COMMISSIONER OF INCOME TAX (CENTRAL)-I, KOLKATA vs. MESSERS HOOGHLY MILLS COMPANY LIMITED

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ITA/189/2009HC CalcuttaWBCHCO003403200909 February 2023Bench: HON'BLE JUSTICE T. S. SIVAGNANAM,HON'BLE JUSTICE HIRANMAY BHATTACHARYYA2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal filed by the revenue under Section 260A of the Income Tax Act, 1961, on the ground of low tax effect. The Court noted that the tax effect in the instant case was well below the threshold limit of Rs. 1 crore, which is required for the revenue to pursue such an appeal before the High Court. Consequently, the substantial question of law raised by the revenue was left open and not decided on merits. No specific finding was given on the justification of the Tribunal's direction regarding the disallowance of gratuity.

What were the facts?

The appeal was filed by the revenue (Commissioner of Income Tax, Central-I, Kolkata) under Section 260A of the Income Tax Act, 1961, against an order dated March 6, 2009, passed by the Income Tax Appellate Tribunal, "A" Bench, Kolkata. The appeal pertained to the assessment year 2005-06 and concerned a disallowance on account of gratuity payable to employees amounting to Rs. 1,68,90,760. The assessee is M/s. Hooghly Mills Company Limited. The High Court heard arguments from both sides.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in directing the disallowance on account of gratuity payable to employees amounting to Rs. 1,68,90,760? (Question of law) Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The appeal was disposed of on grounds of low tax effect. Revenue's Contention: The revenue, represented by Mr. Soumen Bhattacharyya, argued the appeal. However, the judgment notes that the tax effect was well below the threshold limit for pursuing the appeal before the High Court, implying the revenue's primary argument was rendered moot by this procedural aspect.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

OD-6 ITA/189/2009 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (INCOME TAX) ORIGINAL SIDE COMMISSIONER OF INCOME TAX, CENTRAL-I, KOLKATA -Versus- M/S. HOOGHLY MILLS COMPANY LIMITED BEFORE : THE HON’BLE JUSTICE T.S. SIVAGNANAM And THE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA Date : 9th February, 2023 Appearance : Mr. Soumen Bhattacharyya, Adv. …for the appellant. Mr. Asim Chowdhury, Adv. Mr. Soham Sen, Adv. …for the respondent. The Court : This appeal filed by the revenue under Section 260A of the Income Tax Act, 1961 (the ‘Act’ for brevity) is directed against the order dated 6th March, 2009 passed by the Income Tax Appellate Tribunal, “A” Bench, Kolkata (the Tribunal) in ITA No.2139/Kol/2008 for the assessment year 2005-06. The revenue has raised the following substantial question of law for consideration:

2 (i) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was justified in directing the disallowance on account of gratuity payable to employees amounting to Rs.1,68,90,760/- ? We have heard Mr. Soumen Bhattacharyya, leaned standing counsel appearing for the appellant/revenue and Mr. Asim Chowdhury, learned Advocate assisted by Mr. Soham Sen, learned Advocate appearing for the respondent/assessee. As could be seen from the substantial question of law which has been raised, the tax effect in the instant case is well below the threshold limit of Rs.1 crore to enable the revenue to pursue this appeal before this Court. Therefore, the appeal (ITA/189/2009) stands disposed of on the ground of low tax effect and the substantial question of law is left open. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) A/s./K.Banerjee

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