THE COMMISSIONER OF INCOME TAX PATIALA vs. M/S PUNJAB TRACTORS LTD MOHALI

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ITR/600/1995HC Punjab & HaryanaPHHC01032607199521 March 2016Bench: MR. JUSTICE SURINDER GUPTA,MR. JUSTICE RAMESHWAR SINGH MALIK2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the reference as not pressed. The revenue, citing CBDT circulars regarding tax effect thresholds for filing references, indicated its intention not to pursue the matter due to the tax effect being below ₹20 lacs. The Court granted the revenue the liberty to file an application for revival of the reference if circumstances warranted it. It was clarified that the withdrawal of the reference by the revenue would not be construed as an affirmation of the ITAT's order on merits. The legal issue concerning the entitlement to weighted deduction under Section 35-B on sea freight and insurance charges was expressly left open to be adjudicated in an appropriate future case. No finding was reached on the substantive merits of the ITAT's decision.

What were the facts?

This case concerns Income Tax Reference No. 4 of 2003 (O&M) filed by the Commissioner of Income Tax, Patiala (the revenue) against M/s Roadmaster Industries of India Pvt. Ltd., Rajpura (the assessee) for the assessment year 1978-79. The reference arose from an appeal to the Income Tax Appellate Tribunal (ITAT) in ITA No. 67/Chandi/1986, which in turn stemmed from RA No. 148/Chandi/1994. The core dispute involved the assessee's entitlement to weighted deduction under Section 35-B of the Income Tax Act on expenses for sea freight and insurance charges, amounting to ₹12,65,266 and ₹1,46,109 respectively, incurred either within or outside India.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in holding that the assessee was entitled to weighted deduction under Section 35-B on expenses for sea freight of ₹12,65,266 and insurance charges of ₹1,46,109 incurred by the assessee whether in India or outside? Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The revenue, through its learned counsel, 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 the Central Board of Direct Taxes, it did not wish to press the present reference as the tax effect involved was less than ₹20 lacs. The revenue prayed for liberty to file an application for revival of the reference if something survived therein.

Which sections of the Income-tax Act were involved?

35-B

AI-generated summary — verify with the full judgment below

ITR No. 4 of 2003 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No. 4 of 2003 (O&M) Date of Decision: 21.04.2016 The Commissioner of Income Tax, Patiala .......Appellant Versus M/s Roadmaster Industries of India Pvt. Ltd. Rajpura ......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 No.148/Chandi/1994 arising out of I.T.A. No.67/Chandi/1986, for the assessment year 1978-79, raising the following substantial question of law: (i) Whether, on the facts and in the circumstances of the case, the I.T.A.T. was right in law in holding that the assessee was entitled to weighted deduction u/s 35-B on expenses on sea freight of `12,65,266/- and insurance charges of ` 1,46,109/- incurred by the assessee whether in India or outside? REEMA SAINI 2016.04.26 14:44 I attest to the accuracy and authenticity of this document High Court, Chandigarh

ITR No. 4 of 2003 (O&M) -2- 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 reference 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 reference in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the reference 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. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 21.04.2016 JUDGE reema REEMA SAINI 2016.04.26 14:44 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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