COMMISSIONER OF INCOME TAX vs. M/S UNITED PHARMA INTERNATIONAL LTD.

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ITA/300/2007HC Punjab & HaryanaPHHC01072992200718 September 2007Bench: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE M.M. KUMAR2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the matter was no longer res integra. It referred to a Division Bench decision of the same Court in the case of Commissioner of Income Tax v. M/s United Pharma Industries Ltd. (ITA No.20 of 2001 decided on 24.7.2007). In that case, similar questions of law were decided in favour of the assessee and against the revenue. Therefore, following the precedent, the present appeal filed by the Revenue was also dismissed. The ratio decidendi is that if a similar issue has been decided in favour of the assessee by a coordinate bench, the appeal against a similar order should also be dismissed. The operative direction was to dismiss the appeal.

What were the facts?

The Commissioner of Income Tax, Rohtak (Revenue) filed an appeal under Section 260A of the Income Tax Act, 1961, challenging an order dated 18.11.2005 passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'E'. The ITAT's order was in relation to ITA No. 802/Del/2000 concerning the assessment year 1994-95. The dispute involved the ITAT directing the Assessing Officer to grant depreciation amounting to Rs. 16,42,401/-. This depreciation was claimed on an increase in the cost of liability due to the capitalization of foreign exchange rate fluctuation amounting to Rs. 51,74,222/-.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in directing the Assessing Officer to grant depreciation at Rs.16,42,401/- for the increase in cost of liability due to capitalization of foreign exchange rate fluctuation at Rs. 51,74,222/-, when Section 43A of the Act was not applicable to the facts of the case? Assessee's contentions: The judgment does not record any specific contentions made by the assessee. However, the ITAT's decision in favor of the assessee implies that the assessee argued for the applicability of depreciation on foreign exchange fluctuation. Revenue's contentions: The Revenue contended that Section 43A of the Income Tax Act, 1961, was not applicable to the facts of the case, and therefore, depreciation should not have been granted on the capitalized foreign exchange fluctuation.

Which sections of the Income-tax Act were involved?

Section 260A,Section 43A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

ITA No.300 of 2007 Date of decision 18 . 9 .2007 The Commissioner of Income Tax, Rohtak .. Appellant Versus M/s United Pharma International Ltd. .. Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE AJAY KUMAR MITTAL PRESENT: Mr. Yogesh Potney, Advocate for Revenue M.M.Kumar, J. The revenue has filed the instant appeal under Section 260 A of the Income Tax Act, 1961 challenging order dated 18.11.2005 passed by the Income Tax Appellate Tribunal, Delhi Bench 'E' passed in ITA No. 802/Del/2000 in respect of the assessment year 1994-95. It has been claimed that the following question of law would arise for the determination of this Court: “ Whether on the facts and in the circumstances of the case Hon'ble ITAT was right in law in directing the Assessing Officer to grant depreciation at Rs.16,42,401/- for increase in cost of liability due to capitalisation of foreign exchange rate fluctuation at Rs. 51,74,222/- when section 43A of the Act was not applicable to the facts of the case ?” The matter is no longer res-integra. A Division Bench of this Court in the case of Commissioner of Income tax. v. M/s United Pharma Industries Ltd. (ITA No.20 of 2001 decided on 24.7.2007) has already decided similar questions of law in favour of the assessee and against the revenue.

Accordingly, the present appeal is also dismissed. (M.M.Kumar) Judge (Ajay Kumar Mittal) 18 .9.2007 Judge okg

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