D. V. SALGAOCAR (HUF) vs. ASST. COMMISSIONER OF INCOME TAX AND ANR.,

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TXA/2/2012HC BombayHCBM05003512201106 February 2012Author: U. V. BAKRE,S. C. DHARMADHIKARI2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no question of law, let alone a substantial one, arises for determination. The concurrent findings of fact by the Commissioner of Income Tax and the Income Tax Appellate Tribunal were found to be consistent with the material on record and not perverse. Specifically, the Court noted that the Captain of Ports' certificate, dated 10th May 2005, identified as the final certificate, along with a temporary certificate, stated the vessel was built on 8th April 2005. Considering the hire agreement period from 28th March 2005 to 27th March 2006, the twin conditions under Section 32 were not satisfied. The appeal was therefore dismissed as devoid of merit. The Court also expressed confidence that if penalty proceedings were initiated, the authorities would provide the appellant a full opportunity to present its case, considering the matter was pursued from the CIT level up to the High Court based on a bonafide plea supported by precedent.

What were the facts?

The assessee, D. V. Salgaocar (HUF), appealed against the concurrent orders of the Commissioner of Income Tax and the Income Tax Appellate Tribunal (ITAT). The dispute concerns the assessment year(s) not explicitly stated but implied to be related to a vessel's hire agreement. The core issue revolves around the date of the vessel's construction, evidenced by a certificate from the Captain of Ports dated 10th May 2005, which stated the vessel was built on 8th April 2005. This was considered the final certificate, alongside a temporary one. The hire agreement for the vessel ran from 28th March 2005 to 27th March 2006. The authorities below found that certain conditions under Section 32 of the Income Tax Act were not met.

What were the issues?

1. Whether the twin conditions contemplated by Section 32 of the Income Tax Act, 1961, are satisfied in this case, considering the date of the vessel's construction and the period of the hire agreement? (Question of mixed law and fact, turning on Section 32). Assessee's contention: The assessee argued that the legal position regarding the eligibility for benefits was settled by the Calcutta High Court's decision in Multican Builders Ltd. v. CIT, reported in 278 ITR 142, implying a bonafide belief in their claim. Revenue's contention: The revenue, through the Commissioner of Income Tax and the ITAT, found that the conditions under Section 32 were not satisfied. No specific arguments for the revenue are detailed in the judgment beyond their concurrent findings.

Which sections of the Income-tax Act were involved?

Section 32

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 2 OF 2012 D. V. SALGAOCAR (HUF) ... Appellant Versus ASST. COMMISSIONER OF INCOME TAX AND ANR., ... Respondents Mr. A. F. Diniz, Advocate for the appellant. Ms. Asha Dessai, Advocate for the respondents. Coram:- S. C. DHARMADHIKARI & U. V. BAKRE, JJ. Date:- 6th February, 2012 P.C.:- Heard Mr. Diniz appearing for the appellant and Ms. Dessai appearing for the respondents. Perused the concurrent orders of the Commissioner of Income Tax and the Income Tax Appellate Tribunal.

2.

In the facts and circumstances of this case, when it was concurrently found that the vessel was surveyed and the certificate issued by the Captain of Ports on 10th May, 2005, stated to be the final certificate and its temporary certificate, evidencing the date when the vessel was built as 8th April, 2005 then, bearing in mind the period of agreement for hire, namely 28th March, 2005 to 27th March, 2006, the twin conditions contemplated by Section 32 and noted by both, the Commissioner of Income Tax and the Income Tax Appellate Tribunal, are not satisfied in this case. The finding of fact, arrived at paras 14 and 15 are consistent with the material placed on record and cannot be termed as perverse. We are of the opinion that no question of law, much less a substantial one, arises for determination and consideration in this case. The appeal is, therefore, devoid of any merit and is dismissed.

3.

The apprehension is that the benefit could be claimed for the subsequent years, but for the year in question, on account of rejection of the request of the appellant, penalty proceedings may be initiated. We have no doubt in our mind that the authorities, if at all such proceedings are initiated, would give full opportunity to the appellant to place forward its version and explanation and consider equally the case that the matter was carried by the assessee-appellant from the Commissioner of Income Tax upto this Court on the bonafide plea that the legal position is settled by the decision of the Calcutta High Court in the case of Multican Builders Ltd. v. CIT, reported in 278 ITR 142. S. C. DHARMADHIKARI, J. U. V. BAKRE, J. ssm.

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