CIT vs. SAMTEL COLOR LTD

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ITA - 549 / 2012HC Delhi07 September 20121 pages
For Petitioner: RASHMI CHOPRA
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises for consideration in the present appeal. This is because the Supreme Court, in the case of Ajanta Pharma Ltd. v. CIT (2010) 327 ITR 305 (SC), has settled the law. The Supreme Court preferred the view of the Madras High Court, which favored the assessee, and overruled the decision of the Bombay High Court, which had favored the Revenue. Therefore, the Tribunal's reliance on CIT v. Megna Electro Castings, which aligned with the eventual Supreme Court ruling, was correct. The appeal filed by the Revenue is accordingly dismissed.

What were the facts?

The Revenue is aggrieved by an order of the Income Tax Appellate Tribunal (Tribunal) which affirmed the decision of the CIT (Appeals). The CIT (Appeals) had set aside the Assessing Officer's order that made disallowances concerning adjusted book profits claimed by the assessee, Samtel Color Ltd., under Section 115JA read with Section 80HHC of the Income Tax Act, 1961. The Tribunal's decision was based on a ruling in CIT v. Megna Electro Castings, preferring it over a Bombay High Court decision that favored the Revenue. Subsequently, the Supreme Court settled the law in Ajanta Pharma Ltd. v. CIT, favoring the assessee's position and overruling the Bombay High Court's decision.

What were the issues?

1. Whether the Tribunal erred in affirming the CIT (Appeals)'s decision to set aside the Assessing Officer's disallowances on adjusted book profits claimed by the assessee under Section 115JA read with Section 80HHC of the Income Tax Act, 1961. Assessee's Contentions: The assessee, Samtel Color Ltd., claimed adjusted book profits under Section 115JA read with Section 80HHC. The Assessing Officer made disallowances. The CIT (Appeals) set aside these disallowances, and the Tribunal affirmed this. The assessee would have relied on the favorable High Court decisions that were later upheld by the Supreme Court. Revenue's Contentions: The Revenue was aggrieved by the Tribunal's order, which favored the assessee. The Revenue likely argued that the disallowances made by the Assessing Officer were correct and that the CIT (Appeals) and Tribunal erred in setting them aside. The Revenue would have likely relied on the Bombay High Court's decision which favored their position.

Which sections of the Income-tax Act were involved?

Section 115JA,Section 80HHC

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . . . . . ITA 549/2012 . . . . . CIT ..... Appellant . Through: Ms. Rashmi Chopra, Sr. Standing Counsel. . . . versus . . . . . SAMTEL COLOR LTD ..... Respondent . Through: Mr. Vaibhav Kulkarni, Advocate. . . . . . CORAM: . HON'BLE MR. JUSTICE S. RAVINDRA BHAT . HON'BLE MR. JUSTICE R.V.EASWAR . . . . . O R D E R . 07.09.2012 . . . The Revenue is aggrieved by an order of Income Tax Appellate Tribunal (?Tribunal?, for short) in Appeal No.4444/Del/2009 whereby it affirmed the decision of the CIT (Appeals). The CIT (Appeals) had set- aside the Assessing Officer?s order making several disallowances in respect of the adjusted book profits claimed by the assessee under Section 115JA of the Income Tax Act, 1961 read with Section 80HHC of the Act. The Tribunal had relied upon a ruling in CIT v. Megna Electro Castings, 184 Taxmann 79. The Tribunal apparently preferred that view over the decision of the Bombay High Court which had favoured the Revenue. The law since has been settled in Ajanta Pharma Ltd. v. CIT, (2010) 327 ITR 305 (SC); Supreme Court has preferred the Madras High Court view favouring the assessee and overruled the Bombay High Court decision. . In view of this development, no substantial question of law arises for consideration. The appeal is accordingly dismissed. . . . . . S. RAVINDRA BHAT, J . . . . . . . R.V.EASWAR, J . SEPTEMBER 07, 2012 . hs . . . . . $ 24 .

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