C.I.T. JDR. vs. M/S AMAR JYOTI SOAP
What did the High Court hold?
The High Court held that the Income-tax Appellate Tribunal was right in law in upholding the order of the Deputy Commissioner of Income-tax (Appeals). The reasoning was that the authorities had found that in the previous assessment year 1986-87, income earned by the assessee was treated as business income, and similar expenses were allowed as deductions. The Revenue had not shown any special reason to adopt a different view for the assessment year in question. The Court found no reason to differ with the Tribunal's view. The question of law was answered against the Revenue and in favour of the assessee. The operative direction was to answer the reference accordingly.
What were the facts?
The assessee, M/s Amar Jyoti Soap & Rice Mills Jalandhar, filed its return for assessment year 1988-89 declaring income at Rs. 28,824/-. The Assessing Officer disallowed expenses of Rs. 61,223/-, considering the business to be closed during the year. The Deputy Commissioner of Income-tax (Appeals) reversed this, noting that the assessee received Rs. 70,946.80 as milling charges from the District Food and Supplies Controller, Jalandhar, during the assessment year in question, indicating the business was continuing. The Income-tax Appellate Tribunal upheld the order of the Deputy Commissioner of Income-tax (Appeals) and dismissed the Revenue's appeal. The Commissioner of Income-tax-I, Jalandhar, referred a question of law to the High Court.
What were the issues?
1. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in upholding the order of the Deputy Commissioner of Income-tax (Appeals) allowing expenses of Rs. 61,223/- disallowed by the Assessing Officer? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: Not recorded in the judgment, other than the initial disallowance by the Assessing Officer on the premise that the business was closed.
AI-generated summary — verify with the full judgment below
I.T.R.No.83 of 1992 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.R. No.83 of 1992 Date of decision: September 07 , 2006
The Commissioner of Income Tax-I, Jalandhar Applicant Through: Dr.N.L.Sharda, Advocate v. M/s Amar Jyoti Soap & Rice Mills Jalandhar Respondent Through Mr.Akshay Bhan, Advocate
CORAM: Hon’ble Mr.Justice Adarsh Kumar Goel Hon’ble Mr. Justice Rajesh Bindal
Whether Reporters of local papers may be allowed to see the judgment ?
To be referred to the Reporters or not ?
Whether the judgment should be reported in the Digest? Rajesh Bindal, J. Following question of law has been referred for the opinion of this Court by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (for short, `the Tribunal') in I.T.A.No.1449(ASR)/1989, for the assessment year 1988-89: “Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in upholding the order of the Deputy Commissioner of Income-tax (Appeals) allowing expenses of Rs. 61,223/- disallowed by the Assessing Officer ?” The assessee filed return declaring his income at Rs. 28,824/- on 12.7.1988. The main line of business of the assessee was rice husking. The Assessing Officer disallowed the expenses considering that no business was carried out by the assessee during the year in question and the same was closed.
I.T.R.No.83 of 1992 [2] The Deputy Commissioner of Income-tax (Appeals) held that during the assessment year 1987-88, the assessee received a sum of Rs. 12,797/- from F.C.I. towards milling charges. It was also noticed that a sum of Rs. 70,946.80 was received as milling charges during the assessment year in question from District Food and Supplies Controller, Jalandhar, as such the business was continuing and accordingly, order passed by the Assessing Officer was reversed. The Tribunal upheld the order passed by the Deputy Commissioner of Income-tax (Appeals) and dismissed the appeal filed by the Revenue.
We have heard learned counsel for the parties and perused the record. On a consideration of the facts of the present case , as found by the authorities, it is evident that even upto the previous assessment year 1986-87, whatever income was earned by the assessee was being treated as business income and the expenses of the kind, which were sought to be disallowed during the year in question, were being allowed as deduction and the income was arrived at accordingly. No special reason has been shown by the Revenue to take a different view during the assessment year in question. We do not find any reason to differ with the view taken by the Tribunal and accordingly, answer the question against the Revenue and in favour of the assessee. ( Rajesh Bindal ) Judge (Adarsh Kumar Goel) Judge September 07 , 2006 mk
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