THE COMMISSIONER OF INCOME TAX V. M/S VIJAYANAND ROADLINES LTD

ITA/1048/2008

AI Insights

The case involves the Commissioner of Income Tax and the Assistant Commissioner of Income-Tax as appellants against M/s Vijayanand Roadlines Ltd., the respondent. The dispute originated from the assessment year 2003-2004, where the assessee, engaged in the transport business, filed a return declaring an income of Rs.1,83,90,075. The Assessing Officer made certain additions during the assessment, which were upheld by the Commissioner of Income Tax (Appeals) but later contested by the assessee at the Income Tax Appellate Tribunal, resulting in a favorable decision for the assessee. The revenue's appeal to the High Court challenged the Tribunal's decision, focusing on whether the Tribunal's findings on unexplained investments and expenses were perverse and arbitrary.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 700957 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 28-08-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: S PARTHASARATHI
• Assessee Lawyers: Y V RAVIRAJ
• Keywords: Assessment Year 2003-2004; Income Tax; Interest disallowance; Unexplained investment; Previous Year Expenses
• Section: 260A

Judgement Text

"IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 28th DAY OF AUGUST 2013 PRESENT THE HON’BLE MR. JUSTICE K.L. MANJUNATH AND THE HON’BLE MR. JUSTICE S.N. SATYANARAYANA ITA NO.1048/2008 BETWEEN: 1. THE COMMISSIONER OF INCOME TAX, 2ND FLOOR, NAVANAGAR, HUBLI 580 025. 2. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 3(1), HUBLI. .. APPELLANTS (BY SRI. Y.V. RAVIRAJ, ADV.) AND: M/S VIJAYANAND ROADLINES LTD., GIRIRAJ ANNEX, CIRCUIT HOUSE ROAD, HUBLI. .. RESPONDENT (BY SRI. S. PARTHASARATHI, ADV.) THIS ITA IS FILED UNDER SECTION 260 A OF INCOME TAX ACT 1961 AGAISNT THE ORDER DATED 11/07/2008 PASSED IN ITA NO.302/BANG/2008 ON THE FILE OF THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A PARTLY ALLOWING THE APPEAL. 2 THIS ITA COMING ON FOR FINAL HEARING THIS DAY, K.L. MANJUNATH J., DELIVERED THE FOLLOWING : JUDGMENT The revenue has come up in this appeal aggrieved by the order passed by the Income Tax Appellate Tribunal in ITA No.302/Bang/2008 dated 11/07/2008 for the assessment year 2003-2004. 2. The assessee is engaged in the business of transport. Return of income was filed on 28/11/2003 declaring income of Rs.1,83,90,075/-. At the time of assessment, the Assessing Officer made certain additions and order of assessment was passed on 29/03/2006. 3. Aggrieved by the order of assessment, an appeal came to be filed before the Commissioner of Income Tax(Appeals), Bangalore, which appeal came to be dismissed on 28/12/2007 confirming the order of the Assessing Officer. 3 4. Aggrieved by the same, an appeal came to be filed by the assessee before the Income Tax Appellate Tribunal, Bangalore, which appeal came to be allowed. Therefore, the present appeal is filed. 5. The appeal was admitted on 22/10/2009 to consider the following substantial question of law: Whether the finding of the Tribunal in deleting the addition made by the Assessing Officer as unexplained investment in respect of previous year expenses, differences in cost of building and interest is perverse and arbitrary being contrary to law and material on record? 6. We have heard Mr. Raviraj, for the revenue and Mr. Parthasarathi for the assessee. 7. The short question that arises for our consideration is: Whether the assessee has explained the investment made and the expenses incurred in 4 case of construction of building and whether the interest has to be disallowed or not? 8. So far as this point is concerned, admittedly it is a question of fact. The question whether assessee has incurred any expenses for the previous year, is required to be taken into consideration while passing the order of assessment. This aspect of the matter has not been considered by the authorities below. The Assessing Officer has to consider the same in accordance with law and pass an order on merits after providing an opportunity to the assessee to explain the expenditure incurred by him for the previous assessing year. Therefore, we are of the opinion that for answering the question of law framed herein, the matter requires to be reconsidered by the Assessing Officer afresh as stated supra. In the circumstances, the appeal is allowed. The order passed by the Assessing Officer which has been affirmed by the Commissioner of Income Tax(Appeals), Bangalore 5 and further modified by the Income Tax Appellate Tribunal are set aside. The matter is remanded to the Assessing Officer for fresh consideration in accordance with law. Sd/- JUDGE Sd/- JUDGE kmv "