Gujarat High Court
Dy. C. I. T vs Jupiter Cement Ind. ... on 25 November, 2014
Author: Ks Jhaveri
Bench: Ks Jhaveri, K.J.Thaker
O/TAXAP/38/2001 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 38 of 2001
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE KS JHAVERI
and
HONOURABLE MR.JUSTICE K.J.THAKER
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1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
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DY. C. I. T.....Appellant(s)
Versus
JUPITER CEMENT IND. LTD.....Opponent(s)
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Appearance:
MR PRANAV G DESAI, ADVOCATE for the Appellant(s) No. 1
RULE SERVED for the Opponent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE KS JHAVERI
and
HONOURABLE MR.JUSTICE K.J.THAKER
Date : 25/11/2014
Page 1 of 6
O/TAXAP/38/2001 JUDGMENT
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE KS JHAVERI)
1. By way of this appeal, the appellantrevenue has challenged the order dated 31.08.2000 passed by the Income Tax Appellate Tribunal, Rajkot Bench [for short "the ITAT"] in ITA No.1524/Ahd/1996, whereby the appeal filed by the revenue was dismissed by the Tribunal.
2. The short facts of this case are that the respondentassessee is a limited Company and engaged in the business of manufacturing of cement. The assessee filed its return of income for the Assessment Year 199495 on 14.11.1994, declaring total income loss of Rs.451.71 Lakhs. While passing the order under Section 143(1)(a) of the Income Tax Act, the Assessing Officer made an addition of Rs.5,12,62,300/ in respect of accrued interest on the term loan from financial institutions, which were debited to the profit and loss account, but were not paid to said financial institutions. The Assessing Officer acting on assessee's letter dated 10.08.1995 rectified the order under Section 143(1)(a) by reducing the disallowance under Section 43B to the extent of Rs.61,04,000/.
2.1. Being aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). The CIT(A) allowed the said appeal of the assessee. Against the Page 2 of 6 O/TAXAP/38/2001 JUDGMENT said order, the revenue has filed an appeal before the ITAT. The ITAT after hearing the parties dismissed the said appeal. Hence, this appeal is filed at the instance of the revenue.
3. While admitting this appeal on 27.02.2001, the Court had formulated the following substantial questions of law: "(A) Whether on the facts and in the circumstances of the case, the Appellate Tribunal has substantially erred in law in confirming the order passed by the CIT(Appeal) admitting additional evidence in contravention of Rule 46A, by directing the Assessing Officer to consider the contents of the alleged letter dated March 19, 1995 and to recompute the additional tax accordingly, without giving any opportunity to the Assessing Officer ?
(B) Whether on the facts and in the circumstances of the case, the appellate Tribunal has substantially erred in law in confirming the order passed by the CIT(Appeal) when the aseesee had filed an application for rectification under Section 154 dated August 10, 1995 wherein no mention of the alleged letter dated March 19, 1995 was made ?"
Page 3 of 6O/TAXAP/38/2001 JUDGMENT
4. Learned advocate for the appellantrevenue has submitted that both the authorities below have committed error in deciding the matter. He further submitted that the ITAT has not properly appreciated the material available on record, therefore, he urged to allow this appeal.
5. On the other hand, learned advocate for the respondentassessee has supported the impugned order of the ITAT and submitted that the view taken by the authorities below is just and proper and no interference is required to be called for by this Court.
6. We have heard learned advocates appearing for both the parties and perused the material on record. The ITAT while deciding the appeal in paragraph No.5 has observed as under: "5. After going through the materials on records and arguments of ld. Departmental Representative we find that Assessing Officer made addition under Section 143(1)
(a) in respect of accrued interest on term loans from financial institutions, which were debited to profit and loss account, but were not paid to said financial institutions. The CIT(A) observed that the letter dated 19.3.95 was not taken into consideration in spite of its service on Assessing Officer. Subsequently, CIT(A) also observed that for want of proper checking of record assessee should not suffer. The CIT(A) was convinced that the said letter was served upon Assessing Officer. The basic of this belief is original postal receipt of Page 4 of 6 O/TAXAP/38/2001 JUDGMENT said UPC letter and its corresponding entry dispatch register of Assessee company. There is no question of entertaining any new evidence as same was already on the record of Assessing Officer. CIT(A) also observed that as per the provisions of Section 139(1) if any person having furnished a return u/s.139(1) discovers any omission or any wrong statement there in, he may furnish a revised return at any time before, expiry of one year, from the end of the relevant Asstt. Years or before completion of assessment order, whichever is earlier. The assessee vide its letter dated 19.03.1995 had duly intimated the Assessing Officer about the wrong statement in original return of income before the intimation under Section 143(1)(a) was passed and had also furnished the revised computation of income with a request to treat the original return, revised to that extent. Under the above mentioned circumstances CIT(A) has rightly directed the Assessing Officer to recompute the additional tax. Accordingly, no intereference is required from our side."
7. In view of the aforesaid, we are in complete agreement with the view taken by the Tribunal. It appears that both the authorities namely the Commissioner of Income Tax as well as the Tribunal have found that the assessee had intimated the Assessing Officer about the wrong statement given by him at the time of filing of the return of income, but the same was not considered by the Assessing Officer.
8. In that view of the matter, we are of the considered opinion that the view taken by the Tribunal is just and proper and we do not find any reason to Page 5 of 6 O/TAXAP/38/2001 JUDGMENT interfere with the findings recorded by the Tribunal. Apart from that, the learned advocate for the appellantrevenue is not in a position to show anything from the record how the findings of the Tribunal is bad in law and on facts. Therefore, the present appeal deserves to be dismissed and the same is accordingly dismissed. The question posed in this appeal is answered in favour of the assessee and against the revenue.
(K.S.JHAVERI, J.) (K.J.THAKER, J) pawan Page 6 of 6