M/S KISHAN CHAND OIL IND. vs. CIT PATIALA

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ITR/151/1998HC Punjab & HaryanaPHHC01037941199825 July 2019Bench: MR. JUSTICE AJAY TEWARI,MR. JUSTICE HARNARESH SINGH GILL2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the reference by stating that the questions of law are concluded in terms of its previous decision dated 24.7.2019 in ITR No. 224 of 1995. While the specific findings of the Tribunal on the two issues are not detailed in this excerpt, the High Court's decision implies that it found the Tribunal's view on these matters to be consistent with its prior ruling. The operative direction was to dispose of the reference in the same terms as the earlier decided case. The specific reasoning of the High Court for its decision in ITR No. 224 of 1995, which forms the basis for this disposal, is not provided here. Therefore, the ratio decidendi for this specific judgment is that the issues are settled by precedent. No issue was expressly left undecided.

What were the facts?

This case involves a reference to the High Court of Punjab and Haryana at Chandigarh concerning Income Tax Reference No. 151 of 1998. The appellant is Ms/ Kishan Chand and Co. Oil Industries Ltd., Ludhiana, and the respondent is the Commissioner of Income Tax (Central), Patiala. The reference arises from a decision of the Income Tax Appellate Tribunal (ITAT). The core of the dispute revolves around two specific disallowances made by the revenue authorities and upheld by the ITAT. The assessment years are not explicitly stated in the provided text. The procedural history indicates that the questions of law were referred to the High Court for its opinion.

What were the issues?

The High Court was asked to decide the following questions of law: 1. Whether the Tribunal was correct in upholding the addition of Rs. 4,08,633/- on account of a claim for freight and octroi, etc., from the State Trading Corporation of India, which was claimed on a mercantile basis, despite the assessee adopting a cash basis of accounting for this purpose. 2. Whether the Tribunal was correct in disallowing Rs. 1,24,991/- from the interest payments made to the bank, attributed to alleged interest-free advances made to sister concerns, especially when bank records showed no debit balances against the assessee after October 1984. Assessee's Contentions: The assessee argued that the change in accounting method to cash basis for the specific purpose of freight and octroi was permissible. Regarding the interest disallowance, the assessee contended that there were no debit balances in their bank accounts after October 1984, implying no interest-free advances were made. The assessee relied on the principle that if there are no debit balances, the disallowance is unjustified. Revenue's Contentions: The revenue's arguments are not explicitly detailed in the provided text, but their stance is implied by the disallowances made and upheld by the Tribunal.

AI-generated summary — verify with the full judgment below

ITR No. 151 of 1998 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No. 151 of 1998 Date of Decision: 25.7.2019 Ms/ Kishan Chand and Co. Oil Industries Ltd., Ludhiana .......Appellant Vs. Commissioner of Income Tax (Central), Patiala .......Respondent CORAM: HON’BLE MR. JUSTICE AJAY TEWARI HON'BLE MR. JUSTICE HARNARESH SINGH GILL Present: - Mr. Akshay Bhan, Senior Advocate with Mr. Alok Mittal, Advocate for the appellant. Mr. Rajesh Katoch, Senior Standing Counsel for the respondent. ***** AJAY TEWARI

, J. (ORAL)

In this reference, the following questions of law have been referred:- "1. Whether on the facts and in the circumstances of the case, the Tribunal is right in upholding the addition of Rs. 4,08,633/- on account of claim of freight and octroi etc. from the State Trading Corporation of India on mercantile basis as against the change in the method of accounting on cash basis adopted by the assessee for this purpose ? 2. Whether on the facts and in the circumstances of the case, the Tribunal is right in disallowing Rs. 1,24,991/- out of the payments of interest made to the bank for the alleged interest free advances made to the sister concerns especially when there were no debit balances against the assessee as per the bank records after October, 1984 ?" GURPREET SINGH 2019.07.29 14:27 I attest to the accuracy and authenticity of this document chandigarh

ITR No. 151 of 1998 -2- Both the learned counsel have agreed that these questions are concluded in terms of decision of this Court dated 24.7.2019 passed in ITR No. 224 of 1995. The reference is disposed of in the same terms. (AJAY TEWARI) JUDGE (HARNARESH SINGH GILL) July 25, 2019

JUDGE Gurpreet Whether speaking /reasoned : Yes Whether Reportable : No GURPREET SINGH 2019.07.29 14:27 I attest to the accuracy and authenticity of this document chandigarh

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