THE PRINCIPAL COMMISSIONER OF INCOME TAX 2 vs. GANESH HOUSING CORPORATION LTD.

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TAXAP/814/2019HC GujaratGJHC24065989201913 January 2020Bench: HONOURABLE MR. JUSTICE J.B.PARDIWALA,HONOURABLE MR. JUSTICE BHARGAV D. KARIA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Appeal. The Court stated that for the reasons recorded while dismissing another Tax Appeal (No. 734 of 2019), this Tax Appeal also fails. The judgment does not provide specific reasoning for each issue, but the dismissal of the appeal implies that the Court found no substantial question of law or agreed with the Tribunal's findings. The operative direction was the dismissal of the appeal. No issues were expressly left undecided.

What were the facts?

The Revenue has filed this Tax Appeal under Section 260A of the Income Tax Act, 1961, challenging an order dated 15.05.2019 passed by the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench 'B'. The appeal pertains to the assessment year 2009-2010 and concerns the assessee, Ganesh Housing Corporation Ltd. The ITAT's order upheld the decision of the Commissioner of Income Tax (Appeals) [CIT(A)] in deleting two disallowances made by the Assessing Officer (AO). The first disallowance related to a deduction under Section 80IB(10) of the Act amounting to Rs. 71,99,242. The second disallowance pertained to proportionate interest expense of Rs. 8,67,12,000.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the Tribunal erred in law and facts in upholding the CIT(A)'s deletion of the AO's disallowance of Rs. 71,99,242 relating to deduction under Section 80IB(10) of the Act, despite the AO establishing with evidence that the assessee did not fulfill the requisite conditions for claiming this deduction? (Section 80IB(10)) 2. Whether the Tribunal erred in law and facts in upholding the CIT(A)'s deletion of the AO's disallowance of Rs. 8,67,12,000 on account of proportionate interest expense, considering the assessee incurred substantial interest expenses while giving interest-free loans? Assessee's contentions are not recorded in the judgment. Revenue's contentions were that the assessee did not fulfill the conditions for Section 80IB(10) deduction and that proportionate interest expense should be disallowed due to interest-free loans being provided. The Revenue relied on the AO's findings and evidence.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80IB(10)

AI-generated summary — verify with the full judgment below

C/TAXAP/814/2019 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 814 of 2019 ========================================================== THE PRINCIPAL COMMISSIONER OF INCOME TAX 2 Versus GANESH HOUSING CORPORATION LTD. ========================================================== Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA

Date : 13/01/2020

ORAL ORDER (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1. This Tax Appeal is filed under Section 260A of the Income Act, 1961 (for short the “Act”) at the instance of Revenue and it is directed against the order   dated   15.05.2019   passed   by   the   Income   Tax Appellate Tribunal, Ahmedabad Bench 'B', Ahmedabad in ITA   No.452/Ahd/2014   for   the   assessment   year   2009­ 2010. 2. The Revenue has proposed the following questions as   substantial   questions   of   law   involved   in   this appeal:­ “2(A)  Whether  the Appellate  Tribunal  had erred in law and on facts in upholding the order of the   CIT(A)   deleting   the   disallowance   of Rs.71,99,242/­ made by the Assessing Officer on Page 1 of 2

C/TAXAP/814/2019 ORDER account  of deduction  under Section  80IB(10)  of the Act without appreciating the fact that the Assessing   Officer   had   established   with   proven evidences that the assessee did not fulfill the requisite   conditions   for   claiming   deduction under Section 80IB(10) of the Act? (B) Whether Appellate Tribunal has erred in law and   on   facts   in   upholding   the   order   of   the CIT(A)   deleting   the   disallowance   made   by   the Assessing   Officer   on   account   of   proportionate interest   expense   of   Rs.8,67,12,000/­   without appreciating fact that the assessee company has incurred   substantial   interest   expenses   while giving interest free loans?” 3.   For   the   reasons   recorded   by   us   today   while dismissing the Tax Appeal No.734 of 2019, this Tax Appeal also fails and is hereby dismissed. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) GIRISH Page 2 of 2

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