CIT vs. AMWAY INDIA ENTERPRISES

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ITA - 624 / 2011HC Delhi09 September 20113 pages
For Petitioner: PL BANSAL
AI SummaryRemanded

What did the High Court hold?

The High Court found that the Special Bench of the Tribunal should have referred the matter to a regular bench for decision on merits, rather than restoring it to the AO. The Court directed the Tribunal to place the appeal before a regular bench.

What were the facts?

The revenue appealed a Tribunal judgment concerning assessment years 2001-02 and 2002-03. The Tribunal's earlier judgment directed the Assessing Officer (AO) to decide the capital vs. revenue nature of computer software after hearing the assessee.

What were the issues?

Whether the CIT ought to have remanded the matter to the AO for decision on merits, and the proper procedure for the Tribunal after answering a reference.

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23 %09.09.2011

Present:

Mr Abhishek Maratha, Sr. Standing Counsel with Ms Anshul

Sharma, Advocate for the Appellant/Revenue.

Mr. M. S. Syali, Sr. Advocate with Mrs Mahua Kalra, Mr Mayank Negi, Ms Madhvi Swaroop, Mr H. Syali & Mr Rahul

Sateeja, Advocates for the respondent/ Assessee.

+ <u>ITA No. 624/20</u>11

Admit.

In the facts and circumstances of the case following question of law arises for our consideration:

"Whether the CIT ought to have remanded the matter to be decided on merits by the Assessing Officer?"

This appeal pertains to two assessment years, i.e., assessment year 2001-02 and 2002-03. The judgment of the Tribunal, which is impugned by the revenue, is a common judgment dated 15.02.2008 for both assessment years. This is a judgment of the Tribunal comprising of the President and two Members.

We are informed by Mr Syali that till date in this matter no further orders have been passed by the A.O. even though there were directions issued by the special bench to pass assessment orders in line with the directions issued in the impugned judgment of the Tribunal.

After having heard the learned counsel for the revenue, as well as Mr Syali, learned counsel for the assessee, we find that the Tribunal has laid down principles which ought to be adhered to by the AOs in Page 1 of 3

computer software is capital or revenue in the light of the criteria laid down above after giving an opportunity of being heard to the assessees....."

Upon consideration of the matter we are of the view that the special bench of the Tribunal ought to have placed the matter(s) before a regular bench, i.e., the Division Bench for dealing with the matter(s) in accordance with the law, after they had answered the reference. There was, in our view, no occasion to restore the matter to the file of the A.O.

Mr Syali, who appears for the assessee, is satisfied if a direction is issued by us whereby the operative part of the judgment of the Tribunal (i.e., para 60) is substituted by our direction to the Tribunal to place the captioned appeal before a regular bench of the Tribunal.

We direct accordingly. The appeal is disposed of with the aforesaid directions.

SANJAY KISHAN KAUL, J.

RAJIV SHAKDHER, J.

SEPTEMBER 09, 2011 kk

ITA No. 624/2011

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