M/S MAJESTIC AUTO LTD LUDHIANA vs. THE SUR-TAX OFFICER CCI LDH

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ITR/302/1995HC Punjab & HaryanaPHHC01032369199515 July 2009Bench: MR. JUSTICE ADARSH KUMAR GOEL,MRS JUSTICE DAYA CHAUDHARY2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court answered the question of law against the assessee and in favour of the revenue. The court noted that the counsel for the revenue stated that the matter was covered against the assessee by the Supreme Court's judgment in Sundaram Clayton Ltd. Vs. Commissioner of Income Tax (1996) 220 ITR 281. The learned counsel for the assessee was unable to dispute this position. Consequently, the High Court found no reason to differ from the revenue's submission and ruled that the ITAT was not right in its previous holding. The reference was disposed of accordingly, implying that the sum of Rs. 6,32,876/- should be included in the assessee's capital base for surtax purposes.

What were the facts?

The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, referred a question of law to the High Court of Punjab and Haryana concerning the assessment year 1983-84. The dispute involved whether a sum of Rs. 6,32,876, representing an increase in the assessee company's (M/s Majestic Auto Ltd.) share capital due to capitalization of reserves, should be included in its capital base under Rule III of the Second Schedule of the Surtax Act. The ITAT had previously held that this amount was not liable to be included. The High Court was asked to provide its opinion on the correctness of the ITAT's order dated February 25, 1993, in S.T.A. No. 2/Chandi/188.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 6,32,876/- representing an increase in the share capital of the assessee company as a result of capitalization of part of its reserves, was not liable to be included in its capital base under Rule III of the 2nd schedule of the surtax Act? Assessee's contention: The assessee's counsel was unable to dispute the position that the matter was covered against the assessee by a Supreme Court judgment. Revenue's contention: The revenue contended that the matter was covered against the assessee by the judgment of the Hon'ble Supreme Court in Sundaram Clayton Ltd. Vs. Commissioner of Income Tax (1996) 220 ITR 281.

Which sections of the Income-tax Act were involved?

Rule III of the 2nd schedule of the surtax Act

AI-generated summary — verify with the full judgment below

I.T.R. No. 302 of 1995 (1) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.R. No. 302 of 1995 DATE OF DECISION: 15.7.2009 M/s Majestic Auto Ltd., Ludhiana ..........Applicant Versus The Commissioner of Sur-tax, (Central) ..........Respondent Ludhiana CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:- Mr. Akshay Bhan, Advocate for the assessee. Mr. Krishan Mehta, Senior Standing Counsel for the Revenue. **** ADARSH KUMAR GOEL, J. (Oral) 1. Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh, has referred following question of law for opinion of this Court, arising out of its order dated 25.2.1993 in S.T.A. No. 2/Chandi/188 relating to assessment year 1983-84:- “Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs.6,32,876/- representing increase in the share capital of the assessee company as a result of capitalisation of part of its reserves, was not liable to be included in its capital base under Rule III of the 2nd schedule of the sur- tax Act?” 2. Counsel for the revenue states that the matter is covered

I.T.R. No. 302 of 1995 (2) against the assessee by the judgment of Hon'ble Supreme Court in Sundaram Clayton Ltd. Vs. Commissioner of Income Tax (1996) 220 ITR 281. 3. Learned counsel for the assessee is unable to dispute this position. 4. In view of the above, the question is answered against the assessee and in favour of the revenue. 5. Reference is disposed of accordingly. (ADARSH KUMAR GOEL) JUDGE July 15, 2009

(DAYA CHAUDHARY) pooja JUDGE Note:-Whether this case is to be referred to the Reporter .......Yes/No

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