CIT LUDHIANA vs. M/S RAJA SYNTHETIC P.LTD.

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ITR/146/1998HC Punjab & HaryanaPHHC01037935199828 October 2006Bench: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL1 pages
AI SummaryDismissed

What did the High Court hold?

The High Court, in its judgment dated 28.10.2006, answered the referred question of law against the revenue and in favour of the assessee. This decision was rendered in view of the Court's judgment in a similar case, I.T.R. No. 100 of 1999, Commissioner of Income Tax, Ludhiana v. M/s Sona Woollen Mills (P) Limited, Ludhiana. The specific reasoning for this outcome is not detailed in the provided text, but it implies that the Court found the Tribunal's confirmation of the CIT(A)'s order, which allowed depreciation based on the departmental publication, to be legally sound. The operative direction is that the question is answered in favour of the assessee, implying the revenue's appeal or reference was dismissed on this point.

What were the facts?

This case involves a reference to the High Court of Punjab and Haryana at Chandigarh concerning Income Tax Reference (ITR) No. 146 of 1998. The applicant is the Commissioner of Income-tax, Ludhiana, and the respondent is M/s Raja Synthetics (P) Ltd., Ludhiana. The assessment year in question is 1990-91. The matter arises from an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, in ITA No. 1496 & CO No. 149/Chd/93. The core of the dispute revolves around the allowance of depreciation for computing income under Section 115J of the Income Tax Act.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in confirming the order of the CIT(A) allowing depreciation as per Income-Tax Rules to the assessee for computing the quantum of Income u/s 115 J primarily on the ground that the same was based on the views expressed by the then Chairman of the CBDT in a departmental publication? The revenue's contention, as implied by the question referred, is that the Tribunal erred in allowing depreciation under Section 115J based on a departmental publication. The assessee's position, conversely, is that the CIT(A) and the Tribunal were correct in allowing depreciation, likely arguing that the departmental publication represented a valid interpretation or guidance for computing income under Section 115J.

Which sections of the Income-tax Act were involved?

Section 115J

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.R. No.146 of 1998 Date of decision: 28.10.2006 The Commissioner of Income-tax, Ludhiana. -----Applicant Vs. M/s Raja Synthetics (P) Ltd., Ludhiana. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE RAJESH BINDAL Present: Mr. S.K. Garg Narwana, Advocate for the revenue. ----- ORDER: Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh, arising out of its order passed in I.T.A. No.1496 & CO No.149/Chd/93 in respect of assessment year 1990-91:- “Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in confirming the order of the CIT(A) allowing depreciation as per Income-Tax Rules to the assessee for computing the quantum of Income u/s 115 J primarily on the ground that the same was based on the views expressed by the then Chairman of the CBDT in a departmental publication?”

In view of our judgment rendered today in I.T.R. No.100 of 1999 The Commissioner of Income Tax, Ludhiana v. M/s Sona Woollen Mills (P) Limited, Ludhiana, the question referred is answered against the revenue and in favour of the assessee. ( ADARSH KUMAR GOEL ) JUDGE October 28, 2006 ( RAJESH BINDAL ) ashwani JUDGE

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