Punjab & Haryana High Court Judgments — 2016

The High Court, while re-examining the second question of law, found that the Tribunal erred in rejecting the assessee's claim for adjustment of abnormal operating expenses. The Tribunal had held that adjustments should be made to the net operating profit margin of comparable companies, not the assessee's. However, the High Court, referring to Rule 10B(1)(e)(ii) and (iii) of the Income Tax Rules, 1962, stated that the net profit margin of comparable companies is required to be adjusted to bring the international transaction and comparable costs to the same pedestal. The Court held that the Tribunal, after rightly observing that adjustments should be made to the comparable company's profit margin, erred in rejecting the assessee's case on the ground that the assessee failed to show that comparable companies' profits were affected by a strike. The Court opined that the profit margin of the comparable company should be adjusted to account for a strike-like situation that occurred in the assessee company. The Court's order dated August 26, 2016, was modified to the extent that the second question would be decided afresh, and the TPO would consider appropriate adjustments in the profit margin of the comparable company after taking into account a strike-like situation. Questions 1, 4, and 5 were to be decided afresh by the TPO.

The High Court held that the questions of law raised in ITA No. 62 of 2015 are answered in favour of the Revenue and against the Assessee, and the question of law raised in ITA No. 147 of 2016 is answered in favour of the assessee. The reasoning appears to be that the amendment to Section 2(15) by the Finance Act, 2008, particularly the proviso, significantly altered the definition of 'charitable purpose' for activities involving trade, commerce, or business, even if the income was not applied for profit. The judgment distinguishes the case of Jammu Development Authority, stating it was based on specific findings of fact that the assessee was not advancing objects of general public utility. The Court also clarified that the omission of Section 10(20A) did not affect the applicability of Sections 2(15), 11, 12, 12A, and 12AA. Therefore, for ITA No. 62 of 2015, the assessee's claim for exemption was likely denied due to the proviso to Section 2(15). For ITA No. 147 of 2016, the Improvement Trust, Moga, was found to be entitled to relief, likely because its activities did not fall foul of the proviso or it was otherwise eligible under the relevant provisions.

The High Court held that the annual value of properties that are owned by the assessee, are more than one in number, and admittedly remained vacant throughout the previous year, would not be assessed under Section 23(1)(c) but under Section 23(1)(a) of the Income Tax Act, 1961. Section 23(1)(b) and (c) apply only to properties that were actually let out and for which rent was actually received or receivable, dealing with the concept of real income, not notional income. Therefore, the annual value would be determined notionally, as done by the Assessing Officer and upheld by the Commissioner and the Tribunal. The question of law was answered in favour of the Revenue. The appeals were dismissed.

The High Court held that the result in these appeals follows the result in ITA No.147 of 2016, Commissioner of Income Tax vs. Improvement Trust Moga, which was disposed of by a separate order and judgment passed on the same day. For the reasons stated in that judgment, the appeals filed by the revenue were dismissed. The specific reasoning and ratio decidendi from the connected case are not provided in this excerpt. The operative direction is the dismissal of the revenue's appeals. No issues were expressly left undecided.

The High Court held that the orders of the CIT(A) and the Tribunal lacked adequate discussion on the factual aspects of the matter. Specifically, regarding the first issue, there was no discussion on whether the assessee indeed had sufficient interest-free funds of ₹713.14 lakhs. Furthermore, the judgment noted that it was not borne out from the orders how M/s GHE Automotive Pvt. Ltd. was a sister concern. For the second issue concerning capital work-in-progress, the orders provided no details about the assets, their alleged non-use, or the basis for such a finding. The lower authorities had relied solely on the judgment in Abhishek Industries Ltd. without considering other relevant judgments from the Supreme Court (e.g., S.A. Builders Ltd.) and other High Courts (e.g., Hero Cycles Pvt. Ltd.). Consequently, the High Court set aside the impugned order of the Tribunal and remanded the matter to the Tribunal for a fresh decision, with the liberty for the Tribunal to further remand it to the CIT(A).

