Karnataka High Court
The Commissioner Of Income Tax vs M/S Telco Construction Equipment Co. ... on 4 February, 2014
Bench: Dilip B.Bhosale, B.Manohar
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 4th DAY OF FEBURARY 2014
PRESENT
THE HON'BLE MR. JUSTICE DILIP B BHOSALE
AND
THE HON'BLE MR. JUSTICE B MANOHAR
ITA.NO.504/2007 C/W ITA.NO.502/2007
BETWEEN
1. THE COMMISSIONER OF INCOME TAX
C R BUILDING, QUEENS ROAD
BANGALORE
2. THE ASSISTANT COMMISSIONER OF INCOME TAX
CIRCLE 12(3), C R BUILDING, QUEENS ROAD
BANGALORE ... COMMON APPELLANTS
(BY SRI K V ARAVIND, ADV.,)
AND
M/S TELCO CONSTRUCTION EQUIPMENT CO. LTD
NO.45, JUBILEE BUILDING, MUSEUM ROAD
BANGALORE ... COMMON RESPONDENT
(BY SRI S PARTHASARATHI, ADV.,)
THIS ITA.NO.504/2007 FILED U/S.260-A OF I.T.ACT,
1961 ARISING OUT OF ORDER DATED 18-01-2007 PASSED IN
ITA NO. 561/BANG/2005 FOR THE ASSESSMENT YEAR 2001-02,
2
PRAYING THAT THIS HON'BLE COURT MAY BE PLEASED TO:
I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
THEREIN,
II. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY
THE ITAT, BANGALORE IN ITA NO. 561/BANG/2005 DATED 18-
01-2007 AND CONFIRM THE ORDER PASSED BY THE ASST.
COMMISSIONER & INCOME TAX, CIRCLE-12(3), BANGALORE, IN
THE INTEREST OF JUSTICE AND EQUITY.
THIS I.T.A. NO.502/2007 FILED U/S.260-A OF I.T.ACT
1961 ARISING OUT OF ORDER DATED 18-01-2007 PASSED IN
ITA NO. 276/BANG/2005 FOR THE ASSESSMENT YEAR 2000-
2001, PRAYING THAT THIS HON'BLE COURT MAY BE PLEASED
TO:
I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
THEREIN,
II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED
BY THE ITAT, BANGALORE IN ITA NO. 276/BANG/2005 DATED
18-01-2007 AND CONFIRM THE ORDER PASSED BY THE
ASST.COMMISSIONER OF INCOME TAX, CIRCLE-12(3),
BANGALORE, IN THE INTEREST OF JUSTICE AND EQUITY.
THESE ITA's COMING ON FOR HEARING, THIS DAY,
DILIP B. BHOSALE J. DELIVERED THE FOLLOWING:
PC:
These income tax appeals are directed against the
common order dated 18th January 2007 passed by Income
Tax Appellate Tribunal, Bangalore Bench "B" (for short
"the Tribunal") in ITA Nos.276 & 561/Bang/2005 for the
3
assessment years 2000-01 and 2001-02, whereby, the
Tribunal dismissed the appeals filed by the revenue. The
appeals before the Tribunal were preferred against two
separate orders passed by Commissioner of Income Tax
(Appeals)-III, Bangalore (for short "Appellate Authority)
dated 7th December 2004 and 1st February 2005,
respectively in ITA Nos.37/C-12(3)/CIT(A)III/03-04 and
ITA No.23/AC 12(3)/CIT(A)III/04-05, in which two
separate assessment orders passed by the Assessing
Officer (for short "Assessing Officer") dated 23-7-2003 and
27-2-2004 were called in question.
2. In the memorandum of appeals, they have raised
the following substantial questions of law :
1. Whether the Tribunal was correct in
holding that a provision made by the assessee
in respect of mediclaim of Rs.72,11,380/- is an
allowable deduction during the current
assessment year despite the assessment
officer holding that such payments will be
made only on the claim being made under the
4
policy which may happen in any one or the
succeeding assessment years.
2. Whether the Tribunal was correct in
holding that the provision made for warranty
expenses is an allowable deduction even
though the assessing officer had held that the
same will be expended by the assessee only on
the happening of an event like a claim being
made by the assessee's customers and
therefore the same is a contingent liability.
3. Whether the tribunal was correct in
holding that the provision made for doubtful
debts cannot be added back for computing
MAT income as held by the assessing officer
that these debts is a charge to the profits
which get reduced and consequently is an
unascertained liability."
3. Insofar as first two questions are concerned,
learned counsel appearing for the parties state that in view
of the judgment of the Supreme Court in Rotork Controls
India (P) Limited vs. Commissioner of Income Tax
5
(2009) 314 ITR 62, the matter deserves remand with a
direction to the Tribunal to consider these two questions
afresh in the light of the said judgment.
4. We have perused the judgment of the Supreme
Court in Rotork Controls India Ltd (supra) and we are
satisfied that these two questions deserve to be considered
by the Tribunal afresh in the light of the judgment.
5. Insofar as the third question is concerned, learned
counsel for the revenue submitted that Section 115JA has
been amended vide Finance Act, 2009 with effect from
1-4-1998 and the amendment may have some bearing on
the decision of the third question also. Learned Counsel
for the respondent-assessee does not dispute the
statement made by the learned counsel for the revenue
and he also agreed for remanding the matter for deciding
the third question also to the Tribunal in the light of the
amendment. In the circumstances, we pass the following:
6
ORDER
The order passed by the Tribunal dated 18th January 2007 in ITA No.276 and 561/2005 for the assessment years 2000-01 and 2001-02 is set-aside insofar as these three questions are concerned. Rest of the order passed by the Tribunal shall remain unaltered. The Tribunal shall consider all the three questions afresh and decide them on merits and in accordance with law, as expeditiously as possible and preferably within a period of six months from the date of receipt of this order. All contentions of parties are kept open.
With these observations, the appeals are disposed of.
Sd/-
JUDGE Sd/-
JUDGE Ia