C.I.T.LUDHIANA vs. M/S BAHADUR CHAND INVESTMENT P LTD.

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ITR/93/1996HC Punjab & HaryanaPHHC01035070199629 May 2008Bench: MR JUSTICE RAKESH KUMAR GARG,MR. JUSTICE RAJIVE BHALLA2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court answered the question of law referred by the Tribunal against the revenue and in favour of the assessee. The revenue's counsel fairly conceded that the issue had been decided against the revenue by this Court in a similar case (ITR No. 287 of 1995 decided on 21.5.2008). Therefore, the High Court held that the ITAT was right in its decision. The ratio decidendi is that if a similar question of law on similar facts has already been decided against the revenue by the High Court, then the reference on the same issue will be decided accordingly. The operative direction was to dispose of the reference application in light of this finding.

What were the facts?

The Commissioner of Income-tax (Central), Ludhiana, the revenue, filed an application before the Income-Tax Appellate Tribunal (ITAT) for referring a question of law to the High Court. The ITAT, vide its order dated January 22, 1996, in RA No. 247/Chandi/1995, arising out of ITA No. 542/Chandi/1990 for assessment year 1986-87, referred a question of law to the High Court. The dispute pertains to whether the assessee, M/s Bahadur Chand Investment (P) Ltd., Ludhiana, should be treated as an 'Industrial Company' and taxed at the lower rate applicable to such companies. The High Court of Punjab and Haryana at Chandigarh heard the reference.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Income-Tax Appellate Tribunal was right in law in holding that the assessee be treated as an “Industrial Company” and that the tax be charged at the low rate applicable to an Industrial Company? (Question of law, concerning the classification of the assessee and the applicable tax rate). Assessee's Contention: The judgment does not record any specific arguments made by the assessee before the High Court. However, the ITAT's earlier decision, which is the subject of the reference, must have favored the assessee's classification as an industrial company. Revenue's Contention: The revenue, through its counsel, conceded that a similar question of law on similar facts has already been answered by the High Court against the revenue in ITR No. 287 of 1995 decided on May 21, 2008.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No.93 of 1996 Date of decision:29.5.2008 The Commissioner of Income-tax, (Central) Ludhiana ......Applicant Versus M/s Bahadur Chand Investment (P) Ltd., Ludhiana ......Respondent CORAM:- HON'BLE MR.JUSTICE RAJIVE BHALLA HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Shri Krishan Mehta, Advocate for the applicant-revenue. Shri Akshay Bhan, Advocate for the respondent-assessee. * * * Rakesh Kumar Garg, J . On the application filed by the revenue, the Tribunal vide its order dated 22.1.1996 passed in RA No.247/Chandi/1995 arising out of ITA No.542/Chandi/1990 for the assessment year 1986-87 has referred the following question of law said to be arising out of the Tribunal's order dated 9.3.1995, to this Court for its opinion:- “Whether on the facts and in the circumstances of the case, the Income-Tax Appellate Tribunal was right in law in holding that the assessee be treated as an “Industrial Company” and that the tax be charged at low rate applicable to an Industrial Company?” Sh. Krishan Mehta, learned counsel for the revenue, has very fairly stated that similar question of law on similar facts has been answered by this Court against the revenue in ITR No.287 of 1995 decided on 21.5.2008.

ITR No.93 of 1996 -2- In view of the above, question of law as referred by the Tribunal is answered against the revenue and in favour of the assessee. The reference application is disposed of accordingly. (RAKESH KUMAR GARG) JUDGE May 29, 2008 (RAJIVE BHALLA) ps

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