The High Court held that the ITAT was justified in cancelling the CIT's order. The Court agreed with the ITAT's finding that there was no misutilization of funds by the assessee. Generating a surplus was not fatal to the grant of exemption under Section 80G, especially when such surplus was utilized for large-scale expansion of facilities used for charitable purposes. The Court noted that the hospital charges levied by the assessee were very nominal, further supporting its charitable character. The Court also observed that the table presented by the ITAT clearly depicted the utilization of surplus by the assessee for charitable purposes, and the Revenue had not presented any material to the contrary. The Court concurred with the Tribunal's findings that the hospital charges were extremely concessional, highlighting the charitable character of the assessee. Consequently, the appeal filed by the Revenue was dismissed.

The High Court disposed of the appeals in the same terms as ITA No.73 of 2016. The question of law framed in ITA No.73 of 2016 was answered in favour of the appellant/revenue, and consequently, against the assessee/respondent. The reasoning for this decision is not detailed in this judgment but is stated to be found in the judgment of ITA No.73 of 2016. The High Court acknowledged that the assessee's main submission, relating to whether Section 194C of the Act applies to its case, had not been decided. Therefore, the assessee was to be afforded an opportunity to have this main submission decided by the Tribunal. No specific operative directions like deletion or remand were explicitly stated, other than the necessity for the Tribunal to decide the main submission.

The High Court found it impossible to determine the issue in the appeals before it because the crucial Built Operate-Transfer agreement, central to ascertaining whether the assessee acted on its own behalf or as a nodal agency for the Government of Punjab, was not produced. The Court also noted that the matter might require consideration of surrounding circumstances if the contract terms were unclear. The Court mentioned that it had decided the alternate issue (concessionaire having paid taxes) against the assessee in a separate, connected appeal (ITA No.73 of 2016). However, it emphasized that both the primary and alternate issues needed to be decided by the Tribunal. Consequently, the impugned orders of the Tribunal were set aside and the matters were remanded to the Tribunal for a fresh decision in accordance with the law, considering both contentions.

The High Court allowed the appeals in favour of the Revenue and against the assessee. The Court decided the substantial question of law in favour of the Revenue, holding that the assessee's alternative contention regarding the non-applicability of interest under Section 206C(7) due to the concessionaire filing nil income or loss returns was incorrect. The Court reasoned that even if the demand for the principal amount under Section 206C(1C) could not be enforced because the deductee-assessee (concessionaire) had paid the tax or filed a nil return, this would not affect the liability to pay interest under Section 206C(7). The Court relied on the principle that interest liability under Section 201(1A) (analogous to Section 206C(7)) remains even if the principal tax demand is waived or not enforced, as indicated in the Hindustan Coca Cola case and CBDT Circular. The impugned orders of the Tribunal were set aside. However, the High Court permitted the assessee to raise its main contention before the Tribunal, i.e., whether it was liable to collect tax at source under Section 206C(1C) at all. This main contention was expressly left undecided by the Tribunal and by the High Court.

The High Court overruled the ITAT's decision. It held that the proviso to Section 201(1) of the Income Tax Act, 1961, which states that a person shall not be deemed to be an assessee in default in respect of 'such tax' if the payee has furnished a return, taken the sum into account, and paid the tax due, does not extend to exempt the deductor from paying interest under Section 201(1A). The Court reasoned that Section 201(1A) provides for interest liability separately from the principal tax, and the definition of 'tax' in Section 2(43) does not include interest. Therefore, the assessee remains liable to pay interest under Section 201(1A) even if the payee has filed a nil return or a return showing a loss. The High Court set aside the ITAT's order on this point and remanded the matter to the ITAT to decide the assessee's primary contention that Section 194C was not applicable to its case in the first instance.

