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Informist, Tuesday, Apr. 21, 2026

 

NEW DELHI – The Supreme Court Tuesday pulled up the income tax department for routinely filing appeals against orders of the high courts and rejected its case against Britannia Industries Ltd. "In every case you are filing an SLP (Special Leave Petition). Are they not going to law officers for approval? It is a burden on the system," said a bench of P.S. Narasimha and Justice Alok Aradhe.

 

The apex court dismissed the income tax department's plea seeking to pass a fresh assessment order on Britannia Industries' income for assessment year 2018-19 (Apr-Mar). The tax department had alleged that the assessing officer's previous order on the company's income assessment was prejudicial to the interest of the revenue officers. "We are not inclined to interfere with the order passed by the (Calcutta) High Court," said the bench.

 

The case is with regard to Britannia Industries acquiring leasehold land and building from Bombay Dyeing and Manufacturing Co. Ltd. The leasehold land and building situated at Ranjangaon in Maharashtra was acquired for INR 1.69 billion, which was calculated on the basis of a valuation report from the registered valuer. The leasehold land was registered with the local authority, who valued the leasehold land and building at INR 3.65 billion.

 

A freehold land was also acquired by Britannia Industries for a consideration of INR 135.68 million, whereas the value assessed by the stamp valuation authority was INR 300.03 million. According to the valuation report, the fair market value of the property was INR 127.50 million.

 

The income tax department alleged that the company's income was not properly assessed as the leasehold and freehold properties were received without adequate consideration, so it should be charged for tax under income from other sources. Further, the tax department said that Britannia Industries had claimed excess deduction under Section 43B of the Income Tax Act, 1961.

 

Britannia Industries said it had not gained in any manner whatsoever from valuing the properties at a lower value than the value adopted by the stamp duty authority. The property was valued on a scientific basis after conducting due diligence by a registered valuer, said the company. The property was not fully developed and has uneven surfaces and the assessee had to spend substantial money to set up of a mega industrial unit, it said.

 

The high court, upholding an Income Tax Appellate Tribunal order, had ruled that the assessing officer had taken into account all the factors and had accepted the plea of Britannia Industries and completed the assessment. The Income Tax Act has a provision for disputing the stamp value being taken as the full value of consideration in certain cases, said the court. This is a clear indication that the valuation adopted by the stamp authorities are not always sacrosanct and power has been given for reference to the valuation authority where the assessee would also be entitled to contest such valuation, said the high court.

 

Further, the high court said the jurisdiction was invoked by the Principal Commissioner of Income Tax, Kolkata at the instance of the assessing officer, which was not allowed in such cases under the law. Challenging the high court's order, the income tax department had moved the Supreme Court.

 

At 1509 IST, shares of Britannia Industries were up over 2% at INR 5,821.50 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Ashish Shirke

 

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