M/S NUCHAM PLASTICS LTD. ROHTAK vs. THE C.I.T. ROHTAK

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ITR/530/1995HC Punjab & HaryanaPHHC01032519199512 September 2006Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, in its order, noted that the revenue's counsel pointed out that the matter was covered in favor of the revenue by the Supreme Court's judgment in Commissioner of Income-tax v. British Bank of Middle East (2001) 251 ITR 217. Since no one appeared for the assessee, and considering the binding precedent of the Supreme Court, the High Court found no reason to interfere. The court did not explicitly address the assessee's contention regarding a mistake in the ITAT's order or the applicability of Rule 3(c) independently, but rather returned the reference unanswered, implying that the Supreme Court's decision rendered the assessee's arguments moot. The ratio decidendi is that a High Court, when faced with a reference on a question of law, must consider binding Supreme Court precedents. The operative direction was to return the reference unanswered.

What were the facts?

This case concerns Income Tax Reference No. 530 of 1995, decided by the High Court of Punjab and Haryana at Chandigarh on September 15, 2006. The reference arose from an order of the Income Tax Appellate Tribunal (ITAT) dated December 4, 1989, in I.T.A. No. 922 (CHD.)/1985, pertaining to assessment year 1982-83. The assessee is M/s Nuchem Plastics Ltd., Faridabad, and the respondent is the Commissioner of Income-tax, Rohtak. The ITAT had disallowed certain perquisites provided to the Managing Director of the assessee company, citing Section 40A(5) of the Income-tax Act, 1961, and following the Kerala High Court's decision in Forbes Eward & Figgis (P) Ltd. The revenue contended that the matter was covered by the Supreme Court's judgment in CIT v. British Bank of Middle East.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in refusing to accept that there was a mistake in its order and in not accepting that the perquisite value of a car should have been valued as per Rule 3(c) of the Income-tax Rules, 1961? Assessee's Contention: The assessee argued that there was a mistake in the Tribunal's order and that the perquisite value of the car should have been determined according to Rule 3(c) of the Income-tax Rules, 1961. (The judgment does not explicitly detail the assessee's arguments beyond this point, nor does it name any specific authorities or precedents relied upon by the assessee in the context of this reference.) Revenue's Contention: The revenue contended that the issue was covered in its favor by the Supreme Court's judgment in Commissioner of Income-tax v. British Bank of Middle East (2001) 251 ITR 217.

Which sections of the Income-tax Act were involved?

Section 40A(5)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.R. No.530 of 1995 Date of decision: September 15, 2006 M/s Nuchem. Plastics Ltd., Faridabad. -----Applicant Vs. Commissioner of Income-tax, Rohtak. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE RAJESH BINDAL Present: Mr. Yogesh Putney, Advocate for the revenue. -----

ORDER: Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal ‘A’ Bench, New Delhi, arising out of its order dated 4.12.1989 in I.T.A. No.922 (CHD.)/1985 in respect of assessment year 1982-83:- “Whether on the facts and in the circumstances of the case, the Tribunal was justified in refusing to accept that there was a mistake in its order and in not accepting that the perquisite value of car should have been valued as per Rule 3(c) of the Income-tax Rules, 1961?”

The Managing Director of the assessee Company was provided with certain perquisites. The Tribunal disallowed the same in view of the provisions of Section 40A(5) of the Income-tax Act, 1961

I.T.R. No.530 of 1995 following the judgment of Kerala High Court in Forbes Eward & Figgis (P) Ltd., (1992) 138 ITR 1 (Ker.). Learned counsel for the revenue points out that the matter is covered in favour of the revenue by the judgment of Hon’ble Supreme Court in Commissioner of Income-tax v. British Bank of Middle East (2001) 251 ITR 217. None appears for the assessee. The reference is returned unanswered.

( ADARSH KUMAR GOEL ) JUDGE September 15, 2006 ( RAJESH BINDAL ) ashwani JUDGE Pag e

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