2005 (2) TMI 109 - HC - Income Tax

Summary

Issues:
Interpretation of market fee liability for assessment year 1979-80 based on Supreme Court order.

Analysis:
The case involved a dispute regarding the deduction claimed by the assessee for market fee liability for the assessment year 1979-80. The Income-tax Appellate Tribunal referred the question of law to the High Court for its opinion. The Tribunal had disallowed the excess market fee claimed by the assessee beyond 2 per cent, as determined by the Supreme Court in its order dated July 31, 1979. The Tribunal based its decision on the interim order of the Supreme Court dated September 25, 1978, which stayed the levy beyond 1.5 per cent until the final decision was made. The High Court noted that the liability to pay market fee beyond 1.5 per cent did not accrue during the financial year 1978-79, as the Supreme Court upheld the levy only to the extent of two per cent against three per cent. Thus, the Court concurred with the Tribunal's decision to disallow the excess market fee claimed by the assessee.

The High Court's decision was supported by a previous case, CIT v. Sohan Lal Kharait Ram [2007] 290 ITR 694 (P&H), where similar principles were applied. The Court emphasized that there was no justification for the assessee to claim a deduction of Rs. 95,382.05 towards market fee due as of March 31, 1979, as the liability was limited to 1.5 per cent during the relevant financial year. Therefore, the High Court upheld the Tribunal's decision to disallow the excess market fee liability claimed by the assessee. The judgment was delivered in favor of the Revenue, affirming the Tribunal's decision and rejecting the assessee's claim for deduction of the excess market fee amount.

In conclusion, the High Court clarified the interpretation of market fee liability for the assessment year 1979-80 based on the Supreme Court's order and previous legal precedents. The decision highlighted the importance of adhering to the specific terms and conditions set by the Supreme Court regarding the market fee levy, ultimately ruling in favor of the Revenue and upholding the disallowance of the excess market fee claimed by the assessee.