The High Court held that the present appeal is covered by the judgment of a Division Bench of the same Court decided on 25.04.2016 in ITA No. 5 of 2016. The Court found that the questions of law in both appeals are the same. Consequently, the High Court dismissed the present appeal. The reasoning is based on the precedent set by the Division Bench's decision. The ratio decidendi is that if an appeal involves identical questions of law as a previously decided case by a coordinate bench, it should be decided in line with that precedent.

The High Court held that a valid notice under Section 148 is a prerequisite for the Assessing Officer (AO) to reopen an assessment. The Court found that the assessee had challenged the validity of the proceedings under Sections 147 and 148 from the beginning, and the assessment order itself referred to these challenges. The Court rejected the Revenue's argument that Explanation 2(c) and Explanation 3 to Section 147 allowed the AO to reopen assessments on issues not mentioned in the original notice, even if the notice was invalid. The Court clarified that these explanations define cases where income has escaped assessment but do not confer jurisdiction to reopen without a valid notice. Explanation 3, while allowing assessment of issues coming to notice during reassessment proceedings, still posits a valid notice as the basis for jurisdiction. Therefore, the Court held that the notice under Section 148 was illegal and issued without jurisdiction, rendering the reassessment proceedings invalid. The questions of law were answered against the appellant (Revenue).

The High Court noted that the revenue's counsel conceded that issues No. 2 and 3 were liable to be answered in favour of the assessee. This concession was based on CBDT Circular No. 37/2016, which incorporated the views of the Gujarat, Bombay, and Allahabad High Courts in specific cases (Keval Construction, Sunil Vishwambharnath Tiwari, and Surya Merchants Ltd., respectively). The Department had accepted the finality of these judgments. Consequently, the High Court answered questions No. 2 and 3 in favour of the assessee. As these issues were decided in favour of the assessee, the High Court deemed it unnecessary to decide the other questions (No. 1 and 4) raised by the assessee. The appeal was disposed of based on the concession regarding questions 2 and 3.

The High Court answered questions No. 1 and 2 in favour of the assessee, based on a statement made by the Revenue's counsel referring to CBDT Circular No. 37/2016 and a similar judgment. Consequently, question No. 3 also survived. The Court set aside the Tribunal's order regarding question No. 3 and reinstated the order of the CIT(A). The CIT(A)'s direction to the AO to allow deduction under Section 80IB on the addition of Rs. 9,87,990/- was upheld, subject to the AO verifying that these amounts represented sale proceeds of flats and were credited to the profit and loss account eligible for deduction under Section 80IB. The Court noted that whether the assessee is entitled to the Section 80IB benefit would depend on the AO's finding upon remand. Question No. 4 was not necessary to answer. The appeal was disposed of accordingly.

The High Court of Punjab and Haryana at Chandigarh held that the present appeal, ITA No. 275 of 2012, would follow the result of ITA No. 273 of 2012, which was disposed of by a separate order and judgment passed on the same day. Consequently, the appeal was disposed of in the same terms as ITA No. 273 of 2012. The specific findings or reasoning of the ITAT regarding the Assessment Year 2008-09 are not detailed in this judgment, as the High Court's decision is predicated on the outcome of a related appeal. No specific issues were decided on merits in this judgment; rather, the appeal was decided procedurally based on a prior decision.

The High Court held that the result in this appeal follows the result in ITA-242-2016, which was dismissed by a separate order and judgment passed on the same date. Consequently, for the reasons stated in ITA-242-2016, this appeal is also dismissed. The reasoning is based entirely on the precedent set by the decision in the connected appeal. The ratio decidendi is that if a prior, related appeal is dismissed, subsequent appeals with identical circumstances or dependency will also be dismissed. The operative direction is the dismissal of the appeal. No issues were expressly left undecided.

