G.K.KABRA vs. ASST COMM. OF INCOME TAX CIRCLE 3(1) HYD

ITTA/79/2002HC TelanganaHBHC01084177200228 August 2014Bench: CHALLA KODANDA RAM,L.NARASIMHA REDDY2 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court permitted the assessee to withdraw the appeals as requested. The court noted that the assessee had filed a miscellaneous petition before the Tribunal seeking rectification of the order due to alleged misstatement of facts. The Revenue did not object to this course of action. Consequently, the appeals were dismissed as withdrawn. The court explicitly left it open for the assessee to pursue the miscellaneous petition filed before the Tribunal for rectification. The assessee was also granted the liberty to pursue further remedies depending on the outcome of the rectification petition. No order as to costs was made. Any miscellaneous petitions filed in these appeals were also disposed of.

What were the facts?

The assessee, a dealer in LPG gas, claimed depreciation on cylinders purchased for his business. The Assessing Officer (AO) initially allowed the depreciation. However, the AO later revised his view, contending that the cylinders were not under the assessee's control and possession, and the security deposits received for them from a third party should be treated as sale consideration. An assessment order was passed based on this revised view. The assessee's appeals to the Commissioner (Appeals) and subsequently to the Income Tax Appellate Tribunal (ITAT) were unsuccessful, with the Tribunal upholding the AO's decision. The appeals before the High Court challenged the common order of the ITAT dated 04.06.2002 in ITA Nos. 169 and 170/Hyd/2000.

What were the issues?

1. Whether the cylinders are to be treated as assets for which depreciation can be claimed by the assessee, or if the security deposits received for them constitute sale consideration. (Mixed question of law and fact, concerning the interpretation of the nature of the transaction and the provisions related to depreciation and sale). Assessee's contention: The assessee argued that there was a misstatement of facts in the Tribunal's order and had filed a miscellaneous petition for rectification. The assessee sought permission to withdraw the appeals without prejudice to their right to pursue the rectification petition. Revenue's contention: The Revenue did not raise any objection to the assessee's request for withdrawal.

Which sections of the Income-tax Act were involved?

Section 260A

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.Nos. 79 and 86 of 2002

JUDGMENT: (per the Hon’ble Sri Justice L.Narasimha Reddy)

These two appeals are filed under Section 260A of the Income Tax Act, 1961 challenging the common order, dated 04.06.2002, in I.T.A.Nos.169 and 170/Hyd/2000 passed by the Hyderabad Bench ‘A’ of the Income Tax Appellate Tribunal. The appellant is a dealer in LPG Gas. As part of his activity, he has purchased quite large number of cylinders and claimed depreciation in respect of them. The Assessing Officer allowed depreciation for the concerned years. However, at a later point of time, the Assessing Officer took the view that the cylinders are not under the control and possession of the appellant and the amount said to have been received by him towards security deposit for the cylinders from a third party deserves to be treated as a consideration for sale. Accordingly, an order of assessment was passed. The appellant carried the matter to the Commissioner (Appeals) and not being successful there, to the Tribunal. The Tribunal also concurred with the view taken by the Assessing Officer. S r i S.Ravi, learned Senior Counsel for the appellant advanced extensive arguments and so is Sri S.R.Ashok, learned Senior Standing Counsel for the Department.

Halfway through, learned Senior Counsel for the appellant argued that there is some misstatement of facts in the order of the Tribunal and the appellant has already filed a miscellaneous petition seeking rectification of the same. He submits that the appellant may be permitted to withdraw the appeals without prejudice to his right to pursue the remedies. Learned Senior Standing Counsel for the Department did not raise any objection for this course. Hence, the appeals are dismissed as withdrawn, leaving it open to the appellant to pursue the miscellaneous petition filed by him before the Tribunal for rectification. It is needless to mention that the appellant shall be entitled to pursue the remedies depending upon the outcome of the miscellaneous petition. There shall be no order as to costs.

The miscellaneous petitions, if any, filed in these appeals shall also stand disposed of.

_____________________

L.NARASIMHA REDDY,J

________________________ CHALLA KODANDA RAM,J Dt:28.08.2014 kdl

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