DIRECTOR OF INCOME TAX vs. HYUNDAI ENGINEERING CO. LTD.

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ITA/696/2009HC DelhiDLHC01091283200927 July 2016Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE NAJMI WAZIRI2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court had already declined to frame a question of law on the issue relating to the deletion of the addition of Rs. 3.58 crores on account of bogus head office expenses. The remaining issue was stated to be covered against the Revenue by the Court's decision in CIT v. M/s Dhingra Metal Works. Furthermore, the Revenue contended that the tax effect was below Rs. 20 lakhs, and therefore, in line with CBDT Circular No. 21/2015, the appeals should be treated as not pressed. The Court accepted this submission. The appeals were accordingly dismissed. No specific finding was given on the merits of the addition or the applicability of the Dhingra Metal Works decision, as the appeals were disposed of based on the tax effect and the circular.

What were the facts?

These are two appeals filed by the Director of Income Tax (Revenue) against Hyundai Engineering Co. Ltd. (Assessee) for assessment years not specified in the judgment. The appeals challenge an order or action by the Assessing Officer. One of the issues pertains to the deletion of an addition of Rs. 3.58 crores made by the Assessing Officer on account of alleged bogus head office expenses. The High Court had previously declined to frame a question of law on this issue. The remaining issue is stated to be covered by a previous decision of the High Court in CIT v. M/s Dhingra Metal Works. The Revenue also stated that the tax effect in these appeals is less than Rs. 20 lakhs, and in view of a CBDT Circular, the appeals should be treated as not pressed.

What were the issues?

1. Whether the High Court erred in declining to frame a question of law concerning the deletion of the addition of Rs. 3.58 crores made by the Assessing Officer on account of bogus head office expenses? (Question of law) 2. Whether the issue concerning the addition made by the Assessing Officer is covered by the decision of the High Court in CIT v. M/s Dhingra Metal Works? (Question of law) Assessee's Arguments: Not recorded in the judgment. Revenue's Arguments: The tax effect in these appeals is less than Rs. 20 lakhs. In view of CBDT Circular No. 21/2015 dated 10th December 2015, these appeals should be treated as not pressed.

AI-generated summary — verify with the full judgment below

$-24 & 25 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 696/2009 DIRECTOR OF INCOME TAX Appellant Through: Mr. P. Raychaudhuri, Sr. Standing Counsel. versus HYUNDAI ENGINEERING CO. LTD. Respondent Through: Mr Kamal Sawhney and Mr Shikhar Garg, Advocates. ITA 721/2009 DIRECTOR OF INCOME TAX Appellant Through: Mr. P. Raychaudhuri, Sr. Standing Counsel. versus HYUNDAI ENGINEERING CO. LTD. .....Respondent Through: Mr Kamal Sawhney and Mr Shikhar Garg, Advocates. CORAM: JUSTICE S.MURALIDHAR JUSTICE NAJMI WAZIRI ORDER % 27.07.2016 1. Of the two issues raised in these appeals, one relates to the deletion of the addition of Rs. 3.58 crores made by the Assessing Officer allegedly on account of the bogus expenses relating to the head office. The Court has already declined to frame a question of law on the said issue by its order dated 16 th November, 2010. Digitally Signed By:AMULYA Signature Not Verified

As far as the remaining issue is concerned, it is covered against the Appellant Revenue by the decision of this Court dated 41h October, 2010 in ITA No. 1111/2010 (Commissioner of Income Tax v. MIs Dhingra Metal Works.) Additionally, the learned counsel for the Appellant states that the tax effect in these appeals is less than Rs.20 lakhs. Therefore, in view of Circular No. 21/2015 dated 10th December 2015 issued by the Central Board of Direct Taxes, these appeals have to be treated as not pressed by the Revenue. The appeals are accordingly dismissed. S.MURALIDHAR, J NAIAZIRI, J JULY 27, 2016 kk

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