The High Court admitted the appeal on questions (ii) and (iv), which were linked, and noted question (iii) was linked to question (i). The core issue revolved around whether payments to sub-contractors were for 'work' under Section 194C or 'fees for technical services' under Section 194J. The Court examined a sample contract, noting the assessee had deducted TDS under Section 194C. The Assessing Officer had held the contracts involved technical services due to requirements like testing, trial operation, and commissioning, necessitating qualified engineers. However, the High Court found that the contract terms indicated the deployment of technical personnel was for ensuring the contractor supplied equipment as per specifications, not for supplying technical services to the customer. Therefore, the consideration paid was not for professional or technical services under Section 194J. The Court stated Section 194J is not a residuary clause and is independent of Section 194C. Since the Court found Section 194J was not applicable, it did not need to decide if the contracts fell under Section 194C, as the assessee accepted it fell under Section 194C and complied. Questions (ii) and (iv) were decided in favour of the respondent (assessee). Consequently, questions (i) and (iii) were not necessary to decide. The appeal was dismissed.

The High Court held that the result in this appeal follows the result in ITA-242-2016, titled 'Pr. Commissioner of Income Tax, TDS-II, Chandigarh Vs The Senior Manager (Finance), Bharat Heavy Electricals Ltd., Jhajjar', which was dismissed by a separate order and judgment passed on the same day. For the reasons stated in ITA-242-2016, this appeal is also dismissed. The specific reasoning from ITA-242-2016 is not provided in this judgment. The operative direction is the dismissal of the appeal. No issues were expressly left undecided.

The High Court held that the present appeal is covered by the judgment of a Division Bench of the same Court decided on 25.04.2016 in ITA No. 5 of 2016 titled as Principal Commissioner of Income Tax, Gurgaon Vs M/s Carrier Air Conditioning and Refrigeration Limited. The Court found that the questions of law in both appeals were the same. Consequently, the appeal was dismissed. The reasoning is based on the principle of precedent, where a subsequent case with identical legal questions is decided in line with the earlier ruling. No specific issue was left undecided; the entire appeal was disposed of based on the precedent.

The High Court held that the present appeal is covered by the judgment of a Division Bench of the same Court in ITA No. 5 of 2016, decided on 25.04.2016. The Court found that the questions of law in both appeals were identical. Consequently, based on the prior decision, the present appeal was dismissed. The reasoning is that judicial precedent dictates that similar matters, with identical questions of law, should be decided in the same manner. The ratio decidendi is that a High Court is bound by its own previous decisions on identical questions of law. No specific operative directions were given other than the dismissal of the appeal. No issues were expressly left undecided.

The High Court held that questions (i) and (vi) were general and did not require consideration. Question (vii) was a reservation for amendment. Questions (ii) and (iii) were decided against the appellant, as they were covered by a previous judgment of the same Court in ITA-17-2016. Regarding question (iv), concerning Section 43B disallowance and its impact on Section 80P(2)(a)(i) deduction, the Court found no substantial question of law. The CIT(A) had directed the Assessing Officer to restrict the disallowance of interest payable under Section 43B on a proportionate basis only in respect of income not eligible for deduction under Section 80P(2)(a)(i). The Tribunal noted that the taxable income was mainly from capital gains, and it was not possible to ascertain the money borrowed for acquiring capital assets. The Court found the order of remand in this regard could not be faulted. For question (v), the Court upheld the ITAT's decision that income from the sale of properties constructed by the appellant was business income, not long-term capital gain. The Court reasoned that the appellant's objects included building housing complexes and selling units, and all authorities found as a question of fact that expenses were claimed for these projects, leading to the conclusion that they constituted business assets. The appeal was dismissed as it did not raise a substantial question of law.

The High Court decided the appeal based on previous judgments. For question (ii), the Court held against the appellant, relying on its own prior judgment in ITA-17-2016. For question (iii), the Court also ruled against the appellant, citing its judgment in ITA-638-2009. Similarly, for question (vi), the Court found against the appellant, referencing its decision in ITA-158-2016. Regarding questions (iv) and (v), the Court noted that the appellant had not claimed deduction under Section 57, arguing instead that the interest income should be treated as business income. To meet the ends of justice, the Court permitted the appellant to raise this contention before the Tribunal for questions (iv) and (v). The appeal on these specific questions was remitted to the Tribunal for consideration, with the Tribunal having the discretion to decide the issue itself or remit it further. The appeal concerning other questions was dismissed.

