Madras High Court
Shriram Transport Finance Co. Ltd. vs Assistant Commissioner Of Income Tax on 31 July, 1998
Equivalent citations: [2000]70ITD406(MAD)
ORDER
P.S. Kalsian, A.M. This Miscellaneous Petition is filed by the assessee in respect of the order of the Tribunal dated 29-4-1997 in ITA No. 572/Mds/ 96 requesting to recall the said order passed by the Tribunal in the above appeal.
2. The Tribunal had earlier decided the issue regarding allowance of depreciation in the case of Shriram Investments Ltd. on 31-5-1996 in ITA Nos. 156,1760,1761 and 2100/Mds/95 [reported in Shriram Investments Ltd. v. Asst. CIT (1996) 59 ITD 570 (Mad)]. While passing the appellate order in the case of the assessee on 29-4-1997 the Tribunal did not follow its earlier decision in Shriram Investments case because there was a decision of the Tribunal, A-Bench, Hyderabad in the case of Pennar Steels Ltd. v. Dy. CIT (1997) 60 ITD 1 (Hyd-Trib) and also a decision of the Andhra Pradesh High Court in Suryalatha Spg. Mills Ltd. v. UOI (1997) 223 ITR 71 (AP), which considered the provisions of section 115J of the Income Tax Act, 1961. After considering those decisions this Tribunal while deciding the appeals in the assessee's case on 29-4-1997 did not follow its earlier decision rendered in the case of Shriram Invesments Ltd. (supra). A Misc. Petition has been filed by the assessee for rectification of the order dated 29-4-1997 of the Tribunal.
3.1 It is argued by the assessee's counsel in the present proceedings that the assessee's appeal should have been allowed following the decision rendered in the case of Shriram Investments Ltd. (supra). It is further argued that the order of the Hyderabad Bench of the Tribunal reported in Pennar Steels Ltd.'s case (supra) and the Andhra Pradesh High Court's decision reported in Suryalatha Spg. Mills Ltd.'s case (supra) relied upon by the Tribunal in rejecting the assessee's claim were not put to the notice of the assessee's counsel thereby denying opportunity to the assessee's counsel to make submissions in respect of those decisions and to come to a conscious conclusion that to the extent of difference between depreciation debited in the books of account and depreciation to which the assessee is actually entitled, cannot be considered as actually allowed within the meaning of the definition of the words actually allowed vide sections 43(1) and 43(6) of the Income Tax Act. According to the learned counsel the decision of the Andhra Pradesh High Court in Suryalatha Investments Ltd.'s case (supra) followed by the Tribunal in deciding the assessee's appeal has no bearing on the issues involved therein. The decision of the Tribunal in the case of Shriram Investments Ltd. (supra) rested on the scope of the words `actually allowed' rather than the juristic concept of parallel assessment under section 115J as has been noticed by their Lordships of the A.P. High Court. Significantly, the prayer in the said A. P. High Court decision was to carry forward and adjust the section 115J profit in the assessment for the subsequent year, which was not the case or the prayer canvassed in the case of the present assessee. It is, therefore, contended that by any stretch of imagination it cannot be urged even remotely that the said A.P. High Court decision concluded the issue that came up for adjudication in the assessee's case herein. According to the Iearned counsel if the decisions of the A.P. High Court Suryalatha Spg. Mills Ltd.'s case (supra) and the Hyderabad Bench of the Tribunal Pennar Steels Ltd.s case (supra) are eschewed or eliminated from the field, then what remains in the decision of the Madras Tribunal in the case of Shriram Investments Ltd. (supra) which proceeded to grant relief to the assessee, following the Supreme Court's decision rendered in Madeva Upendra Sinai v. UOI (1975) 98 ITR 209 (SC).
3.2 The learned counsel submitted that in the present case, if an opportunity had been given he could have pointed out that the decisions rendered by the A.P. High Court and the Hyderabad Bench of the Tribunal are not opposite to the facts in issue and he would have also brought to the notice of the Tribunal the. established position that the Tribunal functioning under the jurisdiction of Madras High Court should follow the ratio of the decision rendered in CIT v. L. G. Ramamurthi (1977) 110 ITR 453 (Mad) and referred the matter to the President for constituting a Full Bench, rather than dissenting with a co-ordinate Bench. The learned counsel stated that as per the decision in L.G. Ramamurth's case (supra), the prohibition against differing from a co-ordinate Bench is absolute and the Hon'ble Madras High Court had not provided any exceptions. According to the learned counsel for the assessee, the decision of the Madras High Court in L.G. Ramamurthi's case (supra) has not only not been overruled by the Supreme Court but it is in conformity with the Supreme Court's decisions in Raghavamma v. Chenchamma AIR 1962 SC 136 and ACED v. V. Devaki Ammal (1995) 212 ITR 395 (SC). The learned counsel also referred to the decision of the Supreme Court in the case of CIT v. Posetty & Co. (1996) 220 ITR 216 (SC) and the decision of the Patna High Court in Gajendra Narain v. CIT (1997) 225 ITR 932 (Pat). Our attention was also invited to the specific provision contained in the Civil Rules of Practice.
3.3 It is further argued by the Id. counsel that since the decision the A. P. High Court in Suryalatha Spg. Mills Ltd.s case (supra) was not brought to his notice, the order passed by the Tribunal on 29-4-1997 in the present assessee's case is an ex parte order denying opportunity to him to make submissions in respect of the said judgment of the A.P. High Court as also the decision of the Hyderabad Bench of the Tribunal in Pennar Steel, Ltd.'s case (supra). It is further submitted that in the instant case the decision of the Tribunal to follow the A.P High Court judgment to differ from a co-ordinate Bench of the Tribunal, Madras is an ex parte award, and the learned counsel therefore, argued that the following errors were committed by the Tribunal:
(a) The Tribunal committed errors in not following the decision in the case of Shriram Investments Ltd. (supra). As the decision is against the mandate of the Madras High Court rendered in L.G. Ramamurthi's case (supra) especially when, where the case was taken up for hearing it was agreed that the assessee's appeal should be allowed following the decision rendered in the case of Shriram Investments Ltd. (supra).
(b) The Tribunal committed an error in law in following the A.P. High Court's decision and the order of' the Hyderabad Bench of the Tribunal in Pennar Steels Ltd.'s case (supra), especially when on merits they do not in any way, decide the issues decided by the Tribunal, Madras Bench in the case of Shriram Investment. Ltd. (supra).
(c) The Tribunal erred in taking unilateral decision to differ from an earlier co-ordinate Bench judgment without inviting arguments from the contesting parties about the desirability or otherwise of' differing from an earlier decision of the co-ordinate Bench.
(d) The Tribunal erred in law in not following the principles of natural justice by denying opportunity to the assessee's counsel to make submissions in respect of the A.P. High Court's decision and the order of the Hyderabad Bench of the Tribunal relied on by it.
4.1 The learned Departmental Representative, on the other hand, stated that there was no agreement that assessee's appeal would be allowed following the decisions rendered in the case of Shriram Investments Ltd. (supra). It is stated by the learned Departmental Representative that at the time of hearing the appeal of the assessee herein the arguments of the standing counsel in the case of Shriram Investment Ltd. (supra) were relied upon by the Departmental Representative and hence, there was no questions of any agreement. According to the learned Deparmental Representative there is no error apparent from record in following the decision of the A. P. High Court in Suryalatha Spg. Mills. Ltd. case (supra) against the decision of the Tribunal in the case of Shriram Investments Ltd. (supra). There is no error in law in following the said A. P. High Court's decision. Even if it is error in law then only a reference application would lie and the order of the Tribunal in the assessee's case cannot be rectified.
