Gujarat High Court
Ambalal Sarabhai Enterprises Limited. ... vs Asst. Commissioner Of Income Tax ... on 23 November, 2006
TAXAP/1920/2005 1/5 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL No. 1920 of 2005
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AMBALAL SARABHAI ENTERPRISES LIMITED. Appellant(s)
Versus
ASST. COMMISSIONER OF INCOME TAX Opponent(s)
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Appearance :
MS AMRITA M THAKORE for Appellant(s) : 1,
None for Opponent(s) : 1,
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HONOURABLE THE ACTING CHIEF JUSTICE
CORAM :
Y.R.MEENA
and
HONOURABLE MR.JUSTICE A.S.DAVE
Date : 23/11/2006
ORAL ORDER
The following questions are proposed for admission of this appeal: (1) Whether Tribunal is right in fact and in law in holding that interest on bonds issued to the shareholders of amalgamating companies in lieu of shares held by them in the capital of amalgamating companies is capital expenditure and not allowable either u/s 36(1)(iii) or u/s 37(1) or u/s 28 of the IT Act, 1961 following Tribunal's orders of A.Y 198485, 198586, 198788, 198990 and 199091 in appellants' own case?
(2) Whether Tribunal is right in fact and in law in confirming disallowance of foreign exchange fluctuations of Rs. 28,14,599 on account of repayment of loan taken for import of plant and TAXAP/1920/2005 2/5 ORDER machinery on the ground that it is capital in nature following Tribunal's order of A.Y 198788 in appellants' own case?
(3) Whether Tribunal is right in fact and in law in confirming disallowance of guarantee commission of Rs. 50,307 paid to bankers for ensuring deferred payment of purchase consideration of machinery by treating it as capital in nature by following its earlier orders of A.Y 198485 and A.Y 198586 in appellants' own case and in not following the decision of Hon'ble Supreme Court involving identical issues and facts in case of Addl. Commissioner of Income Tax Vs. Akkamamba Textles Ltd. (1997) 227 ITR 464 and Commissioner of Income Tax Vs. Sivakami Mills Ltd. (1997) 227 ITR 456?
(4) Whether Tribunal is right in fact and in law in upholding disallowance of damages paid of Rs. 2,299 under ESIC Act for delay in payment of ESI contributions by treating it as "penalties and fines" for infringing provisions of ESIC Act?
(5) Whether Tribunal is right in fact and in law in not allowing and in restoring to the file of AO the issue of claim of deduction of a sum of Rs. 3,82,000/ while computing capital gains on transfer of Shahibaug house, being structural damages deducted by the purchasers from the consideration payable by them, by mechanically following its earlier order in appellants' own case in A.Y 198586 even though legal and factual issues involved in the assessment year under appeal and those in A.Y 198586 are distinctly different and even though all the documents and other relevant materials were on its record justifying appellants' claim?
(6) Whether Tribunal is right in fact and in law in dismissing as "not pressed" the ground of claim of loss of subsidiary companies amalgamated with appellants by following its earlier order in appellants' own case in A.Y 198586 even though the ground was not "not pressed" and even though legal and factual issues involved in assessment year under appeal and those in A.Y 1985 86 are distinctly different?
(7) Whether Tribunal is right in fact and in law in not allowing and in restoring to the file of AO the claim of deduction u/s 48(2) applicable to assets other than land and building, as against TAXAP/1920/2005 3/5 ORDER deduction granted as applicable to land and building, while computing capital gains in respect of assignment of business as a going concern under the name " Shahibaug Department Store" at Bombay by following Tribunal's order of earlier assessment year 198788 in appellants' own case even though legal and factual issues involved in assessment year under appeal and those in A.Y 198788 are distinctly different and even though all the documents and other relevant materials justifying appellants' claim were on record of the Tribunal and lower authorities?
(8) Whether Tribunal is right in fact and in law in not allowing and restoring to the file of AO the issue of claim of depreciation for the 21 months period comprising the previous year simply by observing that certain new legal arguments have been raised even though there were no new additional factual arguments raised and even though all the documents and other relevant materials were on Tribunal's record justifying appellants' claim?
(9) Whether Tribunal is right in fact and in law in dismissing ground of taxing of consideration for transfer of shares of SG Chemicals and Dyes Trading Ltd. (for "SGT") at a higher amount of Rs. 2,09,23,000/ as against Rs. 2 crores offered by appellants, ground of rejection of claim of substitution of fare market value of shares as on 1.4.1974 and ground of granting of deduction u/s 48(2) at the rate of 10%, as against at the rate of 30%, in respect of computation of capital gains on transfer of 500 Equity Shares of SGT by following Tribunal's earlier order in appellants' own case of A.Y 198990 even though legal and factual issues involved in assessment year under appeal and those in A.Y 198990 are distinctly different and even though it is admitted fact that appellants have not received consideration more than Rs. 2 crores, that the shares were acquired prior to 1.4.1974 and that what is transferred is not land and building but the shares?
(10) Whether Tribunal is right in fact and in law in not holding that expenses of stamp duty etc. of Rs. 15,27,315 admittedly incurred in connection with transfer of appellants' erstwhile SG Dyes Division are allowable against capital gains taxed and assessed in A.Y 198586 even though all the documents and other relevant materials were on its record justifying appellants' claim?
TAXAP/1920/2005 4/5 ORDER (11) Whether Tribunal is right in fact and in law in not allowing and in setting aside to the file of AO the issue of claim of deduction u/s 43B in respect of sales tax etc. of earlier years paid during the year even though all the documents and other relevant materials justifying appellants' claim were on record of Tribunal?
(12) Whether Tribunal is right in fact and in law in dismissing as "not pressed" the ground of levy of interest u/s 215 even though the ground was not 'not pressed' and even though it is an admitted position that various additions and disallowances are not only debatable and arguable but are also unforeseen by appellants?"
In most of the questions, the matter has been restored to the Assessing Officer and no question of law does arise. In question Nos. 6 and 9, learned counsel for the appellants submits that there is a factual mistake and liberty be given to the appellants to move a Misc. Application before the Tribunal. So far as the issues raised in question Nos. 1, 2 and 4 are concerned, learned counsel fairly admits that similar questions were proposed for admission of the appeal before this Court, but the appeal was not admitted in terms of those questions.
Heard learned counsel for the appellant.
The appeal is admitted in terms of the following question: "Whether Tribunal is right in fact and in law in confirming disallowance of guarantee commission of Rs. 50,307 paid to bankers for ensuring deferred payment of purchase consideration of machinery by treating it as capital in nature by following its earlier orders of A.Y 198485 and A.Y 198586 in appellants' own case and in not following the decision of Hon'ble Supreme Court involving identical issues and facts in case of Addl. Commissioner of Income Tax Vs. Akkamamba Textles Ltd. (1997) 227 ITR 464 and Commissioner of Income Tax Vs. Sivakami Mills Ltd. (1997) 227 ITR 456?
TAXAP/1920/2005 5/5 ORDER
Issue notice to the other side. Paper book be filed within 3
months.
List the appeal for final hearing after 3 months.
Considering the submissions, we also give liberty to the appellant to file Misc. Application before the Tribunal, so far the issues raised in question Nos. 6 and 9 are concerned.
(Y.R. Meena, Actg.C.J.) (Anant S. Dave, J.) */Mohandas