COMMISSIONER OF IT - I vs. M/S MAJESTIC AUTO LTD

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ITA/380/2005HC Punjab & HaryanaPHHC01074595200511 May 2016Bench: MR. JUSTICE SATPAL,THE TAXING OFFICER2 pages
AI SummaryWithdrawn

What did the High Court hold?

The appeal was dismissed as not pressed. The Revenue's counsel, citing CBDT circulars No. 21/2015 dated 10.12.2015 and No. 279/Misc/M-142/2007-ITJ (Part) dated 08.03.2016, stated that they did not wish to press the appeal as the tax effect was less than ₹20 lacs. Liberty was granted to the Revenue to file an application for revival of the appeal if something survives. The High Court clarified that the withdrawal of the appeal by the Revenue would not be considered an affirmation of the Tribunal's order on merits, and the legal issues raised were left open for adjudication in an appropriate case. Therefore, no decision was reached on the merits of the substantial questions of law.

What were the facts?

The Revenue, Commissioner of Income Tax-I, Ludhiana, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 28.02.2005 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench 'A'. The appeal pertains to the assessment year 1997-98 and challenges the ITAT's decision in ITA Nos. 413/Chandi/2001 and 477/Chandi/2001. The dispute involves the reduction of the value of consumable stores not reflected in the closing stock and the applicability of the explanation to clause VIII of Section 115JA of the Act. The amount in dispute is not explicitly stated but is implied to be below the threshold for pressing the appeal.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether the ITAT was justified in law in allowing relief to the respondent company by setting aside the orders of the CIT(A)/Assessing Officer on the issue of reducing the value of consumable stores not reflected in the closing stock, despite these stores not being accounted for in the closing stock? 2. Whether the ITAT was justified in law in directing the benefit to the respondent company in accordance with the explanation to clause VIII to Section 115JA of the IT Act, ignoring that this explanation was effective from 01.04.1998 and not applicable retrospectively? The Revenue argued that the ITAT erred in allowing relief regarding consumable stores not accounted for in closing stock. Regarding the second issue, the Revenue contended that the explanation to Section 115JA was not applicable retrospectively. The judgment does not record specific arguments from the respondent company on these issues.

Which sections of the Income-tax Act were involved?

Section 260A,Section 115JA

AI-generated summary — verify with the full judgment below

ITA No. 380 of 2005 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 380 of 2005 (O&M) Date of Decision: 11.05.2016 Commissioner of Income Tax-I, Ludhiana .......Appellant Versus M/s Majestic Auto Ltd., ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Rajesh Katoch, 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 28.2.2005 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A' Chandigarh, in ITA Nos. 413/Chandi/2001 and 477/Chandi/2001, for the assessment year 1997-98, raising the following substantial questions of law: (i) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal is justified in law in allowing relief to the Respondent company by setting aside the orders of the CIT(A)/Assessing Officer, on the issue of reduction of the value of the consumable stores not reflected in the closing stock, ignoring that the value of consumable stores and tools was not accounted for in the closing stock? (ii) Whether on the facts and circumstances of the case, REEMA SAINI 2016.05.18 12:43 I attest to the accuracy and authenticity of this document High Court, Chandigarh

ITA No. 380 of 2005 (O&M) -2- the Hon'ble Income Tax Appellate Tribunal is justified in law in directing to give the benefit to the respondent company in accordance with the explanation to clause VIII to Section 115JA of I.T. Act, by ignoring that the said explanation was introduced with effect from 1.4.1998 and was not applicable retrospectively? 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) 11.05.2016 JUDGE reema REEMA SAINI 2016.05.18 12:43 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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