4.2 The learned Departmental Representative referred to the decision of the Madras High Court in the case of L.G. Ramamurthi (supra) and pointed out that in that case the Tribunal gave a finding in assessment year 1958-59 that the so called gifts were not really gifts and interest on gifted amount was included in the hands of the donor. Such a finding of the Tribunal was confirmed by the Hon'ble Madras High Court. Those findings were controverted by the Tribunal in subsequent years 1961-62 and 1962-63. The issue involved in that case was whether the gifts were real or sham which was only question of fact. In the assessment year 1958-59 the Tribunal had held that gifts were sham, but subsequently in the assessment years 1961-62 and 1962-63 the Tribunal on the same facts came to the conclusion that gifts were real. It was in this background that the Hon'ble High Court observed that no Tribunal of fact has any right or jurisdiction to come to a conclusion entirely contrary to the one reached by another Bench of the same Tribunal on the same facts. According to the learned Deparmental Representative, the Andhra Pradesh High Court in the aforesaid case- Suryalatha Spg. Mills Ltd. has referred to facts by interpreting the provisions of section 115J(1) and (2). The learned Departmental Representative also pointed out that sub-section (2) of section 115J is to enable the assessee to carry forward unabsorbed depreciation under section 32(2), otherwise when income is assessed under section 115J there is no reason to carry forward depreciation and loss. Reliance was placed on the decision of the Supreme Court in the case of Asstt. Collector of Central Excise v. Dunlop India Ltd. (1985) 154 ITR 172 (SC) in connection with the applicability of the decision of the A. P. High Court (supra). It is pointed out by the learned Departmental Representative that better wisdom of High Court should prevail over the wisdom of lower court. According to the learned Departmental Representative the Andhra Pradesh High Court's decision in Suryalatha Spg. Mills Ltd.'s case (supra) is the only decision of the said Court which explains the provisions of section 115J. He also referred to the decision of the Mumbai High Court; in the case of CIT v. Smt. Godavari Devi Saraf (1978) 113 ITR 589 (Mum) to emphasis the importance of a decision of the High Court. It is pointed out that if the legislature wilfully (sic-ignore) or miss to incorporate a particular provision on a particular issue, then the court is not competent to supply and incorporate the provision in the statute. The learned Departmental Representative referred to the provisions of section 115J which start with non-obstante clause and argued that loss or depreciation can be carried forward only under the normal provisions of the Act.
4.3 The learned Departmental Representative further referred to the decision of the Mumbai Bench of the Tribunal in the case of Virendra & Co. v. Asstt. CIT (1997) 60 lTD 463 and decision of the Supreme Court in the case of Kapurchand Shrimal v. CIT (1981) 131 ITR 451 (SC). The learned Departmental Representative pointed out that in the case of Shriram Investments Ltd., (supra), the Tribunal had not considered the question whether depreciation of earlier years could be allowed in later years and therefore, that decision has no relation to the assessment year under consideration in the case of the assessee as no appeal on this issue is pending for decision for earlier years. The issue considered by the Tribunal in the assessee's case vide order dated 29-4-1997 was not considered by the Tribunal in its earlier decision in the case of Shriram Investments Ltd. (supra). According to the learned Departmental Representative no wrong has been committed by the Tribunal in not following the earlier order in the case of Shriram Investments Ltd. (supra) and there is no mistake apparent from the record by considering the Andhra Pradesh High Court's decision in Suryalatha Spg. Mills Ltd.'s case (supra). The learned Departmental Representative stated that the Tribunal has considered the fresh issues in the case of the assessee which were not considered by the earlier Bench in the case of Shriram Investments Ltd. (supra) and reasons for arriving at the conclusion have been given by the Tribunal. Even if the Andhra Pradesh High Court's decision was not argued there is no mistake in the Tribunal's order which would be rectified now.
5.1 The learned counsel for the assessee, in reply, stated that the decision of the Madras High Court in L.G. Ramamurthi's case (supra) is binding and the observations of the Tribunal that latter Bench of the Tribunal should follow the decision of earlier Bench on an identical issue is the very ratio decidendi in that case. He relied on the Supreme Court's decision in the case of V. Devaki Ammal (supra) and contended that the matter is settled by the said decision. Reliance was also placed on the decision of the Supreme Court in B. Posetty & Co.'s case (supra). It was further stressed that the A. P. High Court's decision in Suryalatha Spg. Mills Ltd.'s case (supra) was not called upon to decide the issue considered in the case of Shriram Investments Ltd.'s case (supra). It is submitted that in Shriram lnvestments Ltd.s case (supra) the scope of section 43(6) was considered with reference to the decision of the Supreme Court rendered in the case of' Madeva Upendra Sinai (supra). The learned counsel also referred to the decision of the Supreme Court in the case of Gurupad Khandappa Magdum v. Hirabai Khandappa Magdum (1981) 129 ITR 440 (SC).
