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2010 Supreme(SC) 1521
SUPREME COURT OF INDIA
S.H. KAPADIA, H.L. DATTU, JJ.
Commissioner of Income Tax, Delhi – Appellant
Versus
Jindal Equipment Leasing and Consultancy Service Limited – Respondent
Civil Appeal Nos. 4596, 4597 of 2003, 567 of 2010, S.L.P. (C) No. 8367 of 2009
Decided On : 19-01-2010
The court emphasized the need for de novo consideration of income tax appeals in accordance with the law, and directed the High Court to address specific questions in the case.
Headnote:
Income Tax Act, 1961 - Section 260-A - De novo consideration of income tax appeals
Fact of the Case:
The High Court disposed of income tax appeals filed by the Department under Section 260-A of the Income Tax Act, 1961, in a manner unsatisfactory to the court.
Finding of the Court:
The court found the manner in which the High Court disposed of the income tax appeals unsatisfactory and required the cases to be remitted to the High Court for de novo consideration in accordance with the law.
Issues: The court framed the question of whether the Tribunal was justified in directing the assessing officer to allow deduction of the losses at Rs. 111 per NCD as a business loss.
Ratio Decidendi: The High Court was directed to consider the effect of the assessees retaining the detachable warrant and the market value of the shares at the time of issue of NCD, and to answer the question in accordance with the law.
Final Decision: The civil appeals were disposed of with no order as to costs.
ORDER :
Heard the learned counsel on both sides.
Delay condoned.
Leave granted in the special leave petition.
1. Having gone through the matter at length, we are not satisfied with the manner in which the High Court had disposed of the income tax appeals filed by the Department under Section 260-A of the Income Tax Act, 1961. In the circumstances, we are required to remit the cases to the High Court for de novo consideration in accordance with law.
2. For the sake of clarity, we would like to frame the question in these cases, which is as follows:
“Whether, on the facts and circumstances of this case, the Tribunal was justified in directing the assessing officer to allow deduction of the losses at Rs. 111 per NCD as a business loss?”
3. In this connection, the High Court will also consider the effect of the assessees retaining the detachable warrant and, if that is taken into account, whether there would be, at all, a trading loss? It is the case of the Department, before us, which is, of course, disputed by the assessees that the High Court has failed to notice the market value of the shares at the time of issue of NCD. We express no opinion on the merits of the case. We expect the High Court to answer the above question in accordance with law.
4. Accordingly, the civil appeals are disposed of with no order as to costs.
