The Commissioner Of Income Tax v. M/S Punjab State Electricity Board

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. The Commissioner of Income Tax. Vs. M/s Punjab State Electricity Board. I.T.A. No.417 of 2010 Date of decision: 2.11.2010 -----Appellant. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE RAKESH KUMAR JAIN Present:-Mr. T.K. Joshi, Advocatefor the appellant. --- ADARSH KUMAR GOEL, J. This appeal has been preferred by the revenue underSection 260-A of the Income Tax Act, 1961 (for short, “the Act”)against the order dated 30.7.2009 of the Income Tax AppellateTribunal, Chandigarh in I.T.A. No.125/Chd/2009 for theassessment year 2001-02 proposing to raise following substantialquestions of law:- (i)“Whether on the facts and in the circumstancesof the case, the ITAT is legally correct in holdingthat in the present case, no colourable devicehas been adopted by the assessee behinddrafting the agreements between the assesseeand the financial institution was to reduce thetax liability artificially of both the parties and assuch the ratio of the decision of the Hon’bleApex Court in the case of Mc Dowell Ltd. vsCTO (154 ITR 148) (SC) has wrongly beeninterpreted. of the case, the ITAT is legally correct in holdingthat in the present case, no colourable devicehas been adopted by the assessee behinddrafting the agreements between the assesseeand the financial institution was to reduce thetax liability artificially of both the parties and assuch the ratio of the decision of the Hon’bleApex Court in the case of Mc Dowell Ltd. vsCTO (154 ITR 148) (SC) has wrongly beeninterpreted. (ii) Whether the ITAT’s order is perverse in notappreciating the facts and the law point bypiercing the corporate veil in order to see thereal intention of the assessee to understate itsincome and defeat the revenue of its rightfuldues by using ‘colourable devices’ as perdecision of the Hon’ble Apex Court in the caseof Mc Dowell Ltd. vs CTO (154 ITR 148)(SC)”.appreciating the facts and the law point bypiercing the corporate veil in order to see thereal intention of the assessee to understate itsincome and defeat the revenue of its rightfuldues by using ‘colourable devices’ as perdecision of the Hon’ble Apex Court in the caseof Mc Dowell Ltd. vs CTO (154 ITR 148)(SC)”. Learned counsel for the revenue fairly states that thematter is covered against the revenue by order of this Court dated9.7.2009 in I.T.A. No.227 of 2009CITv. M/s Punjab StateElectricity Board. Accordingly, this appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE November 02, 2010ashwani (RAKESH KUMAR JAIN) JUDGE