COMMISSIONER OF INCOME TAX LDH vs. M/S VARDHMAN SPIINING AND GENERAL MILLS

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ITA/167/2003HC Punjab & HaryanaPHHC01029213200329 March 2016Bench: THE TAXING OFFICER,MR. JUSTICE SATPAL2 pages
AI SummaryWithdrawn

What did the High Court hold?

The appeal was dismissed as not pressed. The learned counsel for the appellant-revenue submitted that in view of CBDT Circular No. 21/2015 dated 10.12.2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, the revenue did not wish to press the appeal as the tax effect involved was less than Rs. 20 lacs. The revenue prayed for liberty to file an application for revival of the appeal if something survived therein. The Court dismissed the appeal as not pressed with liberty as prayed for. It was clarified that the withdrawal of the appeal by the revenue would not be taken as an affirmation of the Tribunal's order on merits, and the legal issues were left open to be adjudicated in an appropriate case.

What were the facts?

The appeal was filed by the Commissioner of Income Tax-I, Ludhiana (appellant-revenue) against the order dated 26.03.2003 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (A). The assessment year in question was 1991-92. The appeal was filed under Section 260A of the Income Tax Act, 1961. The dispute involved disallowance of Rs. 1,61,504/- on account of advertisement expenses, and issues related to deduction under Section 80-M and the applicability of Explanation 'baa' below sub-section 4B of Section 80HHC concerning rental income. The appeal was listed for hearing before the High Court of Punjab and Haryana.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the Tribunal erred in deleting the disallowance of Rs. 1,61,504/- made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals) on account of advertisement expenses. 2. (a) Whether the Tribunal was correct in ignoring expenditure incurred for earning dividend income while allowing relief under Section 80-M, without examining if such expenditure was incurred to earn dividend income. (b) Whether the Tribunal was correct in ignoring that dividend income means gross dividend income as reduced by related expenditure. 3. Whether the Tribunal was correct in ignoring Explanation 'baa' below sub-section 4B of Section 80HHC and taking rental income out of its ambit by holding it as business income. The appellant-revenue contended that the Tribunal erred on these points. The respondent-assessee's contentions are not explicitly recorded in the provided text, other than implicitly by the Tribunal's decision.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80-M,Section 80HHC

AI-generated summary — verify with the full judgment below

ITA No. 167 of 2003 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 167 of 2003 (O&M) Date of Decision: 29.03.2016 Commissioner of Income Tax-I, Ludhiana .......Appellant Versus M/s Vardhman Spinning & General Mills Ltd. ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Rajesh Katoch, Advocate for the appellant. RAJESH BINDAL,J. This appeal has been filed under Section 260 A of the Income Tax Act, 1961 (for short 'the Act'), against the order dated 26.03.2003 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (A), in ITA Nos.973/CHANDI/96 and 917/CHANDI/96, for the assessment year 1991-92, raising the following substantial questions of law: (i) Whether in view of the circumstances and facts of the case, the Hon'ble Income Tax Appellate Tribunal erred in deleting the disallowance made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals) amounting to Rs.1,61,504/- on account of items presented by the assessee and are in the nature of advertisement? REEMA SAINI 2016.04.04 13:52 I attest to the accuracy and authenticity of this document High Court, Chandigarh

ITA No. 167 of 2003 (O&M) -2- (ii) (a) Whether, the Income Tax Appellate Tribunal is correct in ignoring the expenditure incurred for earning the Dividend Income, while allowing relief u/s 80-M without examining the fact that such expenditure was actually incurred to earn dividend income which was liable to be considered for deduction u/s 80-M? (b) Whether the Income Tax Appellate Tribunal is correct in ignoring the fact that dividend income means gross dividend income as reduced by related expenditure? (iii) Whether the income Tax Appellate Tribunal was correct in ignoring explanation baa below sub section 4B of Section 80HHC and taking the rental income out of the ambit of Explanation baa by holding it as business income? Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, he does not wish to press the present appeal, as the tax effect involved is less than ` 20 lacs. However, he prays that liberty be granted to the revenue to file an application for revival of the appeal in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the appeal by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 29.03.2016 JUDGE reema REEMA SAINI 2016.04.04 13:52 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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