THE COMMISSIONER OF INCOME TAX V. TOPLINE CREDITS LTD

ITA/401/2007

AI Insights

This case involves an appeal by the Commissioner of Income-Tax and the Assistant Commissioner of Income-Tax against Topline Credits Ltd., concerning the applicability and interpretation of the Interest-Tax Act in relation to hire purchase transactions. The appeal was filed under Section 260-A of the Income Tax Act, 1961, challenging the ITAT's order dated 30-11-2006, which was based on a previous ITAT decision. The High Court's decision to remand the case was influenced by its earlier judgment, which had set aside the ITAT's order and directed a re-examination of the issues under the Interest-Tax Act.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 738585 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 10-10-2013
• Assessment Year: misc
• Other Referred Cases: ITA Nos.1552, 1553 and 1554 of 2005 C/W ITA Crob. Nos.1 and 2 of 2006
• Laws Referred To: Income Tax Act, 1961, Interest-Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SHYAM SUNDAR BAJPEKAR
• Assessee Lawyers: K V ARAVIND
• Keywords: Credit Institution; Hire purchase; Income tax appeal; Interest Tax
• Section: 260-A

Judgement Text

" IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 10TH DAY OF OCTOBER 2013 PRESENT THE HON’BLE MR.JUSTICE DILIP B.BHOSALE AND THE HON’BLE MR.JUSTICE B.MANOHAR ITA NO.401/2007 BETWEEN: 1.The Commissioner of Income-Tax Central Circle C.R.Building Queens Road Bangalore. 2.The Assistant Commissioner of Income-Tax Circle – 12(3) C.R.Building Queens Road Bangalore. … Appellants. (By Sri.K.V.Aravind, Adv.) AND: Topline Credits Ltd., No.3353, 5th Cross HAL II Stage, 12 A Main Bangalore-560 008. … Respondent (By Sri.Shyam Sundar Bajpekar, Adv.) 2 This ITA is filed u/S.260-A of I.T. Act, 1961 arising out of Order dated 30-11-2006 passed in ITA No.11/Bang/2005 for the Assessment Year 1998-99, praying that this Hon’ble Court may be pleased to: i. formulate the substantial questions of law stated therein, ii. allow the appeal and set aside the order passed by the ITAT, Bangalore in ITA No.11/Bang/2005 dated 30-11-2006 confirming the order of the Appellate Commissioner and confirm the order passed by the Asst. Director of Income Tax, Circle-12(3), Bangalore, in the interest of justice and equity. This ITA is coming on for hearing this day, DILIP B. BHOSALE J., delivered the following: P.C. This Income Tax Appeal is directed against the order dated 30th November 2006 passed by the Income Tax Appellate Tribunal (for short ‘the Tribunal’) in ITA Nos.9, 10 & 11/Bang/2005 whereby all the three appeals filed by the Revenue were partly allowed. The present appeal, however, arises from the order passed in ITA No.11/Bang/2005. 3 2. This Court is informed that the order dated 30-11-2006 was passed by the Tribunal in ITA Nos.9, 10 and 11/Bang/2005 for the assessment years 1996-97, 1997-98 and 1998-99 based on its (the Tribunal) order dated 22-09-2004 in ITA Nos.39-41/Bang/2003. In other words, the impugned order, in the present appeal, is based on the order passed by the Tribunal in ITA Nos. 39-41/Bang/2003 dated 22-09-2004. The order dated 22-09-2004 passed in ITA Nos.39-41/Bang/2003 was carried by the Revenue in appeals, under Section 260-A of the Income Tax Act, before this Court being ITA Nos.1552, 1553 and 1554 of 2005 and ITA Crob. Nos. 1 and 2 of 2006. The questions raised in those appeals and in the present appeal are similar. Those appeals were allowed. The cross-objections filed by the assessee were also allowed and the order of the Tribunal came to be set aside and the matters were remanded to the Tribunal to consider the issue with regard to the applicability of the Act as well as in respect of giving a finding on the nature 4 of the transaction in question in the light of observations made in the said judgment. 3. After remand, the Tribunal framed the following questions and considered them in the light of the judgment of this court dated 15-06-2010: (i) What is the nature of the income on which the interest-tax is chargeable? (ii) What is a credit institution under the Interest-tax Act? (iii) What is the difference between simple hire purchase and hire purchase financing? (iv) If the assessee’s income is chargeable to Interest-tax Act, whether the entire hire purchase charges are chargeable to Interest-tax? 4. The Tribunal answered first three questions in favour of the Revenue and against the assessee and so far as 4th question is concerned, the Tribunal remanded the matter to the Assessing Officer to re-examine the portion of 5 interest in the Hire Purchase transactions of the assessee and to bring only the interest portion to tax under the Interest-Tax Act. 5. In view thereof, Mr.K.V.Aravind, learned counsel appearing for the Revenue submitted that this appeal may also be allowed in terms of the judgment dated 15-06-2010 passed by the Division Bench of this Court in ITA Nos.1552, 1553 and 1554 of 2005 C/W ITA Crob. Nos.1 and 2 of 2006 and prayed for remand of the matter to the Tribunal. 6. None appears for the respondent though served. We are not in a position to get any assistance from the respondent. However, having considered the submissions advanced by the learned Counsel for the Revenue and perused judgment of this Court dated 15-06-2010 and the order passed by the Tribunal dated 29-12-2011 on remand, we allow this appeal and set aside the order of the Tribunal dated 30-11-2006 and restore ITA 6 No.11/Bang/2005 to file and direct the Tribunal to decide ITA No.11/Bang/2005 afresh in terms of the judgment of this Court dated 15-06-2010 after giving an opportunity of hearing to the respondent. All contentions on merits are kept open. Sd/- JUDGE Sd/- JUDGE mpk/-* "