The Commissioner of Income Tax vs. M/s.Tibrewala Electronics,

ITTA/58/2004HC TelanganaHBHC01052068200403 December 2014Bench: CHALLA KODANDA RAM,L.NARASIMHA REDDY3 pages

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What did the High Court hold?

The Tribunal, in the present appeal, disposed of the matter by modifying the order under appeal. Both the Revenue and the assessee agreed to a settlement. The assessee is to bring the lease amount for the Beer Keggs leased to others for the entire lease period under the purview of income tax. If this amount has already been subjected to tax, the Assessing Officer is directed to pass necessary orders for its implementation. The Tribunal did not delve into the original dispute of lease versus sale in this specific appeal, but rather facilitated the implementation of the agreed-upon tax treatment of the lease income.

What were the facts?

The Revenue is aggrieved by an order dated 30.10.2000 passed by the Hyderabad Bench ‘A’ of the Income Tax Appellate Tribunal (ITAT). The proceedings originated from a search conducted on the respondent assessee and sister concerns on 20.11.1996. A contested issue in the block assessment was the transaction of Beer Keggs. The assessee claimed the Beer Keggs were leased to an agency in Rajasthan, while the Revenue considered it an outright sale. The ITAT, in a common order dated 30.10.2000, allowed the appeals filed by the assessee (IT(SS)A/287/H/97 and IT(SS)A/283/H/97). The Revenue filed an appeal (I.T.T.A.No.34 of 2003) against the common order concerning IT(SS)A/283/H/97. This appeal was disposed of on 27.08.2014 based on the assessee's agreement to bring the lease amount for the Beer Keggs for the entire 72-month period under tax purview.

What were the issues?

1. Whether the transaction involving Beer Keggs constituted a lease or an outright sale, and consequently, how the income arising therefrom should be treated for tax purposes. The Revenue contended that it was a case of outright sale, while the assessee argued it was a lease. The Tribunal had to decide the nature of the transaction and its tax implications. The present appeal, I.T.T.A.No.58 of 2004, arises from a subsequent order where both parties agreed to a specific course of action regarding the lease amount. The core issue, as framed by the Tribunal in its earlier common order, was the correct tax treatment of the Beer Keggs transaction. The present appeal focuses on the implementation of a mutually agreed-upon resolution.

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HON’BLE SRI JUSTICE L. NARASIMHA REDDY

AND

HON’BLE SRI JUSTICE CHALLA KODANDA RAM

I.T.T.A No.58 of 2004

JUDGMENT:- (Per Hon’ble Sri Justice L.Narasimha Reddy)

This appeal is preferred by the Revenue feeling aggrieved by the order, dated 30.10.2000, passed by the Hyderabad Bench ‘A’ of the Income Tax Appellate Tribunal in IT(SS)A/287/H/97.

The proceedings arose out of a search conducted in the premises of the respondent on 20.11.1996 as well as some other sister concerns. In the block assessment proceedings, one of the contested items was the transaction of purchase of Beer Keggs. While the respondent pleaded that the Beer Keggs purchased by it were given on lease to an agency in Rajasthan, the Revenue was of the view that it was a case of outright sale of the articles.

IT(SS)A/287/H/97 and IT (SS)A/283/H/97 were filed before the Tribunal feeling aggrieved by the order of assessment. The Tribunal passed a common order, dated 30.10.2000, allowing the appeals.

The Revenue filed I.T.T.A.No.34 of 2003 challenging the common order, dated 30.10.2000, in so far as it related to IT (SS)A/283/H/97. Through an order, dated 27.08.2014, we disposed of the appeal recording the statement made on behalf

of the respondent therein that it is agreeable to bring the lease amount for the Beer Keggs for the entire period of 72 months under the purview of the tax and if the said amount had been subjected to tax, the Assessing Officer shall pass necessary orders of implementation in this regard.

Learned Standing Counsel for the appellant and the learned counsel for the respondent agree for the same course of action.

Hence, we dispose of the appeal modifying the order under appeal to the effect that the respondent shall bring the lease amount for the Beer Keggs leased by it to others for the entire lease period under the purview of the income tax. If the said amount has been subjected to tax, the Assessing Officer, in turn, shall pass necessary orders of implementation in this regard. There shall be no order as to costs.

Miscellaneous petitions, if any, filed in this appeal shall also stand disposed of.

_______________________ L. NARASIMHA REDDY, J

________________________ CHALLA KODANDA RAM, J Date:03.12.2014

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