THE COMMISSIONER OF INCOME TAX vs. M/S SUPRAJIT ENGINEERING LTD

PDF · subscribers
ITA/53/2008HC KarnatakaKAHC01027267200811 April 2014Bench: B.MANOHAR,DILIP B.BHOSALE4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court of Karnataka disposed of the appeal as not maintainable. The decision was based on Instruction No. 2/2005 dated October 24, 2005, issued by the Central Board of Direct Taxes, and Section 268A of the Income Tax Act. The respondent's counsel had pointed out that the tax effect in the present case did not exceed Rs. 4,00,000/-, which, according to the instruction, would ordinarily preclude the department from filing an appeal. The Revenue's counsel could not dispute this submission. Therefore, the court found the appeal to be not maintainable on procedural grounds, without delving into the merits of the substantial question of law regarding the deductibility of conversion charges under Section 80HHC.

What were the facts?

The Revenue, comprising the Commissioner of Income-Tax and the Assistant Commissioner of Income Tax, filed an appeal under Section 260-A of the Income Tax Act, 1961, challenging an order dated September 7, 2007, passed by the Income Tax Appellate Tribunal (ITAT), Bangalore Bench 'A'. The ITAT's order had dismissed the Revenue's appeal, thereby confirming the order of the First Appellate Authority. The First Appellate Authority had, in turn, confirmed the order passed by the Assistant Commissioner of Income Tax, Circle -12(2), Bangalore. The assessment year in question is 2002-03. The dispute pertains to the deductibility of conversion charges while computing deduction under Section 80HHC of the Act.

What were the issues?

1. Whether the Tribunal was justified in holding that 90% of conversion charges is not deductible while computing deduction under Section 80HHC of the Act? (Question of law) The Revenue contended that the Tribunal erred in its decision regarding the deductibility of conversion charges. The Respondent (assessee) argued that the appeal should not have been preferred by the department due to the low tax effect, citing Instruction No. 2/2005 dated October 24, 2005, issued by the Central Board of Direct Taxes, and Section 268A of the Income Tax Act. The Revenue's counsel did not dispute these submissions.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 80HHC,Section 268A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 11TH DAY OF APRIL 2014

PRESENT

THE HON'BLE MR.JUSTICE DILIP B.BHOSALE

AND

THE HON'BLE MR.JUSTICE B.MANOHAR

ITA NO.53/2008 BETWEEN:

1.

The Commissioner of Income-Tax, C R Building, Queens Road, Bangalore.

2.

The Assistant Commissioner of Income Tax Circle – 12 (2), C R Building, Queens Road, Bangalore.

…Appellants

(By Sri.G.Kamaladhar, Advocate)

AND:

M/s.Suprajit Engineering Ltd., No.100, Bommasandra Indl Area, Hosur Road, Bangalore.

…. Respondent

(By Sri.A.Shankar, Adv a/w Sri.M.Lava, Adv)

This ITA is filed under Sec.260-A of Income Tax Act 1961, arising out of Order dated 07-09-2007 passed in ITA No.408/Bng/2006, for the Assessment Year 2002-03, praying that this Hon'ble Court may be pleased to:

i. formulate the substantial questions of law stated therein,

ii. allow the appeal and set aside the order passed by the ITAT Bangalore in ITA No.408/Bng/2006 dated 07-09-2007 and confirm the order of the Appellate Commissioner confirming the order passed by the Assistant Commissioner of Income Tax, Circle -12(2), Bangalore, in the interest of justice and equity.

This appeal coming on for Admission this day, B.MANOHAR J., delivered the following:

J U D G M E N T

The Revenue has filed this appeal under Section 260A of the Income Tax Act, 1961 (for short ‘the Act’) challenging the order dated 7-9-2007 made in ITA No.408/Bang/2006 passed by the Income Tax Appellate Tribunal, Bangalore Bench ‘A’ (for short ‘the Tribunal’) dismissing the appeal filed by the Revenue confirming the order passed by the First Appellate Authority.

2.

The appeal was admitted for considering the following substantial question of law:

Whether the Tribunal was justified in holding that 90% of conversion charges is not deductable while computing deduction under Section 80HHC of the Act?

3.

Learned counsel for the respondent, at the outset, invited our attention to Instruction No.2/2005 dated 24-10-2005 issued by the Central Board of Direct Tax, and submitted that since the tax effect, in the present case, does not exceed Rs.4,00,000/-, the department ought not to have preferred the appeal. In support of his contention, he also invited our attention to Section 268A of the Income Tax Act.

4.

Having confronted with this, Mr.G.Kamaladar, learned Counsel for the Revenue could not and did not dispute the submissions advanced by the learned Counsel for the respondent.

5.

In view thereof and considering Instruction No.2/2005 dated 24-10-2005 read with Section 268A of the Act, we dispose of the appeal as not maintainable.

Sd/-

JUDGE

Sd/-

JUDGE

mpk/-*

More judgments on Section 260-A

All 2,570 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →