ELLORA TIMES PVT.LTD. V. DY.COMMR.OF INCOME TAX,RAJKOT

27780-2006

AI Insights

The case involves Ellora Times Pvt. Ltd., the appellant, contesting decisions made by the Deputy Commissioner of Income Tax, Rajkot, regarding deductions under section 80IA of the Income-tax Act, 1961. The appellant raised several substantial questions of law concerning the Tribunal's decisions on export incentives, rent income, profit on trading activities, and deemed dividend under section 2(22)(e). The High Court had previously refused to entertain the appeal, stating no substantial question of law arose. The Supreme Court, however, found merit in the appellant's arguments, except for one, and restored the matter to the High Court for a detailed examination of the substantial questions of law presented.

• Counselvise Citation: [2007] 140 COUNSELVISE.COM (IT) 468954 (SC)
• Appeal Type: Supreme court cases
• Pronouncement Date: 09-07-2007
• Other Referred Cases: Harkishan J. Patel at 168 ITR 472
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Others
• Court: SUPREME COURT
• Department Lawyers: MOHAN PARA SARAN; LAKSHMI IYENGAR; B V BALARAM DAS
• Assessee Lawyers: BHARGAVA DESAI; RAHUL GUPTA; REEMA SHARMA
• Keywords: Accumulated profits; Deemed dividend; Export incentive; Income Tax; Profit on Trading Activities; Rent income; Special Leave to Appeal
• Section: 2(22)(e); 80IA

Judgement Text

"\"$IT E M NO.5 1 COURT NO.3 SEC T I O N IIIA S UP R E M E C OUR T OF I N D I A R E C O R D OF P R OC E E D I N G S Petition(s) for Special Leave to Appeal (Civil) No(s).2 0 0 0 5 / 2 0 0 6 (From the judgement and order dated 03/ 0 7 / 2 0 0 6 in TA No. 12 6 5 / 2 0 0 5 of The HIGH COURT OF GUJ A R A T AT AHM E D A B A D ) E L L O R A TIM E S P V T . L T D . Petitioner(s) VER SUS DY.COM M R . O F INCOM E TAX, R A J K O T Respondent(s) (With prayer for interim relief and office report ) Date: 09/ 0 7 / 2 0 0 7 This Petition was called on for hearing today. CORAM : HON’B L E MR. JUS T IC E ASHO K BHA N HON’B L E MR. JUS T IC E V.S. SI R P U R K A R For Petitioner(s) Mr. Bh arg ava V. Desai,Adv. Mr. Rahul Gupta, Adv. Ms. Reema Shar m a , Adv. For Respondent(s) Mr. Mohan P ar a s a r a n , ASG Mrs. Lak sh m i Iyengar, Adv. Mr. B.V. Balar a m Das,Adv. UPON hearing counsel the Court made the following O R D E R Leave granted. Appeal stands disposed of. (J.S. R a w at) (Neeru Bala Vij) AR- cum- P S Court Master [Signed order is placed on the file] IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2923 OF 2007 (Arising out of SLP © No. 20005 of 2006) Ellora Times Pvt. Ltd. Appellant(s) Versus Dy. Commissioner of Income Tax, Rajkot Respondent(s) ORDER Leave granted. The assessee-appellant filed Tax Appeal No. 1265 of 2005 raising the following substantial questions of law said to be arising from the order of the Tribunal. (1)Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in restoring the issue of deduction under section 80IA in respect of export incentive to the file of the Assessing Officer contrary to the ratio laid down by this Hon’ble Court in the case of Harkishan J. Patel at 168 ITR 472? (2)Whether on the facts and circumstances of the case the Tribunal has substantially erred in denying deduction under section 80IA of the Act in respect of rent income, profit on trading activities and profit on sale of calculators without assigning any reasons and disregarding the solitary decision of coordinate Bench? (3)Whether on the facts and circumstances of the case, the Tribunal is right in law in interpreting Entry No. 22 to Schedule 11 of the Income-tax Act, 1961 for the purpose of denial of deduction under section 80IA (2)(iii) of the Income-tax Act, 1961 in respect of electronic devices with multiple memory and scientific functions? (4)Whether on the facts and circumstances of the case, the Tribunal has substantially erred in law in confirming the action of the Assessing Officer for deemed dividend under section 2(22)(e) at Rs.5,11,961/- by holding that the accumulated depreciation as per the Income-tax Act is not to be given effect for determining accumulated profits and the same is to be computed as per Companies Act? The High Court has refused to entertain the appeal on the ground that no substantial question of law arises from the order of the Tribunal, as claimed by the assessee. Having heard the counsel for the parties, we are satisfied that the questions raised by the assessee except question no.1, are substantial questions of law which require consideration by the High Court. Accordingly, the impugned order is set aside in respect of Question Nos. 2, 3 and 4 and the appeal is restored to the file of the High Court for being decided on merits, in accordance with law. The appeal stands disposed of accordingly. ...........................................J. (ASHOK BHAN) New Delhi; ..........................................J. July 09, 2007. (V.S. SIRPURKAR) "