THE COMMISSIONER OF INCOME TAX vs. M/S MOHANN BOTTLING CO.LTD.

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ITA/37/2003HC Punjab & HaryanaPHHC01008708200321 April 2016Bench: THE TAXING OFFICER,MR. JUSTICE SATPAL2 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as not pressed. The Revenue, citing CBDT circulars regarding tax effect, expressed its unwillingness to pursue the appeal. The Court granted the Revenue liberty to file an application for revival of the appeal if circumstances warranted. It was clarified that the withdrawal of the appeal by the Revenue would not be construed as an affirmation of the ITAT's order on merits. The legal issue raised by the Revenue was explicitly left open for adjudication in an appropriate future case. Therefore, no finding was reached on the substantial question of law regarding whether the excess of security deposits over refunds was a trading receipt.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Patiala (Revenue) against an order dated 21.8.2002 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, for the assessment year 1992-93. The dispute concerned whether the excess of 'security deposits' over 'refunds' received by the assessee, M/s Mohan Bottling Co. (P) Ltd., on the sale of bottles constituted a trading receipt. The ITAT had previously ruled in favor of the assessee on this matter. The present appeal was filed under Section 260A of the Income Tax Act, 1961.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in holding that the excess of 'security deposits' over 'refunds' received by the assessee on sale of bottles is not a trading receipt? The Revenue contended that the ITAT's decision was incorrect. The Revenue relied on Circular No. 21/2015 dated 10.12.2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by the Central Board of Direct Taxes, stating that they did not wish to press the appeal as the tax effect involved was less than ₹20 lacs. The Revenue prayed for liberty to file an application for revival of the appeal if something survived therein. The judgment does not record any specific arguments from the assessee's side regarding the merits of the issue.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

ITA No. 37 of 2003 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 37 of 2003 (O&M) Date of Decision: 21.04.2016 The Commissioner of Income Tax, Patiala .......Appellant Versus M/s Mohan Bottling Co. (P) Ltd. ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Zora Singh Klar, Advocate for the appellant. Mr. Alok Mittal, Advocate for the respondent. 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 21.8.2002 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (B), in ITA No.1122/Chandi/95, for the assessment year 1992- 93, raising the following substantial question of law: “Whether on the facts and in the circumstances of the case, the ITAT was right in law in holding that excess of 'security deposits' over 'refunds' received by the assessee on sale of bottles is not a trading receipt?”

REEMA SAINI 2016.04.26 14:44 I attest to the accuracy and authenticity of this document High Court, Chandigarh

ITA No. 37 of 2003 (O&M) -2- 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) 21.04.2016 JUDGE reema REEMA SAINI 2016.04.26 14:44 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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