The Commissioner of Income Tax -IV vs. M/s. A.P.State Road Transport Corporatin

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ITTA/116/2004HC TelanganaHBHC01052258200416 December 2014Bench: CHALLA KODANDA RAM,L.NARASIMHA REDDY3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court noted that the issue concerning whether the fabrication of buses constituted a works contract or a sale had been the subject of assessments for several years. The High Court had previously dealt with similar appeals for earlier assessment years in ITTA Nos. 30 and 50 of 2002. Through a detailed order dated July 24, 2014, the High Court had dismissed those appeals. Following its own precedent established in the earlier judgment, the High Court dismissed the present appeal. The operative direction was the dismissal of the appeal, with no order as to costs.

What were the facts?

The Revenue is aggrieved by an order of the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench, dated March 11, 2003, in ITA No. 8/Hyd/1999. This order pertained to assessment year 1998-99 and was filed by the Revenue challenging an order of the Commissioner (Appeals)-IV, Hyderabad. The core dispute was whether the respondent's activity of fabricating buses through various agencies constituted a 'work' or 'works contract' or a 'sale'. The ITAT had dismissed the Revenue's appeal by following its own prior decisions on the matter for earlier assessment years. The Assessing Authority had previously taken the view that it was a works contract.

What were the issues?

1. Whether the activity of fabrication of buses by the respondent, entrusted to various agencies, amounts to a 'work' or 'works contract' or a 'sale' under Section 194-C of the Income Tax Act, 1961. Assessee's contentions: The judgment does not record any specific contentions made by the respondent (assessee) before the High Court. However, the ITAT's decision, which was followed, implies the assessee's view that the activity was not a works contract attracting tax under Section 194-C. Revenue's contentions: The Revenue contended that the activity of fabrication of buses amounted to a works contract and was subject to tax. The judgment does not detail the specific arguments or authorities relied upon by the Revenue before the High Court, other than its general disagreement with the ITAT's finding.

Which sections of the Income-tax Act were involved?

Section 194-C

AI-generated summary — verify with the full judgment below

THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM I.T.T.A.No.116 of 2004

JUDGMENT: (Per LNR,J)

This appeal is preferred by the Revenue feeling aggrieved by the order, dated 11.03.2003 in I.T.A.No.8/Hyd/1999 passed by the Hyderabad Bench of the Income Tax Appellate Tribunal. The I.T.A. in turn was filed by the Revenue i.e., the appellant herein assailing an order passed by the Commissioner (Appeals)-IV, Hyderabad with reference to assessment year 1998-99. The controversy was as to whether the activity of fabrication of buses, entrusted by the respondent to various agencies amounts to work or works contract or sale. The relevant provision is Section 194-C of the Income Tax Act, 1961. The Tribunal dismissed the appeal by following its own order passed with reference to earlier assessment years.

Head learned counsel for the appellant and learned counsel for the respondent. The question, which is mentioned above was the subject matter of the assessments for several years. It was only in the year 1998, that the Assessing Authority visited the premises of the respondent and after verification of the records, took the view that the activity amounts to works contract and levied tax. The Tribunal however took a different view. I.T.T.A.Nos.30 and 50 of 2002 were filed before this Court with reference to certain assessment years. Through a detailed order, dated

24.07.2014, we dismissed the appeals. Following the same, we dismiss the present appeal also. The miscellaneous petition filed in this appeal shall also stand disposed of. There shall be no order as to costs.

____________________ L.NARASIMHA REDDY, J

______________________ CHALLA KODANDA RAM, J Date: 16.12.2014 JSU THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM

I.T.T.A.No.116 of 2004

Date: 16.12.2014 JSU

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