The High Court held that the present appeal was covered by the judgment of a Division Bench of the same court decided on 25.04.2016 in ITA No. 5 of 2016, titled Principal Commissioner of Income Tax, Gurgaon Vs M/s Carrier Air Conditioning and Refrigeration Limited. The court noted that the questions of law in both appeals were the same. Consequently, the High Court dismissed the present appeal. The reasoning is based on the principle of judicial precedent, where a higher court's decision on identical issues binds lower courts or benches. The ratio decidendi is that if an appeal is covered by a prior judgment of a coordinate or larger bench of the same court on identical questions of law, the appeal should be dismissed following that precedent. No specific operative directions were issued other than the dismissal of the appeal.

The High Court declined to entertain the writ petition, holding that there was uncertainty regarding the applicability of Section 206C to cotton waste. The court stated that the issue was a mixed question of law and fact and that there was no warrant for entertaining a writ petition when the petitioners could avail the statutory remedy under the Income Tax Act itself. The court noted that the issue had not attained finality. The operative direction was to dismiss the writ petition with liberty to the petitioners to adopt appropriate proceedings under the Act, including seeking a refund. The court did not decide on the merits of whether cotton waste is scrap.

The High Court held that a substantial question of law did not arise in the appeal. Regarding the first ground for penalty (proportionate disallowance of interest), the Court noted the concurrent findings of the appellate authorities that there was no concealment of income particulars and the particulars furnished were not inaccurate. Therefore, no interference was warranted with the exercise of discretion in not levying the penalty. Regarding the second ground (MAT adjustment for deferred tax), the Court acknowledged that while the quantum appeal was decided against the assessee, both appellate authorities deleted the penalty. The Court observed that sub-clause (viii) of Section 115JB(1), which deals with the inclusion of deferred tax in book profit, was introduced in 2008 with retrospective effect from 01.04.2001. The Court found no warrant for interference with the exercise of discretion, as there was no suppression of material or deliberate misstatement, and the mere fact of an incorrect claim was held not to be sufficient for initiating penalty proceedings in the given facts and circumstances. The appeal was accordingly dismissed.

The High Court held that the present appeal is covered by the judgment of a Division Bench of the same Court decided on 25.04.2016 in ITA No. 5 of 2016, titled Principal Commissioner of Income Tax, Gurgaon Vs M/s Carrier Air Conditioning and Refrigeration Limited. The Court noted that the questions of law in both appeals are the same. Consequently, the High Court dismissed the present appeal. The reasoning is based on the principle of precedent, where a subsequent case with identical issues is decided in line with a prior binding decision. No specific issue was left undecided; the entire appeal was disposed of based on the prior judgment.

The High Court held that the appeal did not raise a substantial question of law and dismissed the appeal. The Court upheld the ITAT's exclusion of Vishal Information Technologies Limited, finding that its outsourcing level of approximately 44.81% and a low employee cost of 1.25% of operating revenue made it incomparable to the assessee, whose wages to sales ratio was 53%. The Court found this to be a clear finding of fact that was not erroneous or perverse. Regarding Nucleus Netsoft and GIS (India) Limited, the Court found that over 40% of its business was outsourced, as evidenced by data processing charges constituting over 40% of its total operating and other expenses. The Court referred to its own prior judgment in The Commissioner of Income Tax, Faridabad Vs M/s Mercer Consulting (India) Pvt. Ltd. Gurgaon, which held that the finances of a company outsourcing a major part of its business cannot be compared to one that does not. Therefore, the exclusion of both comparables was justified, and no substantial question of law arose.

