THE COMMISSIONER OF INCOME TAX-I, COCHIN vs. M/S.APOLLO TYRES LTD.
What did the High Court hold?
The High Court noted that an identical issue for a different assessment year had been considered by the Court in ITA No. 973 of 2011, with a judgment delivered on March 13, 2019. In that judgment, the Court had answered the issue against the Revenue. Consequently, the present appeal was disposed of in terms of the aforementioned judgment. The specific reasoning or ratio decidendi from the prior judgment that applied to these issues is not detailed in this order, but it implies that the Tribunal's decision, which was against the Revenue, was upheld based on the precedent. No specific operative directions like deletion or remand are mentioned, other than disposing of the appeal in line with the prior judgment.
What were the facts?
The Revenue has filed an appeal before the High Court of Kerala challenging an order passed by the Income Tax Appellate Tribunal (ITAT), Cochin Bench, for the assessment year 1997-98. The appeal concerns the treatment of commission payments made by the assessee, M/s. Apollo Tyres Ltd., to M/s. Sunrays Properties and Investment (P) Ltd. The Assessing Officer had treated this commission as income of the assessee. The ITAT interfered with this order. The procedural history indicates that the High Court is now considering the Revenue's appeal against the ITAT's decision.
What were the issues?
The High Court was asked to decide two substantial questions of law: 1. Whether the commission payment to M/s. Sunrays Properties and Investment (P) Ltd. constitutes a diversion of funds and hence income of the assessee, and if the Tribunal was justified in interfering with the Assessing Officer's order treating it as the assessee's income. 2. Whether the incomes earned by investment companies, which are considered part of the assessee company, are the incomes of the assessee, as held by the Assessing Officer. The Revenue contended that the commission payment was a diversion of funds and thus income of the assessee, and that the investment companies being part of the assessee meant their income was the assessee's income. The judgment does not record specific arguments from the assessee's side regarding these issues, but notes that the Tribunal had interfered with the Assessing Officer's order.
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON & THE HONOURABLE MR.JUSTICE N.ANIL KUMAR THURSDAY ,THE 14TH DAY OF MARCH 2019 / 23RD PHALGUNA, 1940 ITA.No. 204 of 2011 AGAINST THE ORDER/JUDGMENT IN ITA 112/2004 of I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S: THE COMMISSIONER OF INCOME TAX-I, COCHIN. BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S: M/S.APOLLO TYRES LTD. 6TH FLOOR,CHERUPUSHPAM BUILDINGS, SHANMUGHAM ROAD, KOCHI-682 031 BY ADVS. SRI.BINU MATHEW SRI.B.J.JOHN PRAKASH SRI.JOSEPH KODIANTHARA (SR.) SRI.MATHEWS K.UTHUPPACHAN SRI.TERRY V.JAMES SRI.TOM THOMAS (KAKKUZHIYIL) SRI.V.ABRAHAM MARKOS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 14.03.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
-2- I.T.A. No. 204 of 2011 JUDGMENT Ramachandra Menon, J. This appeal is at the instance of the Revenue. Challenge is against Annexure C order passed by the Income Tax Appellate Tribunal, Cochin Bench for the assessment year 1997 - '98. 2. The questions suggested by the appellant as involving substantial questions of law, are in the following terms : 1. Whether on the facts and in the circumstances of the case is not the commission payment to M/s Sunrays Properties and Investment (P) Ltd. Diversion of funds and hence income of the assessee and the Tribunal is justified in interfering with the order of the assessing officer in treating the amount as income of the assessee ? 2. Whether on the facts and in the circumstances of the case and for the reasons stated in the order of the Assessing Officer and in view of the fact that these investment companies are part of the assessee company are not the incomes earned by the the incomes of the assessee as held by the Assessing Officer ?
-3- I.T.A. No. 204 of 2011 3. When the matter is taken up for consideration, it is brought to the notice of this Court by Sri. Christopher Abraham, the learned standing counsel appearing for the appellant Revenue, that exactly similar issue for another assessment year was considered by this Court and the same stands answered against the Revenue, as per judgment dated 13.03.2019 in I.T.A. No. 973 of 2011. 4. In the said circumstances, the appeal stands disposed of in terms of the judgment dated 13.03.2019 in I.T.A. No. 973 of 2011. Sd/- P.R.RAMACHANDRA MENON JUDGE Sd/- N.ANIL KUMAR JUDGE kmd/das
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