THE COMMISSIONER OF INCOME TAX vs. M/S. KERALA STATE INDUSTRIAL DEVELOPMENT

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ITA/111/2008HC KeralaKLHC01027016200823 October 2008Bench: HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU,HONOURABLE MR.JUSTICE A.K.BASHEER3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the questions of law framed by the Revenue were no longer debatable. This was in view of the Court's own judgment in I.T.A.No.212 of 2001, dated 4.2.2008, which was in the assessee's own case for the assessment year 1993-94. Respectfully following the observations in that prior decision, the High Court found that the appeal filed by the Revenue required to be rejected. The questions of law were answered against the Revenue and in favour of the assessee. The operative direction was to reject the appeal.

What were the facts?

The appeal is filed by the Revenue against the order dated 19.10.2004 passed by the Income Tax Appellate Tribunal (ITAT), Cochin Bench, in I.T.A.No.292/Coch//2000. The assessment year in question is 1997-98. The assessee is Kerala State Industrial Development Corporation Limited. The dispute concerns the claim of loss on revaluation of investments by the assessee in computing its taxable income. The Revenue has challenged the ITAT's decision allowing this claim.

What were the issues?

The Tribunal had to decide the following questions of law framed by the Revenue: 1. Whether, on the facts and in the circumstances of the case, the assessee is entitled to claim the loss on revaluation of the investments as a loss in computing its taxable income? 2. Whether, on the facts and in the circumstances of the case, and in the absence of any proof from the assessee as to whether the investment was in the nature of trade investment or not the assessee is entitled to claim and the Tribunal is right in allowing the claim for the alleged shortage on loss? The Revenue contended that the assessee was not entitled to claim the loss on revaluation of investments. The judgment does not record specific arguments from the assessee's side, but it implies the assessee claimed the loss. The Revenue's arguments are implicitly addressed by the court's reliance on a previous judgment.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU

& THE HONOURABLE MR. JUSTICE A.K.BASHEER THURSDAY, THE 23RD OCTOBER 2008 / 1ST KARTHIKA 1930

I.T.A.No.111 of 2008

---------------------------- ORDER DATED 19.10.2004 IN I.TA.NO.292/COCH//2000 OF THE INCOME TAX APPELLATE TRIBUNAL,COCHIN BENCH, COCHIN (ASSESSMENT YEAR 1997-98)

.................... APPELLANT/APPELLANT:- ----------------------------------- THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY ADV. SRI.P.K.RAVINDRANATHA MENON (SR.), STANDING COUNSEL, GOVERNMENT OF INDIA (TAXES), SRI.GEORGE K. GEORGE, SC FOR IT. SRI.JOSE JOSEPH, STANDING COUNSEL FOR INCOME TAX. RESPONDENT/RESPONDENT:- ------------------------------------------- KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION LIMITED, KESTON ROAD, KOWDIAR, THIRUVANANTHAPURAM.

THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 23/10/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

H.L.Dattu,C.J. & A.K.Basheer, J. ------------------------------------------- I.T.A.No.111 of 2008 -------------------------------------------- Dated, this the 23rd October, 2008 JUDGMENT H.L.Dattu,C.J. This appeal is directed against the orders passed by the Income Tax Appellate Tribunal, Cochin Bench, Cochin, in I.T.A.No.292(Coch)/2000 dated 19.10.2004, for the assessment year 1997-98. (2) The Revenue has framed the following questions of law for our consideration and decision. They are as under: “1. Whether, on the facts and in the circumstances of the case, the assessee is entitled to claim the loss on revaluation of the investments as a loss in computing its taxable income? 2. Whether, on the facts and in the circumstances of the case, and in the absence of any proof from the assessee as to whether the investment was in the nature of trade investment or not the assessee is entitled to claim and the Tribunal is right in allowing the claim for the alleged shortage on loss?” (3) The questions of law framed by the Revenue are no more debatable in view of the judgment of this Court in I.T.A.No.212 of 2001, dated 4.2.2008, in the assessee's own case, for the assessment year 1993-94. (4) Respectfully following the observations made in the aforesaid decision, the appeal filed by the Revenue requires to be rejected

I.T.A.No.111 of 2008 - 2 - and it is, accordingly, rejected and the questions of law framed by the Revenue are answered against the Revenue and in favour of the assessee. Ordered accordingly.

H.L.Dattu Chief Justice

A.K.Basheer Judge vku/-

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