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Variety Hosiery Mills Vs. Commissioner of Income Tax. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtPunjab and Haryana High Court
Decided On
Case NumberI.T. Case No. 14 of 1977
Reported in(1984)39CTR(P& H)313
AppellantVariety Hosiery Mills
RespondentCommissioner of Income Tax.
Excerpt:
.....refusal to enter into a contract is contrary to statutory provisions or public duty, judicial review of such state action is inevitable. likewise, if state enters into a contract in consonance with article 299 rights of the parties shall be determined by terms of such contract irrespective of fact that one of the parties to it is a state or a statutory authority. for these precise reasons the equitable doctrine of promissory estoppel has been made applicable against the government, as against any other private individual, even in cases where no valid contract in terms of article 299 was entered into between the parties. hence, if government makes a representation or a promise and an individual alters his position by acting upon such promise, the government may be required to make good..........40,957 on the supposed profit of 1% towards government sales, and(2) denial of debiting towards loss account of expenses amounting to rs. 42,099 claimed on account of packing and post parcel account towards goods exported outside india.it was pleaded by the assessee before the tribunal that rate of 10% profits as to compute the first forementioned amount was on the higher side, especially when a lesser rate had been made applicable to another assessee messrs. luxmi hosiery. it was also so on account of price differentiation. the tribunal rejected these pleas of the assessee taking the view that according to the assessees own showing for the assessment year in question, the rate of profit was far more than 10%, with regard to the second aforementioned amount, the tribunal took the view.....
Judgment:

: M. M. Punchhi, J. - The petitioner Messrs Variety Hosiery mills Ludhiana has approached this Court seeking a mandamus in requiring the It Appellate Tribunal, Chandigarh Bench, Chandigarh to state its case and refer questions of law said to arise therefrom in the facts and circumstances mentioned hereafter.

2. The petitioner is a registered firm and carries on the business of manufacturing woollen hosiery goods. It transacts business in local as also in foreign markets. As a regular assessee assessed to income tax, it filed its return for the asst. yr. 1969-70. Undisputably while framing assessment against the petitioner, the Income Tax Authority had resort to the provisions of s. 145(2) of the IT Act, 1961. The ITO framed an assessment against the petitioner. On challenge, the petitioner obtained substantial relief in appeal before the AAC. Aggrieved against the said order, the petitioner as also the revenue filed cross appeals. The appeal of the petitioner was dismissed by the Tribunal and that of the revenue allowed. However, the said order was later rectified by the Tribunal in proceedings u/s 254(2) of the Act. Thereafter, the liability of the petitioner remained figuring on two counts :

(1) An addition to Rs. 40,957 on the supposed profit of 1% towards Government sales, and

(2) Denial of debiting towards loss account of expenses amounting to Rs. 42,099 claimed on account of packing and post parcel account towards goods exported outside India.

It was pleaded by the assessee before the Tribunal that rate of 10% profits as to compute the first forementioned amount was on the higher side, especially when a lesser rate had been made applicable to another assessee Messrs. Luxmi Hosiery. It was also so on account of price differentiation. The Tribunal rejected these pleas of the assessee taking the view that according to the assessees own showing for the assessment year in question, the rate of profit was far more than 10%, with regard to the second aforementioned amount, the Tribunal took the view that on the ITO itself, substantial concessions had been given to the assessee regarding fixation of rate of loss on export and that the aforesaid sum of Rs. 40,957 which was claimed as expenses towards placing the goods in foreign countries, had also been reckoned in principle towards fixation of rate of loss. In this view of the matter, the Tribunal, when approached to state the case to this court in reference, took the view that both these questions were pure questions of fact especially in the backdrop of the assessment having been framed u/s 145(2) of the Act. Thus, it held that no question of law arose which required reference.

3. The ld. counsel for the petitioner has just urged that important material on the record had not been taken into consideration by the Tribunal. That was stated to be the assessment order pertaining to asst. yrs. 1971-72, which has been passed earlier and the copies of those orders of the ITO as also of the Tribunal, Annex. (s) P.6, P.7, P. 8 and P. 9 attached with the present petition, were available with the Tribunal. In those orders, export losses were allowed varying between 25% to 30% over and above the post-parcel and packing expenses account debited by the assessee towards profit and loss account.

4. Concededly, there is no positive assertion in the petition that the copies of these orders were part of the file. We have been taken through the various orders passed by the Income Tax Authorities and we do not find any reference, made even remotely, thereto or at the askance of the petitioner. We cannot even otherwise assume that there orders were pressed into service by the petitioner for there is not even such trace on the present record to justify that stance. It seems that the petitioner if now trying to improve its case. As rightly observed by the Tribunal, no question of law arose in the circumstances and none could be suggested to us in the facts and circumstances of the case; the matter having been decided by the Tribunal on evidence and references and conclusions drawn therefrom.

5. For what has been stated above, there is no merit in this petition which fails and is hereby dismissed but without any order as to costs.


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