COMMISSIONER OF INCOME TAX -II V. OM BHOLE TRANSPORT AND CONSTRUCTION

TAXAP/309/2013

AI Insights

The case involves an appeal by the Commissioner of Income Tax against the decision of the ITAT, which had deleted certain additions made by the Assessing Officer regarding disallowances of expenditures under section 40(a)(ia) of the Income Tax Act. The Revenue challenged the ITAT's reliance on a decision by the Special Bench in Merilyn Shipping & Transporters, questioning the applicability of section 40(a)(ia) to expenditures that became payable during the previous year but were paid within the same year. The High Court, referencing its earlier decision in Commissioner of Income Tax Vs. Sikandarkhan N. Tunvar, remanded the matter back to the ITAT for a fresh consideration of the specified questions.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 702474 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 15-07-2013
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax Vs. Sikandarkhan N. Tunvar
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: TUSHAR HEMANI
• Assessee Lawyers: MANAV MEHTA
• Keywords: Disallowance of Expenditure; Income Tax; ITAT; Merilyn Shipping & Transporters; Sikandarkhan N. Tunvar
• Section: 40(a)(ia)

Judgement Text

"O/TAXAP/309/2013 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 309 of 2013 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH ­sd/­ and HONOURABLE MS JUSTICE SONIA GOKANI ­sd/­ ============================================= A Whether Reporters of Local Papers may be allowed to see the judgment ? YES 2. To be referred to the Reporter or not ? NO 3. Whether their Lordships wish to see the fair copy of the judgment ? NO 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 ? NO 5. Whether it is to be circulated to the civil judge ? NO ============================================= COMMISSIONER OF INCOME TAX ­II....Appellant(s) Versus OM BHOLE TRANSPORT AND CONSTRUCTION....Opponent(s) ============================================= Appearance: MR MANAV A MEHTA, ADVOCATE for the Appellant(s) No. 1 MR TUSHAR P HEMANI, ADVOCATE for the Opponent(s) No. 1 ============================================= CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MS JUSTICE SONIA GOKANI Date : 15/07/2013 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. Present Tax Appeal has been preferred by the Revenue challenging the impugned judgment and order passed by the Income Tax Appellate Tribunal, D Bench, Ahmedabad dated 21.9.2012. 2.0. At the outset, it is required to be noted that initially the Page 1 of 3 O/TAXAP/309/2013 JUDGMENT revenue proposed the following questions of law. “(A) Whether the facts and circumstances of the case and in law, the Hon’ble ITAT is justified in deleting the addition of Rs.22,18,322 and Rs.1,68,528 made by the Assessing Officer on account of disallowance of expenditure u/s 40(a)(ia) of the Act relying the decision of the Speicial Bench in the case of Merilyn Shipping & Transporters? (B) Whether section 40(a)(ia) of the Income Tax Act can be invoked only to disallow expenditure of the nature referred to therein, which is shown as ‘payable’ as on the date of the balance sheet or it can be invoked also to disallow such expenditure which became payable at any time during the relevant previous year and was actually paid within the previous year? (C) Whether the facts and circumstances of the case and in law, the Hon’ble ITAT is justified in deleting the addition of Rs.3,04,257/­ and Rs.62,320/­ made by the Assessing Officer on account of disallowance of Labour Charges Exp. And Repairs & Maintenance expenses? (D) Whether the facts and circumstances of the case and in law, the Hon’ble ITAT is justified in deleting the addition made on account of Disallowance out of Diesel & Oil Expenses of Rs.2,21,301/­ made by the AO?” 3.0. However, by order dated 8.4.2013 the Division Bench held the proposed question nos. C and D against the Revenue and issued notice for final disposal for considering only two questions i.e. question nos. A and B. Under the circumstances, this Court is required to consider the questions A and B only. 4.0 Shri Manav Mehta, learned counsel of the appellant­ revenue has vehemently submitted that so far as question nos. A and B is concerned, it is squarely covered by the decision of the Division Bench of this Court in the case of Commissioner of Income Tax Vs. Sikandarkhan Page 2 of 3 O/TAXAP/309/2013 JUDGMENT N. Tunvar in Tax Appeal No.905 of 2012 and other allied appeals and the Division Bench has remanded the matter to the Appellate Tribunal to consider the aforesaid two questions afresh. 5.0. Ms. Vaibhavi Parikh, learned advocate for the respondent assessee is not disputing the above. 6.0. Having heard Shri Mehta, learned counsel for the Revenue and Ms. Vaibhavi Parikh, learned counsel for the assessee and considering the decision of this Court in Tax Appeal No.905 of 2012 and other allied Tax Appeals and for the reasons stated in the said judgment and order, the impugned judgment and order passed by the ITAT dated 21.9.2012 is hereby quashed and set aside so far as aforesaid questions no. A and B is concerned and the matter is remanded to the ITAT to consider the aforesaid two questions afresh in accordance with law and on merits. Present appeal is allowed to the aforesaid extent. sd/­ (M.R.SHAH, J.) sd/­ (MS SONIA GOKANI, J.) Kaushik Page 3 of 3 "