The High Court of Punjab and Haryana at Chandigarh dismissed the appeal. The Court noted that the learned counsel for the appellant (revenue) stated that this appeal was similar to ITA No. 363 of 2016, which was disposed of by a separate order and judgment passed on the same day. For the reasons stated in the judgment for ITA No. 363 of 2016, this appeal was also dismissed. The specific reasons for the dismissal of ITA No. 363 of 2016 are not detailed in this judgment, but the principle applied is that similar appeals, based on identical facts and legal grounds, will follow the precedent set by a previously decided case.

The High Court held that the appeal did not raise a substantial question of law. The CIT (Appeals) had examined the cash balances in the assessee's account and concluded that the cash was received from agriculturists and utilized for the assessee's business. It was found that the depositors were agriculturists, had the means, the deposits were treated as genuine, and the amounts were accepted and explained. The CIT (Appeals) and the Tribunal accepted the reasons for the assessee accepting these amounts and found no malafides. Therefore, even without delving into the merits, the High Court found no reason to interfere with the discretion exercised in not levying the penalty, as the exercise of discretion was neither perverse nor arbitrary. The appeal was consequently dismissed.

The High Court dismissed the appeal as withdrawn with liberty to the revenue to file an application for revival of the appeal as prayed for. The Court clarified that the withdrawal of the appeal by the revenue would not be considered an affirmation of the ITAT's order on merits. Furthermore, the legal issue, as claimed by the revenue, was left open to be adjudicated in an appropriate case. The Court did not decide the substantive merits of the case.

The High Court dismissed the appeal as withdrawn, granting the revenue the liberty to file an application for revival of the appeal as prayed for. The Court clarified that the withdrawal of the appeal by the revenue would not be considered an affirmation of the Income Tax Appellate Tribunal's order on merits. Furthermore, the Court explicitly stated that the legal issue, as claimed by the revenue, was being left open to be adjudicated in an appropriate future case. No specific finding was made on the merits of the original dispute.

The High Court held that the decision of the Tribunal cancelling the penalty under Section 271(1)(c) was not perverse or absurd. The Tribunal had noted that the assessee relied on a legal opinion for its initial claim and found nothing clandestine or malafide in obtaining it. The Tribunal also found that the change in claim was voluntary and not solely due to a notice under Section 143(2). Crucially, the Court acknowledged that there was no financial implication for the assessee on account of the change in the basis of the claim. Given these circumstances, the Court concluded that no substantial question of law arose. The appeal was therefore dismissed. No issue was expressly left undecided.

The High Court held that both the CIT(Appeals) and the ITAT erred in their approach. The High Court found that the CIT(Appeals) wrongly observed that the applicability of Section 14A for determining book profits under Section 115JB was the issue, when the book profits were accepted. More importantly, the High Court noted that the CIT(Appeals) and the ITAT failed to compute the disallowance under Section 14A for the purpose of future assessment years, which is necessary under Section 115JAA for determining the credit available to the assessee. The Tribunal's observation that the issue was academic was also incorrect, as the disallowance under Section 14A can have an effect in future years due to the benefit under Section 115JAA. Consequently, the impugned order and judgment were set aside, and the matter was remanded to the Tribunal for determining all issues raised by the assessee, especially the issue of disallowance under Section 14A. All contentions of the parties, including the applicability of Rule 8D, were kept open. The High Court also noted that it would be open for the assessee to raise the contention before the Tribunal regarding whether the matter should be remanded to the CIT(Appeals) or decided by the Tribunal itself.

The High Court held that no substantial question of law arises in this case. The Court found that the refusal of the three authorities (Assessing Officer, CIT (Appeals), and ITAT) to accept the assessee's story was not perverse or absurd. The Court noted that the alleged purchasers were not produced, could not be traced, and there were doubts about their residency. The unusually high earnest money (50% of sale consideration) and the inability to account for its deposit in the bank account further weakened the assessee's claim. The lack of correspondence and a plausible reason for purchasers abandoning the agreements also contributed to the disbelief. The Court concluded that the authorities had taken a possible view, which does not warrant interference on the ground of raising a substantial question of law. The appeal was dismissed.

