ACIT V. EMTICI ENGG. LTD.

TAXAP/255/2000

AI Insights

The case revolves around a Tax Appeal under section 260A of the Income-tax Act, 1961, filed by the Assistant Commissioner of Income Tax (ACIT) against EMTICI Engineering Ltd. The appeal challenged the decision of the Income Tax Appellate Tribunal, which had dismissed the earlier appeals concerning the notional interest attributable to investment in shares. The Tribunal's decision was based on the relief granted to the assessee in earlier years, which was upheld by the CIT(A). The Revenue's appeal to the High Court was dismissed, affirming the Tribunal's reliance on previous rulings.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 720484 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 17-11-2014
• Assessment Year: misc
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: R K PATEL
• Assessee Lawyers: K M PARIKH
• Keywords: Appellate Tribunal; Capital nature; Income Tax; Investment in shares; Notional interest; Revenue expenditure; Tax appeal
• Section: 143(3); 260A; 256(2)

Judgement Text

"O/TAXAP/255/2000 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 255 of 2000 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ ACIT....Appellant(s) Versus EMTICI ENGG. LTD.....Opponent(s) ================================================================ Appearance: MR KM PARIKH, ADVOCATE for the Appellant(s) No. 1 MR RK PATEL, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Page 1 of 4 O/TAXAP/255/2000 JUDGMENT Date : 17/11/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. This Tax Appeal u/s.260A of the Income­tax Act, 1961 is filed against the judgment and order dated 17.11.1999 passed by the Income Tax Appellate Tribunal in ITA No.1129/Ahd/1994 whereby, the appeal was dismissed. 2. Briefly stated, the facts are that the assessee­firm filed its return of income on 31.12.1990 declaring income at Rs.50,26,263/­. The return of income was processed by the Assessing Officer and an order u/s.143(3) of the Act dated 29.03.1993 came to be passed against the assessee. Against the said order, appeal was filed before the CIT(A). The said appeal was partly allowed vide order dated 12.01.1994. Being aggrieved by the same, appeals were preferred before the Income Tax Appellate Tribunal. The Appellate Tribunal, vide judgment and order dated 17.11.1999, dismissed both the appeals. Hence, this Tax Appeal at the instance of the Revenue. 3. We have heard learned counsel for both the sides and have perused the record of the case. 4. In para­15 of the judgment, the Appellate Tribunal observed as under; “15. ITA No.1129/Ahd/94 : The first ground of appeal is Page 2 of 4 O/TAXAP/255/2000 JUDGMENT regarding notional interest attributable to investment in shares. The A.O decided the issue against the assessee following earlier years’ or in similar circumstances. The first appellate authority, following earlier years’ orders, allowed relief to the assessee.” 5. It is evident from the order of the Appellate Tribunal that the CIT(A) decided the issue in favour of the assessee by relying upon the orders passed in the earlier years, which was concurred by the Appellate Tribunal. 6. It is required to be noted that for the A.Y. 1984­85, the Revenue in the case of the same assessee had filed Reference Application u/s.256(2) before the Appellate Tribunal seeking reference on the following question of law; “Whether, the Appellate Tribunal is right in law and on facts in holding that the amount of Rs.4.50 Lacs contributed by the assessee to the Gujarat Cricket Association cannot be treated as of capital nature and directing the Assessing Officer to allow the same as revenue expenditure?” 7. However, the Appellate Tribunal rejected the aforesaid Reference Application, vide order dated 11.09.1998. It is pertinent to note that the issue, which is subject matter of present appeal, was never carried in appeal before this Court. The Appellate Tribunal followed the same decision in this matter also. Page 3 of 4 O/TAXAP/255/2000 JUDGMENT 8. Considering the aforesaid factual aspects, the Appellate Tribunal was justified in granting benefit of the earlier years’ orders to the assessee, which are final. In view of the same, we find no illegality with the judgment rendered by the Appellate Tribunal and accordingly, concur with the view taken by the Appellant Tribunal. The appeal, therefore, stands dismissed. (K.S.JHAVERI, J.) (K.J.THAKER, J) Pravin/* Page 4 of 4 "