Calcutta High Court
Principal Commissioner Of Income Tax vs M/S. Haldia Petrochemicals Ltd on 10 December, 2019
Author: I. P. Mukerji
Bench: I. P. Mukerji
OD3
ITA No. 152 of 2018
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION (INCOME TAX)
ORIGINAL SIDE
Principal Commissioner of Income Tax, Kolkata - IV
Versus
M/s. Haldia Petrochemicals Ltd.
Before:
The Hon'ble Justice I. P. MUKERJI
And
The Hon'ble Justice MD. NIZAMUDDIN
Date: 10th December 2019
Appearance:
Mr. P. K. Bhowmick, Advocate
Mr. Madhu Jana, Advocate
for the appellant
Mr. J. P. Khaitan, Sr. Advocate
Mr. Saumya Kejriwal, Advocate
Mr. Soumik Ghosh, Advocate
for the revenue
The Court: On 3rd December 2018 this appeal was admitted by this
Court to be heard on two questions of law. Those are as follows:
"(i) Whether under the mercantile system of
accounting customs duty exemption of Rs. 124 crore was
income of the year of incremental growth in FoB value of
exports of the year of receipt of certificate/licence?
(ii) Whether provision for doubtful advances and debts
was allowable deduction under section 115 JB of the
Income Tax Act, 1961?"
As far as the second question is concerned, it is common ground
that the question can be answered in favour of the revenue and against
the assessee by virtue of the retrospective amendment of section 115JB
explanation (1)(i) with effect from 1st April 2001. We answer the question
accordingly.
2
As far as the first question is concerned, under a customs
notification dated 8th April 2005 the goods imported against a duty credit
certificate issued under the target plus scheme in the relevant foreign
trade policy were exempted from duty. This duty credit certificate was
issued to star export house on the basis of incremental growth in FOB
value of exports made during the financial year 2003-2004.
The respondent assessee was following the mercantile system of
accounting. It had accounted for the amount representing the exemption from duty in the accounts of the financial year in which the certificate was issued. This has been disallowed by the income tax authority.
The Assessing Officer, the Commissioner of Income Tax (Appeals) and the tribunal ruled in favour of the assessee.
We find no error in the method of accounting or in the impugned order of the tribunal dated 13th April 2016.
For that reason the appeal with regard to this question is dismissed. The above question is answered in favour of the assessee and against the revenue.
The appeal (ITA No. 152 of 2018) is disposed of in terms of the above order.
(I. P. MUKERJI, J.) (MD. NIZAMUDDIN, J.) R. Bose