The High Court held that the questions of law are answered in favour of the appellant/assessee. The Court was bound by its previous judgments in ITA-261-2014 (CIT vs. Sh. Sandeep Jain and others) and ITA-425-2014 (CIT (Central), Ludhiana vs. M/s Cosmos Builders and Promoters Ltd.), which held that Explanation 2 to Section 132B of the Income Tax Act, 1961, is prospective in nature, effective from 01.06.2013. The Supreme Court had also dismissed the department's SLP against the Cosmos Builders and Promoters Ltd. judgment. Therefore, Explanation 2 would not be applicable to the assessee's case for assessment year 2008-2009. The Court explicitly stated it was bound by these judgments and did not consider the Revenue's argument that the judgment did not lay down the correct law. The order of the Tribunal was liable to be set aside and was accordingly set aside. No issue was expressly left undecided.

The High Court held that the ITAT's view regarding the addition of Rs. 10,75,832/- was not perverse. The assessee had surrendered Rs. 1,60,00,000/- for the first half of the year, and the subsequent profit and loss account showed a profit of Rs. 10.76 lacs, which the AO added to the surrendered amount. The Court found this to be a possible approach and not raising a substantial question of law. Regarding the unsecured loans (Question B) and interest thereon (Question C), the Court found the ITAT's appreciation of facts to be reasonable. The Tribunal had noted that many creditors failed to appear, their income was below the taxable limit, and they deposited funds immediately before lending to the assessee, indicating suspicious transactions. The Court found the ITAT's view to be neither perverse nor unsustainable. Consequently, Question D, asking if the order was perverse, was also answered against the assessee. The appeal was dismissed.

The High Court decided to address the appeal in two parts. Firstly, it examined whether the assessee could raise the contention of carrying on the business of banking, which the Revenue argued had been abandoned. The Court found that the assessee had indeed raised this contention before the CIT(A) for the assessment year 2003-04, and the CIT(A)'s order did not unequivocally state abandonment. The Court then proceeded to decide the substantial questions of law. Questions 3 and 4 were answered in favour of the Revenue, setting aside the Tribunal's order, as the Court found the interest on reserve funds and call deposits were not attributable to the business of banking, and disagreed with the Tribunal's interpretation in light of Totgar's case. For question 1, the Court held that employees are not 'members' as defined under the Punjab Cooperative Societies Act, 1961, thus denying deduction for interest on advances to employees. The appeal was disposed of by remanding the matter to the Tribunal to decide afresh whether the assessee is engaged in carrying on the business of banking, and if so, whether it is entitled to the benefit of Section 80P(2)(a)(i) or any other provision on that basis.

The High Court admitted the appeal only on Question (ii) and answered it in favour of the assessee. Regarding Question (ii), the Court held that the provision for revised pay scales was an accrued liability in praesenti, even though part was to be discharged in the future. Relying on the Supreme Court judgment in Bharat Earth Movers vs. CIT, it was held that if a business liability has definitely arisen in the accounting year, it should be allowed as a deduction, provided it can be estimated with reasonable certainty. The Court found that the liability in this case was estimated with more than reasonable certainty and was not contingent. Therefore, the deduction was allowable. Regarding Question (iii), the Court held that no substantial question of law arose as the assessee had consistently followed its accounting policy, which was disclosed and not challenged by the CIT (Appeals) for defects. The Tribunal's finding on facts was accepted. Question (iv) was answered in favour of the assessee, finding no perversity in the Tribunal's order. Questions (i) and (v) were not decided on merits as the appeal was dismissed based on the decision on Question (ii).

