| Case ID |
03e006cb-7cae-4b83-b2f9-ae5939363a70 |
| Body |
View case body. Login to View |
| Case Number |
CIVIL APPEAL Nos. 5525 - 5526 OF 2005 |
| Decision Date |
Aug 11, 2015 |
| Hearing Date |
|
| Decision |
The Supreme Court ruled in favor of the appellant, Fibre Boards (P.) Ltd, allowing the exemption of capital gains under Section 54G of the Income-tax Act, 1961. The Court determined that the notification declaring Thane as an urban area continued to apply even after the repeal of the section that originally established it. The Court emphasized that the advances made by the assessee towards the purchase of new machinery and land constituted sufficient utilization of capital gains, thereby fulfilling the requirements of Section 54G. The judgment reversed the High Court's decision and reinstated the Tribunal's ruling which had favored the assessee. |
| Summary |
In the case of Fibre Boards (P.) Ltd vs. Commissioner of Income Tax, the Supreme Court addressed the application of Section 54G of the Income-tax Act, 1961, concerning the exemption of capital gains when shifting an industrial undertaking from an urban to a non-urban area. The appellant, Fibre Boards, sold its industrial unit in Thane and sought to claim exemptions on capital gains based on advances made for purchasing new machinery and land in a non-urban area. The High Court had denied the exemption, asserting that the area was not declared non-urban by the Central Government. However, the Supreme Court found that the notification declaring Thane as an urban area remained valid under Section 24 of the General Clauses Act, thus allowing the exemption. The case highlights important aspects of capital gains exemptions, the interpretation of urban and non-urban classifications, and the significance of advance payments in meeting statutory requirements. This ruling is crucial for businesses looking to relocate and utilize capital gains effectively, ensuring compliance with current tax laws while promoting industrial growth in non-urban areas. |
| Court |
Supreme Court of India
|
| Entities Involved |
Fibre Boards (P.) Ltd,
Commissioner of Income Tax, Bangalore
|
| Judges |
A.K. Sikri,
Rohinton Fali Nariman
|
| Lawyers |
Dhruv Mehta, Sr. Adv.,
A. Kulkarni,
Yashraj Singh Deora,
Ms. Shreya Agrawala,
Arijit Prasad,
Ms. Gargi Khanna,
Mrs. Anil Katiyar, Advs.
|
| Petitioners |
Fibre Boards (P.) Ltd
|
| Respondents |
Commissioner of Income Tax, Bangalore
|
| Citations |
2015 SLD 2393,
(2015) 376 ITR 596
|
| Other Citations |
State of Orissa v. M.A. Tulloch & Co. [1964] 4 SCR 461,
Ratan Lal Adukia v. Union of India [1989] 3 SCC 537,
Poonjabhai Vammalidas v. CIT [1990] 186 ITR 572/53 Taxman 171 (SC),
State of Punjab v. Harnek Singh [2002] 3 SCC 481,
Rayala Corporation (P) Ltd. & M.R. Pratap v. Director of Enforcement [1969] 2 SCC 412,
Kolhapur Canesugar Works Ltd. v. Union of India [2000] 2 SCC 536,
General Finance Co. v. Asstt. CIT [2002] 257 ITR 338/124 Taxman 432 (SC),
Mamleshwar Prasad v. Kanahaiya Lal [1975] 3 SCR 834,
State of U.P. v. Synthetics and Chemicals Ltd. [1991] 3 SCR 64,
State of Punjab v. Mohar Singh [1955] 1 SCR 893,
CIT v. Venkateshwara Hatcheries (P.) Ltd. [1999] 237 ITR 174/103 Taxman 503 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
54G,
24
|