Itta/23/2007 Of The Commissioner Of Income Tax, Vijayawada v. M/S. Shalimar Wines
High Court
07 Dec 2010 In favour of: Revenue
Forum / Bench
High Court · taphc
Parties
Itta/23/2007 Of The Commissioner Of Income Tax, Vijayawada v. M/S. Shalimar Wines
Date of order
07 Dec 2010
Assessment year(s)
—
Outcome
Allowed
Case summary
In Itta/23/2007 Of The Commissioner Of Income Tax, Vijayawada v. M/S. Shalimar Wines, the High Court (2010) allowed the appeal. The decision went in favour of the Revenue.
Issue: The question whether the assessee was entitled to claim deductionof salary, and interest paid to the partners, in the returns was considered bya Division Bench of this Court in The Commissioner of Income Tax v M/s.Swarna Bar & Restaurant[[2]].
Decision: Accordingly the appeals filed by the Revenue are allowed, and theimpugned orders of the Income Tax Appellate Tribunal are set aside.
Summary auto-generated from the order below — read the full judgment for the complete reasoning.
The order — as passed by the High Court
THE HON’BLE SRI JUSTICE V.V.S.RAOAND
THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN
ITTA Nos.615 of 2006; 7 and 23 of 2007
Dated:07.12.2010
Between:
The Commissioner of Income Tax,Vijayawada.
and
…Petitioner
M/s.Shalimar Wines.
…Respondent
THE HON’BLE SRI JUSTICE V.V.S.RAOANDTHE HON'BLE SRI JUSTICE RAMESH RANGANATHAN
ITTA Nos.615 of 2006; 7 and 23 of 2007
COMMON ORDER:(per Hon’ble Sri Justice V.V.S.Rao)
In all these cases the assessee was granted a licence under theAndhra Pradesh Indian Liquor and Foreign Liquor Rules, 1970 and theAndhra Pradesh Excise Act, 1968. The licence enabled the assessee tocarry on trade in retail liquor business. The assessee commenced theirrespective business by forming a partnership firm with others. Such firmswere constituted either before or after obtaining the licence.
In the income tax returns, for the relevant year, the assessee claimeddeduction in respect of the salary and interest paid to the partners. Theassessing officer, following the judgment of the Supreme Court in Biharilal
Jaiswal v Commissioner of Income Tax[[1]],disallowed the deduction. The assessee was, however, successful before the Income Tax AppellateTribunal. The Revenue has now come forward with these appeals underSection 260A of the Income Tax Act, 1961.
Though the notices are served on the respondents, none appears andnobody entered appearance for them.
The question whether the assessee was entitled to claim deductionof salary, and interest paid to the partners, in the returns was considered bya Division Bench of this Court in The Commissioner of Income Tax v
M/s.Swarna Bar & Restaurant[[2]]. There is no dispute that the conclusiontherein squarely covers the lis in these cases. Following the same, these
appeals also have to be allowed.
Accordingly the appeals filed by the Revenue are allowed, and theimpugned orders of the Income Tax Appellate Tribunal are set aside. Nocosts.
_______________(V.V.S.RAO, J)
_____________________________
(RAMESH RANGANATHAN, J)
07.12.2010vs
[1](1996) 217 ITR 746
[2]ITTA Nos.613 of 2006 and batch, dated 09.9.2010
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