C I T vs. M/S NAHAR SUGAR AND ALLIED IND. LTD.

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ITA/117/2008HC Punjab & HaryanaPHHC01080080200803 February 2016Bench: MR. JUSTICE RAMESHWAR SINGH MALIK,MR. JUSTICE SURINDER GUPTA1 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as withdrawn, with liberty granted to the revenue to file an application for revival of the appeal as prayed for.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 construed as an affirmation of the Tribunal's order on merits. Furthermore, the legal issue claimed by the revenue was explicitly left open to be adjudicated in an appropriate case. The judgment does not record any decision on the merits of the disallowances themselves, as the appeal was disposed of based on the revenue's submission regarding the monetary limit and its request to withdraw.

What were the facts?

The appeal was filed by the Commissioner of Income Tax-III, Ludhiana (appellant-revenue) against M/s Nahar Sugar & Allied Inds. Ltd. (respondent-assessee). The appeal challenged the deletion of two disallowances made by the Assessing Officer: Rs. 27,65,600/- on account of interest paid to a bank for non-business transactions, and Rs. 1,00,000/- related to expenditure under a lease agreement for a boiler. The total disputed amount was Rs. 28,65,600/-. The revenue submitted that the tax effect was less than Rs. 20 lacs.

What were the issues?

1. Whether the deletion of disallowance of Rs. 27,65,600/- on account of interest paid to the bank for non-business transactions by the Tribunal was justified? 2. Whether the deletion of disallowance of Rs. 1,00,000/- being expenditure related to the lease agreement of a boiler by the Tribunal was justified? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The revenue, through its counsel, referred to Circular No. 21/2015, dated 10.12.2015, issued by the CBDT, which prescribes a monetary limit of Rs. 20 lacs for filing appeals. Given that the tax effect in the present case was less than Rs. 20 lacs, the revenue prayed that the appeal be dismissed as withdrawn in accordance with the aforesaid circular. The revenue also 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

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

ITA No. 117 of 2008 Decided on : 03.02.2016 Commissioner of Income Tax-III, Ludhiana . . . Appellant Versus M/s Nahar Sugar & Allied Inds. Ltd. . . . Respondent CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL HON'BLE MRS. JUSTICE RAJ RAHUL GARG PRESENT: Mr. Rajesh Katoch, Advocate for the appellant-revenue. **** AJAY KUMAR MITTAL, J. (Oral) Learned counsel for the appellant-revenue referred to the contents of the appeal filed under Section 260A of the Income Tax Act, 1961 and pointed out that the deletion of disallowance of ` 27,65,600/- made on account of interest paid to the Bank making non-business transactions and another disallowance of ` 1,00,000/- being expenditure related to the lease agreement of boiler is under challenge in this appeal. According to him, the total amount comes to ` 28,65,600/-. In such a situation, the tax effect in the present case would be less than ` 20 lacs. It was fairly submitted that in view of the circular No.21/2015, dated 10.12.2015 issued by the C.B.D.T., New Delhi, where the monetary limit prescribed by the Board is `20 lacs, the present appeal may also be dismissed as withdrawn as per the aforesaid circular. However, he prayed that liberty be granted to the revenue to file an application for revival of the appeal in case something survives therein. 2. Dismissed as withdrawn with liberty as prayed for. It is, however, clarified that withdrawal of the appeal by the revenue shall not be taken to be affirmation of order of the Tribunal on merits. Further, the legal issue as claimed by the revenue is being left open to be adjudicated in an appropriate case. (AJAY KUMAR MITTAL) JUDGE (RAJ RAHUL GARG) February 03, 2016 JUDGE J.Ram

JAWALA RAM 2016.02.12 14:58 I attest to the accuracy and authenticity of this document Chandigarh

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