has been recorded that additions made by the Assessing Officer were rightly deleted by the Commissioner of Income-Tax (Appeals), we are of the considered opinion that these Appeals are concluded by findings of fact and we do not find any error in the order of CIT (Appeals) and the order of the Tribunal. No substantial questions of law arise for consideration in these Appeals. Both these Tax Appeals are accordingly dismissed. However, there shall be no order as to costs.

(V.M.SAHAI,J) (N.V.ANJARIA,J) ***vcdarji

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