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

ITA/508/2005HC Punjab & HaryanaPHHC01075211200529 March 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, with liberty granted to the revenue to file an application for revival of the appeal as prayed for. The court clarified that the withdrawal of the appeal by the revenue would not be taken as an affirmation of the Tribunal's order on merits. The legal issue, as claimed by the revenue, was left open to be adjudicated in an appropriate case. Therefore, no finding was given on the merits of the substantial question of law regarding the under-valuation of stock and the accounting of consumable stores and tools.

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 17.12.2004 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (A). The appeal pertained to the assessment year 1996-97 and challenged the Tribunal's decision to delete an addition of ₹8,55,033/- made by the Assessing Officer on account of under-valuation of stock. The specific issue was whether the value of closing stock of consumable stores and tools had been accounted for. The appeal was filed before the High Court of Punjab and Haryana at Chandigarh.

What were the issues?

1. Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was justified in law in allowing relief to the Respondent Company by deleting the addition of ₹8,55,033/- made on account of under valuation of stock, ignoring that the value of closing stock of consumable stores and tools was not accounted for in the closing stock? (Question of law/mixed law and fact, turning on the interpretation of stock valuation principles under the Income Tax Act). Contentions: Assessee: The judgment does not record any specific contentions made by the assessee before the High Court. Revenue: The appellant-revenue submitted that in view of 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, it 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.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

ITA No. 508 of 2005 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 508 of 2005 (O&M) Date of Decision: 29.03.2016 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. 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 17.12.2004 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (A), in ITA Nos. 555/Chandi/2000 and 574/Chandi/2000, for the assessment year 1996-97, raising the following substantial question of law: Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was justified in law in allowing relief to the Respondent Company by deleting the addition of ` 8,55,033/- made on account of under valuation of stock ignoring that the value of closing stock of consumable stores and tools was not accounted for in the closing stock? REEMA SAINI 2016.04.04 13:52 I attest to the accuracy and authenticity of this document High Court, Chandigarh

ITA No. 508 of 2005 (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) 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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