The High Court held that the result in all these appeals would be the same as the result in ITA-638-2009, which was decided by a separate order and judgment passed on the same date. Consequently, these appeals were disposed of in the same terms as ITA-638-2009. The judgment does not provide the specific findings or reasoning from ITA-638-2009, nor does it detail the operative directions or relief granted in these specific appeals. The principle that can be cited is that appeals can be disposed of based on the outcome of a related, previously decided appeal, especially when agreed upon by the parties.

The High Court held that the appeal did not raise any substantial question of law. The issues involved were purely questions of fact that had been decided concurrently by the Assessing Officer, the Commissioner of Income Tax (Appeals), and the Income Tax Appellate Tribunal. The Court found that the order appealed against took a probable view and was not perverse, thus warranting no interference. The Tribunal had found that the assessee failed to satisfactorily explain the cash deposits. At least two of the four alleged payees were untraceable. The statements of the other two were disbelieved. The alleged agreement to sell for the plot was rejected, and the genuineness of the transactions leading to the receipt of ₹23 lakhs was not proven. The Tribunal also noted that the entire advance money was not refunded immediately upon cancellation of the agreement, and it was unbelievable that the payees disappeared without seeking refunds. The addition of ₹50,000/- was upheld due to the lack of evidence. The Court found no reason to interfere with the concurrent findings of fact.

The High Court held that there was no ground to interfere with the discretion exercised by the ITAT in remanding the matter. The Tribunal rightly noted that the balance-sheet of 31.03.2005 was a relevant consideration and ought to be taken into account while deciding the assessee's explanation for the entry of ₹96 lacs. The Court found the revenue's apprehension regarding the directions to the Assessing Officer to be unfounded. The Tribunal had merely directed a fresh decision in light of additional evidence, and its observations were prima facie. The Assessing Officer was not restricted to considering only the judgment in CIT versus Ravi Kumar, 294 ITR 78, but was to decide the issue afresh in accordance with law, considering all relevant provisions and authorities. The appeal was dismissed.

The High Court allowed the appeal to be dismissed as withdrawn, granting the liberty as prayed for by the revenue. It was clarified that the withdrawal of the appeal by the revenue would not be considered an affirmation of the ITAT's order on merits. Furthermore, the legal issue, as claimed by the revenue, was left open to be adjudicated in an appropriate future case. The court did not decide the substantive merits of the appeal.

The High Court held that the issues raised in the present appeal are covered against the appellant by virtue of the Division Bench judgment dated 30.11.2015 in ITA-261-2008. Consequently, for the reasons stated in the said order and judgment, the present appeal was also disposed of in the same terms as the earlier judgment. The specific findings and reasoning of the Division Bench judgment dated 30.11.2015 are not detailed in the present judgment, but it is implied that the outcome of the present appeal would mirror that of the earlier one. No issue was expressly left undecided. The operative direction was to dispose of the appeal in the same terms as the prior judgment.

The High Court dismissed the appeal as withdrawn with liberty granted to the revenue to file an application for revival of the appeal as prayed for. The Court clarified that the withdrawal of the appeal by the revenue would not be considered an affirmation of the ITAT's order on merits. Furthermore, the legal issue, as claimed by the revenue, was left open to be adjudicated in an appropriate future case. No specific finding was given on the merits of the ITAT's order.

The High Court dismissed the appeal as withdrawn with liberty granted to the revenue to file an application for revival of the appeal as prayed for. The Court clarified that the withdrawal of the appeal by the revenue would not be considered an affirmation of the ITAT's order on merits. Furthermore, the legal issue, as claimed by the revenue, was left open to be adjudicated in an appropriate case. No specific findings on the merits of the case were made as the appeal was withdrawn.

The High Court dismissed the appeal as withdrawn. The court granted the revenue the liberty to file an application for revival of the appeal as prayed for. It was clarified that the withdrawal of the appeal by the revenue would not be considered an affirmation of the ITAT's order on its merits. Furthermore, the court explicitly stated that the legal issue, as claimed by the revenue, was left open to be adjudicated in an appropriate future case. No specific finding was made on the merits of the case.