M/S.MALLIKARJUNA RICE INDUSTRIES vs. THE INCOME TAX OFFICER

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ITTA/82/2006HC TelanganaHBHC01028996200615 February 2023Bench: N.TUKARAMJI,UJJAL BHUYAN4 pages
AI SummaryAllowed

What did the High Court hold?

The High Court, following its decision rendered on the same day in ITTA No. 128 of 2006, allowed the appeal in favour of the assessee and against the revenue. The court did not provide a detailed reasoning for each specific issue within this judgment, but indicated that its decision was based on a prior ruling. The operative direction was to allow the appeal. No costs were awarded. The judgment does not explicitly state whether any issue was left undecided.

What were the facts?

The assessee, M/s. Mallikarjuna Rice Industries, filed an appeal before the High Court against an order of the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench. The ITAT's order, dated July 28, 2005, was in ITA No. 784/Hyd/2004 for Assessment Year 2000-01. This appeal was preferred against the order of the Commissioner of Income Tax (Appeals) V, dated July 29, 2004, which in turn was against the order of the Deputy Commissioner (Appeals) of Income Tax. The appeal to the High Court was admitted on March 14, 2006, under Section 260A of the Income Tax Act, 1961. The revenue is represented by the Income Tax Officer, Ward-2, Nalgonda.

What were the issues?

The High Court had to decide two substantial questions of law proposed by the appellant: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in sustaining the reopening of assessment under Section 148 of the Income Tax Act, 1961, particularly when the original assessment was completed under Section 143(3) of the Act? 2. Whether the amount of Rural Development Cess reimbursed by the Food Corporation of India, in accordance with the provisions of the AP Rural Development Cess Act, 1996, is a trade receipt and assessable as income, when the assessee did not debit the liability to pay cess to the P&L Account? The assessee argued that the reopening of assessment under Section 148 was not justified, especially after an original assessment under Section 143(3). The assessee also contended that the reimbursed Rural Development Cess was not a trade receipt and therefore not assessable as income, particularly as it was not debited to the Profit and Loss account. The judgment does not record specific arguments from the revenue.

Which sections of the Income-tax Act were involved?

Section 260A,Section 148,Section 143(3)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD WEDNESDAY ,THE FIFTEENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY THREE PRESENT THE HON'BLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HON'BLE SRI JUSTICE N.TUKARAMJI INCOME TAX TRIBUNAL APPEAL NO: 82 OF 2006 Appeal Under Section 260A of the lncome Tax Act, 1961 aggrieved by the order daled 28-07 -2005 of the lncome Tax Appellate Tribunal, Hyderabad Bench B Hyderabad in ITA No. 784 I Hydl 2004 ( Assessment Year 2000-01) preferred against the order of the Commissioner of lncome Tax ( Appeals ) Vl, 1zth Floor, Gagan Vihar , M.J. Road, Hyderabad dated 29-07-2004 in Appeal No. 0194^N-2, NLG / CIT (A) -Vl I 2003 -04 preferred against the order of the Deputy Commissioner ( Appeals ) of lncome Tax and Commissioner of lncome Tax (Appeals ) Vl, Hyderabad. Between: M/s. Mallikarjuna Rice lndustries, Choutuppal Mandal, Nalgonda ...APPELLANT AND The lncome Tax Officer, Ward-2, Nalgonda ...RESPONDENT Counsel for the Appellant: SRl. A. V. A. SIVA KARTIKEYA Counsel for the Respondent: SRI J V PRASAD (SC FOR INCOME TAX) The Court made the following: ORDER

.III HON'BLE THE CI]IEF'JUSTTEE UIJA BEIT,Y4N AND ,[HE HON'BLE SRI.JUSTICE N.TU-KABA]UII I.T.T.A.N .82 ot 2006 \ JTIDGMENT 1P,r tte Hon'bh rtte LttieJJtltLt,, r rjl.tl Btt,,itlt) I Iear< Mr. AV.A.Siva Kanikep, leamed r,)urLsel for the appellant; a r,l It,Ir. J.V.Prasad, leamed Smnding ,li,trnsel, Income Iax Depanr rent for the respondent. 2. l'his rppeal has been preferred by the :rrisessee as rhe ;rppellant un ler Section 260-.4. of the Income 'Iax .r\c::, 1961 (briefly 'the Acr' her :inafter) againsr the order dated 28.0)'.llCO:i passed by the Incomr Tax Appellate Tribunal, Hydcra raC Bench ,B, Ilderabad (briefly 'Tribunal' hereinafter) in I.T.A IrIo.784lHp /2004 for the assessmenr year 2CaO-2CO . 3. Thoug r the appeal was admitted on 14 .03.2006, no subsmntial q restion of law was framed. Howeve( [nrm the memo cf appeal, w {ind that appellant has proposed th,: ollcwing two questions as : LLtrstantial questions of law: a) \W trher on thc facts and in the circumstances ,rl- the case, lu. l ribr-rnal is right rr sr.staining th,. reop,.r rrg ci \

2 t}re assessment under Section 148 of the Income Tax Act, 1961 particula.ly when the onginal assessment was completed under Section 143(3) of the Act ? b) Vhether the amount of Rural Dcvelopment Cess reimbuned by the Food Corporation of India in accordance wifi the provisions of AP.Rural Development Gss Act, 1996 b a trade receipt and is assessable as income when the assessee did not debit the l.iabiliry to paycess to ihe PBrI Account ? 4. Following our decision rendered today in I.T.T'ANo.128 of 2006, we answer this appeal in favour of the assessee and against the revenue. Appeal is accordinglyallowed. No costs. fu a sequel, miscellaneous petitions, pending if aryr, stand closed. 5 Sd/- M. VIJAYA BHASKAR JOINT REGISTRAR //TRUE COPY// To, sEcTloN oFFlcER 1. The lncome Tax Appellate Tribunal, Hyderabad Bench B Hyderabad 2. The Commissioner of lncome Tax ( Appeals ) Vl, 12th Floor, Gagan Vihar M.J. Road, Hyderabad 3. The Deputy Commissioner ( Appeals ) of lncome Tax and Commissioner of lncome Tax (Appeals ) Vl, Hyderabad 4. One CC to SRl. A V A SIVA KARTIKEYA Advocate [OPUC] 5. One CC to SRl. J V PRASAD (SC FOR INCOME TAX) Advocate [OPUC] 6. Two'CD Copies lt J -)

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