C.I.T.JDR. vs. M/S KAKKAR COMPLEX STEELS P. LTD.
What did the High Court hold?
The High Court of Punjab and Haryana at Chandigarh dismissed the references as not pressed, at the behest of the revenue. The court granted the liberty sought by the revenue to file an application for revival of the references in case something survived therein. It was clarified that the withdrawal of the references by the revenue would not be considered an affirmation of the Tribunal's order on merits. The legal issue, as claimed by the revenue, was left open to be adjudicated in an appropriate case. Therefore, no finding was given on the substantial question of law raised, nor was any reasoning provided for a decision on the merits of the case.
What were the facts?
The Commissioner of Income Tax (Central), Ludhiana (the revenue) filed two references, ITR No. 169 of 1996 and ITR No. 170 of 1996, before the High Court of Punjab and Haryana at Chandigarh. These references arose from RA Nos. 95 and 96/Chandi/1995, which in turn stemmed from I.T.A. Nos. 70 and 93/Chandi/1990. The assessment year in question is 1986-87. The dispute concerns the allowability of interest claimed by the assessee, M/s Rockman Cycle Industries Private Limited, Ludhiana, at a higher rate on borrowings, despite the investment being made in shares of a sister-concern that yielded a fixed return. The references were filed by the revenue challenging an order of the Income Tax Appellate Tribunal.
What were the issues?
1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing interest claimed by the assessee at a higher rate on borrowings, though the investment had been made by the assessee in the shares of a sister-concern which gave a fixed return of income? (Question of law) The revenue's contention, as presented by its counsel, was that it did not wish to press the present references. This decision was based on Circular No. 21/2015 dated 10.12.2015 read with Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by the Central Board of Direct Taxes, as the tax effect involved was less than ₹20 lacs. The revenue prayed for liberty to file an application for revival of the references if something survived therein. The judgment does not record any specific arguments presented by the assessee.
AI-generated summary — verify with the full judgment below
ITR No. 169 of 1996 (O&M) and -1- ITR No.170 of 1996 (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No. 169 of 1996 (O&M) and ITR No.170 of 1996 (O&M) Date of Decision: 25.04.2016 The Commissioner of Income Tax (Central), Ludhiana .......Appellant Versus M/s Rockman Cycle Industries Private Limited, Ludhiana ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Zora Singh Klar, Advocate for the appellant. Mr. Alok Mittal, Advocate for the respondent. RAJESH BINDAL,J. This reference has been filed in RA Nos. 95 and 96/Chandi/1995 arising out of I.T.A. Nos. 70 and 93/Chandi/1990, for the assessment year 1986-87, raising the following substantial question of law: (i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing interest claimed by the assessee at a higher rate on the borrowings though the investment had been made by the assessee in the shares of a sister-concern which gave a fixed return of income? REEMA SAINI 2016.05.03 11:16 I attest to the accuracy and authenticity of this document High Court, Chandigarh
ITR No. 169 of 1996 (O&M) and -2- ITR No.170 of 1996 (O&M) Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, he does not wish to press the present references as the tax effect involved is less than ` 20 lacs. However, he prays that liberty be granted to the revenue to file an application for revival of the references in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the references by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. A copy of this order be placed on the file of connected case. (RAJESH BINDAL)
JUDGE (HARINDER SINGH SIDHU) 25.04.2016 JUDGE reema REEMA SAINI 2016.05.03 11:16 I attest to the accuracy and authenticity of this document High Court, Chandigarh
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