CIT ASR. vs. M/S BHARAT INDUSTRIES DINA NAGAR

PDF · subscribers
ITR/528/1995HC Punjab & HaryanaPHHC01032516199522 September 2006Bench: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL1 pages
AI SummaryAllowed

What did the High Court hold?

The High Court answered the referred question of law against the Revenue and in favour of the assessee. The Court noted that a similar issue concerning the disallowance of commission on sales had been decided by this Court in the case of CIT Vs. M/S Knit Foulds (P) Ltd., Kapurthala, ITR No.588 of 1995, decided on 17.1.2005. In that precedent, the Court had ruled against the revenue and in favour of the assessee. Therefore, following its own earlier decision, the High Court held that the Tribunal was right in confirming the deletion of the disallowance made by the ITO. The ratio decidendi is that where a consistent view has been taken by the High Court on a particular issue, subsequent benches should follow that precedent. The operative direction is that the question of law is answered in favour of the assessee.

What were the facts?

The Commissioner of Income Tax, Amritsar (Revenue) has filed an Income Tax Reference (ITR) No. 528 of 1995 before the High Court of Punjab and Haryana at Chandigarh. The reference arises from an order dated 4.3.1993 passed by the Income Tax Appellate Tribunal, Amritsar Bench, in I.T.A.No.386(ASR)/1988. The assessment year in question is 1985-86. The dispute pertains to the deletion of a disallowance of Rs. 59,794/- made by the Income Tax Officer (ITO) under Section 37(3A) of the Income-tax Act, 1961, which was confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)].

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in confirming the order of the CIT(A) deleting the disallowance of Rs. 59,794/- made by the ITO under Section 37(3A) of the Income-tax Act, 1961? Assessee's Contention: The judgment does not record any specific arguments made by the assessee. However, the fact that the Tribunal confirmed the deletion of the disallowance implies the assessee's position was in favour of such deletion. Revenue's Contention: The learned counsel for the Revenue pointed out that the issue of disallowance of commission on sales has been previously adjudicated by this Court in the case of CIT Vs. M/S Knit Foulds (P) Ltd., Kapurthala, ITR No.588 of 1995 decided on 17.1.2005, wherein the same was answered against the revenue and in favour of the assessee.

Which sections of the Income-tax Act were involved?

Section 37(3A)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.R No.528 of 1995 Date of decision:22.11.2006 The Commissioner of Income Tax, Amritsar ...Petitioner Versus M/S Bharat Industries, Dina Nagar ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE RAJESH BINDAL Present: Dr.N.L.Sharda, Advocate for the revenue. **** JUDGMENT Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Amritsar Bench Amritsar arising out of its order dated 4.3.1993 passed in I.T.A.No.386(ASR)/1988, in respect of the assessment year 1985-86. “Whether on the facts and in the circumstance of the case, the Tribunal is right in law in confirming the order of the CIT(A) deleting the disallowance of Rs.59,794/- made by the ITO under Section 37(3A) of the Income- tax Act, 1961? Learned counsel for the Revenue points out that question of disallowance of commission on sales has been earlier gone into by this court in the case of CIT Vs. M/S Knit Foulds (P) Ltd., Kapurthala, ITR No.588 of 1995 decided on 17.1.2005 wherein the same has been answered against the revenue and in favour of the assessee. In view of the above, the question referred is answered against the Revenue and in favour of the assessee. (Adarsh Kumar Goel) Judge November 22,2006 (Rajesh Bindal) Pka Judge

More judgments on Section 37(3A)

All 29 judgments and leading authorities on Section 37(3A) →

Recent GST High Court judgments

Search GST case law →