MIS GANAPATHY & CO., BANGALORE versus THE COMMISSIONER, INCOME TAX BANGALORE

Citation: [2016] 1 S.C.R. 187 · Decided: 18-01-2016 · Supreme Court of India · Bench: RANJAN GOGOI · Disposal: Dismissed

Judgment (excerpt)

[2016] 1 S.C.R. 187 
MIS GANAPATHY & CO., BANGALORE 
v. 
THE COMMISSIONER, INCOME TAX BANGALORE 
(Civil Appeal No. 1964 of 2008) 
JANUARY 18, 2016 
[RANJAN GOGOi AND PRAFULLA C. PANT, JJ.] 
Income Tax Act, 1961: 
Disallowance of service charges - Assessee claiming benefit 
A 
B 
of disallowance of service charges paid to the Company - Assessing 
C 
officer as also CIT disallowed the said claim relying on the 
explanation submitted for the previous assessment year and the 
failure of assessee to furnish proof of service rendered by the 
company in the relevant assessment year - However, the tribunal 
deleting the disallowance of service charges paid - High Court set 
0 
aside the order of the tribunal - On appeal, held: If service had 
been rendered to the assessee by the Company during the period 
under assessment and service charges had been paid for such service 
rendered, it was incumbent on the part of the assessee to adduce 
proof of such service having been rendered during the period under 
assessment which the assessee failed to do so - Thus, the High 
E 
Court was justified in setting aside the conclusion of the tribunal. 
Loss shown by the assessee in the film business - Deduction 
- Claim of - Rejected by Assessing Officer and CIT, however, the 
tribunal allowed the deduction taking into account the view recorded 
in the another proceeding by tribunal in case of a sister concern -
F 
High Court held that the view taken by the tribunal in the matter of 
sister concern untenable and set aside the order of the tribunal -
On appeal, held: Having regard to the facts and circumstances in 
which the "investment" was made and "loss" claimed, the view taken 
by the High Court that the entire transaction was a sham transaction 
and was a calculated device to avoid tax liability cannot be faulted 
G 
with. 
Donation made to Ashram by assessee - Claim of deduction 
- Refused by Primary and First Appellate Authority on the ground 
that the necessary certificate showing that the donee had complied 
187 
H 
188 
A 
B 
c 
D 
SUPREME COURT REPORTS 
(2016] l S.C.R. 
with the conditions subject to which registration was granted to it 
u/s. 35(2A) not produced by assessee - Tribunal allowing the 
asses see" s claim for deduction holding that the said conditions were 
not material - High Court allowed revenue's appeal holding that 
the said conditions were necessary preconditions to grant of statutory 
registration and had to be satisfied - On appeal, held: No such 
certificate had been furnished by assessee and also that all 
Authorities have consistently held that if and when such certificate 
is produced the consequential benefit can be afforded to the assessee 
- Thus, the view taken by High Court that assessee was not entitled 
to the benefit of donation made to donee was correct. 
s. 256(2) - Statement of case to the High Court - Reference 
power - Exercise of. by High Court - Held: It is the tribunal which 
is the final fact finding authority and it is beyond the power of the 
High Court in the exercise of its reference jurisdiction to reconsider 
such findings on a reappraisal of the evidence and materials on 
record unless a specific question with regard to an issue of fact 
being opposed to the weight of the materials on record is raised in 
the reference before the High Court - On facts, each relevant fact 
considered by the High Court to answer the questions referred to it 
on the claims of deduction raised by the assessee are acknowledged, 
admitted and undisputed facts - No fresh determination of facts 
E found by the tribunal have been made by the High Court - However, 
the High Court took into account certain additional facts, already 
on record, which were however not taken note of by the tribunal to 
arrive at its findings - There was no departure from the basic facts 
F 
found by the tribunal - Difference in the approach between the 
tribunal and the High Court, therefore, is not one relating to 
determination of new or additional facts but was merely one of 
emphasis on facts - This was an exercise within the jurisdiction of 
the High Court in the exercise of its reference power under the 
provisions of the Act. 
G 
Karnani Properties Ltd. vs. Commissioner of Income-
Tax, West Bengal 82 ITR 547; Rameshwar Prasad 
Bag/a vs. Commissioner of Income-Tax, U.P. 87 ITR 
421; Commissioner of Income-Tax, Bombay City vs. 
Greaves Cotton and Co.Ltd. 68 ITR 200; K. 
Ravindranathan Nair vs. Commissioner of Income-Tax 
H 

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