Prem Bansal Real Estate Pvt. Ltd. V. The Commissioner of Income Tax, Central Circle, Ludhiana and another

ITA/274/2012

AI Insights

The case involves M/s Prem Bansal Real Estate Pvt. Ltd., the appellant, contesting an order from the Income Tax Appellate Tribunal concerning the Assessment Year 2007-08. The primary legal issues revolved around the application of the judgment in National Laggard Works Vs. Commissioner of Income Tax and the disallowance of certain expenditures which affected the profits eligible for deduction under Section 80 IB of the Income Tax Act. The appeal was admitted in 2013, and after deliberations, the court found that the issues concerning the deductions under Section 80 IB were settled in favor of the assessee based on a recent CBDT circular and related high court judgments.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 807624 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 12-12-2016
• Assessment Year: misc
• Other Referred Cases: National Laggard Works Vs. Commissioner of Income Tax, Income-Tax Officer-Ward5(1) vs. Keval Construction, Commissioner of Income Tax-IV, Nagpur vs. Sunil Vishwambharnath Tiwari, Principal CIT, Kanpur vs. Surya Merchants Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: RAJESH KATOCH
• Assessee Lawyers: RADHIKA SURI; RINKU DAHIYA
• Keywords: Assessment Year 2007-08; Deduction under section 80-IB; Disallowance of Expenditure; Income Tax; Perversion of order
• Section: 80-IB

Judgement Text

"ITA No.274 of 2012 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Sr. No.101-2 ITA No.274 of 2012 (O&M) Date of decision: 12.12.2016 M/s Prem Bansal Real Estate Pvt. Ltd., Zirakpur ....Appellant versus The Commissioner of Income Tax, Central Circle, Ludhiana and another ....Respondents CORAM: HON'BLE MR. JUSTICE S.J. VAZIFDAR, CHIEF JUSTICE HON'BLE MR. JUSTICE DEEPAK SIBAL * * * * Present:- Mrs. Radhika Suri, Senior Advocate with Ms. Rinku Dahiya, Advocate for the appellant. Mr. Rajesh Katoch, Advocate for the respondents. * * * * S.J. VAZIFDAR, CHIEF JUSTICE (ORAL) CM No.27753-CII of 2012 For the reasons stated in the application, the delay of 128 days in filing the appeal is condoned subject to all just exceptions. Main Appeal This is an appeal against the order of the Tribunal pertaining to the Assessment Year 2007-08. According to the assessee, the following substantial questions of law arise in this appeal:- i) Whether in facts and circumstance of the case, the Jyoti Sharma 2016.12.14 10:56 I attest to the accuracy and authenticity of this document Chandigarh ITA No.274 of 2012 (O&M) -2- Income Tax Appellate Tribunal has fallen in error while applying the ratio of the judgment of National Laggard Works Vs. Commissioner of Income Tax 288 ITR Page 18 to the facts of the present case? ii) Whether in facts and circumstances of the case the Income Tax Appellate Tribunal has failed to consider that disallowance of expenditure debited to profit and loss account would result in enhancement of profits derived from the industrial undertaking eligible for deduction under Section 80 IB of the Income Tax Act? iii) Whether in facts and circumstances of case, the Income Tax Appellate Tribunal was in law that assessee has not established that the additions/disallowance made by AO and confirmed by CIT(A) constitute profits derived from an eligible business and is not entitle for deduction u/s 80IB? iv) Whether the impugned order passed by Income Tax Appellate Tribunal is perverse? 2. The appeal was admitted by an order dated 08.01.2013. 3. Mr. Rajesh Katoch, learned counsel appearing on behalf of the respondent-Department states that questions No.2 and 3 are liable to be answered in favour of the assessee in view of circular No.37/2016 dated 02.11.2016 issued by the CBDT. The Circular refers to the following judgments of three High Courts:- (1) Income-Tax Officer-Ward5(1) vs. Keval Construction, Tax Appeal No.443 of 2012, December 10, 2012, Gujarat High Court. (2) Commissioner of Income Tax-IV, Nagpur vs. Sunil Vishwambharnath Tiwari, IT Appeal No.2 of 2011, Jyoti Sharma 2016.12.14 10:56 I attest to the accuracy and authenticity of this document Chandigarh ITA No.274 of 2012 (O&M) -3- September 11, 2015, Bombay High Court. (3) Principal CIT, Kanpur vs. Surya Merchants Ltd., I.T. Appeal No.248 of 2015, May 03, 2016, Allahabad High Court. The Circular further states that the views taken in these judgments have attained finality as the Department has accepted the same. Mr. Katoch states that in view thereof these issues are liable to be answered in favour of the assessee. 4. Accordingly in view of Mr. Katoch's statement, questions No.2 and 3 are answered in favour of the assessee. It is, therefore, not necessary to decide the other questions raised by the assessee. 5. The appeal stands disposed of. (S.J. VAZIFDAR) CHIEF JUSTICE (DEEPAK SIBAL) JUDGE December 12, 2016 Jyoti 1 (i) Whether speaking/reasoned Yes/No (ii) Whether reportable Yes/No Jyoti Sharma 2016.12.14 10:56 I attest to the accuracy and authenticity of this document Chandigarh "