Gujarat High Court
Gujarat Gas Co. Ltd vs Acit Circle 4....Opponent(S) on 8 January, 2015
Author: Jayant Patel
Bench: Jayant Patel, S.H.Vora
O/TAXAP/1384/2014 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 1384 of 2014
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GUJARAT GAS CO. LTD....Appellant(s)
Versus
ACIT CIRCLE 4....Opponent(s)
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Appearance:
MR TUSHAR P HEMANI, ADVOCATE for the Appellant(s) No. 1
MS VAIBHAVI K PARIKH, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE JAYANT PATEL
and
HONOURABLE MR.JUSTICE S.H.VORA
Date : 08/01/2015
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE JAYANT PATEL)
1. The present appeal under Section 260A of the Income Tax Act (hereinafter referred to as the 'Act') has been preferred on hearing substantial questions of law. However, Mr.Hemani, learned counsel appearing for the appellant has restricted the appeal for question Nos.(e), (f), (g), (h), (l) and
(m) only. Hence, we may be required to consider to that extent in the present appeal.
"(e) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in confirming the disallowance of Rs.10,01,542/-
being sundry debit balance written-off.
(f) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in not appreciating that the aforesaid balances written off comprised of amount receivable in respect of advances given, shortages, return of defective Page 1 of 4 O/TAXAP/1384/2014 ORDER goods, claims, Government deposits etc., which are all in the nature of revenue expenditure and incidental to the business of the appellant and hence, the same ought to have been allowed as business/trading loss especially when such write off was approximately 0.03% of total turnover of the appellant?
(g) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in confirming the disallowance of Rs.3,26,171/- being the amount paid towards additional stamp duty on account of sale of LPG bottling plant by treating the same as capital loss?
(h) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal, consequent to treating stamp duty charges as capital loss, was right in law in not giving a direction to Appeal from Order to rework the capital gain of earlier year arising consequent to slump sale of LPG bottling plant after taking into account the amount of additional stamp duty paid during the year under consideration?
(l) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in confirming the action of Appeal from Order in setting off long term capital loss of Rs.93,33,608/- against the long term capital gain of Rs.95,04,906/- instead of setting off the same against short term capital gain of Rs.93,33,194/- when there is no particular provision under the scheme of the Income Tax Act, 1961 prescribing hierarchy or order of such set off.
(m) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in not appreciating that the amended Section 74 w.e.f. 01.04.2003 was not applicable to the year under consideration i.e. Asst. Year 2002-03 and as per the law prior to amendment, there was no prohibition on setting off of long term capital loss against short term capital gain and hence, appellant was well within its right of setting off long term capital loss against short capital gain?"
2. We have heard Mr.Hemani, learned counsel appearing for the appellant.
Page 2 of 4O/TAXAP/1384/2014 ORDER
3. On the aspects of question Nos.(e) and (f), the perusal of findings by the Assessing Officer read with C.I.T. Appeal and the Tribunal shows that it was found that the amounts were not falling part of business expenditure but could be, at the most, termed as capital loss. It deserves to be recorded that in the Books of Accounts of the appellant, the aforesaid amount was shown in previous year to the Assessment Year as deposits - under the head of capital. Therefore, when it is converted under the head of business expenditure, it has been dis-allowed. We do not find that any question of law would arise, as sought to be canvassed.
4. On question Nos.(g) and (h), the amount towards additional stamp duty, as per the appellant, is relating to the transactions of sale of capital assets of L.P.G. bottling plant and the incidence of capital expenditure has occurred in the next assessment year but the treatment was given as business expenditure. The capital expenditure, debited as business expenditure, is dis-allowed by the Assessing Officer, C.I.T. Appeal and the Tribunal. We do not find that any substantial question of law would arise for consideration in the present appeal, as sought to be canvassed.
5. On the question Nos.(l) and (m), the perusal of the order passed by the Assessing Officer, C.I.T. Appeal and the Tribunal shows that as the amount of long term capital loss was not adjusted first against the long term capital gain but was adjusted against short term capital gain, the same was dis- allowed since intra-head adjustment under the long term capital gain was not made. We do not find that any substantial question of law would arise for interpretation of Section 74 of Page 3 of 4 O/TAXAP/1384/2014 ORDER the Act, as sought to be canvassed.
6. In view of the above, the appeal is not entertained. Hence, dismissed.
(JAYANT PATEL, J.) (S.H.VORA, J.) Hitesh Page 4 of 4