5.2 According to the Id. counsel if the Legislature had really wanted to deprive the difference between book depreciation and income-tax depreciation, it would have provided a clause like 44AD(3), etc. The decision of the Tribunal in the case of Shriram Investments Ltd. (supra) rested on two aspects, viz. on the scope of section 43(6) and the Supreme Court's decision in Madeva Upendra Sinai's case (supra) and the absence of a provision like section 44AD(3). It is contended that these two aspects have not been touched by the A.P. High Court in its decision reported in Suryalatha Spg. Mills. Ltd.'s case (supra) as they did not arise for consideration.
6. We have considered the rival submissions, facts of the case and material on record. The arguments of the learned counsel for the assessee lay emphasis on the fact that the Tribunal committed error in not following its earlier decision in the case of Shriram Investments Ltd. (supra). According to the learned counsel, the subsequent decision of' the Tribunal in the assessee's case dt. 29-4-1997 is against the mandate of Madras High Court rendered in the case of L. G. Ramamurthy (supra). At this juncture it is considered necessary to refer to the said decision of the Hon'ble Madras High Court. The facts of that case are briefly as follows :
6.1 There were four brothers by name L. G. Balakrishnan, L. G. Varadarajulu, L.G. Ramamurthy and L.G. Nityanand and they constituted a partnership firm, viz.,.L. G. Balakrishnan & Bros. In the accounting year ended 31-3-1958 relevant to the assessment year 1958-59 the Income Tax Officer found certain deposits in the books of the firm, L.G. Balakrishnan & Bros. and those deposits were made by debiting the capital account of partners and crediting the account of the minor children. The firm paid interest on these credits to the respective persons in whose name the amount was credited. In the assessment proceedings for assessment year 1958-59, the Income Tax Officer considered these gifts to be really in the nature of (sic) and he was of the opinion that though there were no direct transfers of assets by the father to the minor children these transactions amounted to indirect transfer within the meaning of the said expression in section 16(3)(a)(iv) of the Indian Income Tax Act, 1922. He, therefore, included the interest on the sum of Rs. 50,000 (credited in the name of each donee) in the respective assessments of the three persons who figured as donors. In appeal, the Appellate Assistant Commissioner held that the process of gifting had been so devised as to circumvent the provisions of section 16(3)(a)(iv) of the 1922 Act and that the inclusion was justified. In assessee's further appeal, the Tribunal also affirmed the inclusion. When the matter was taken up to the Hon'ble Madras High Court on a reference by L. G. Balakrishnan, in their judgment reported in L. G. Balakrishnan v. CIT (1963) 49 ITR 102 (Mad) the Hon'ble Madras High Court observed at page 106 as under :
"The finding of the department as well as of the Tribunal is that there was an indirect transfer of assets by L.G. Balakrishnan to his minor son, Vijaya Kumar. This is certainly based on the evidence on record and it seems to us that this finding is fully justified and warranted."
6.2 Subsequently, two other debit and credit entries of Rs. 75,000 and Rs. 1,00,000 were found by the Income Tax Officer on 24-3-1959 and 30-4-59 respective for the assessment years 1959-60 and 1960-61. In addition to the inclusion of the interest already referred to above, interest on these further amounts were also included. The assessment for assessment year 1959-60, in the case of others it was in the status of HUF. In the appeals preferred by these persons before the Appellate Assistant Commissioner it was held that the gifts were merely cross-gifts and that the Income Tax Officer was justified in including the income derived from the assets so transferred under section 16(3)(a)(iv). However, on further appeal before the Tribunal it was contended that in all these cases except one, the assessments had been made in the status of HUF and, that therefore, the provisions of section 16(3)(a)(iv) could not be applied. The Tribunal accepted this contention of the assessee and observed that the inclusion of the interest from assets transferred by the individuals with that of the HUF is not justified.
6.3 When the assessment proceedings for assessment years 1961-62 and 1962-63 were taken up, the Income Tax Officer took the view that the gifts themselves were not real and that they were only sham. Consequently, he assessed the interest referable thereto only in the hands of the HUFs. The assessee took the matter on appeal to the Appellate Assistant Commissioner, who relying on the immediately preceding decision of the Tribunal, directed the deletion of interest referable to those amounts. The department preferred appeals to the Tribunal and the Tribunal allowed the appeals, holding that the gifts were sham and that the funds which earned interest really belonged to the family and, therefore, the Income Tax Officer was justified in including such interest in the income of the respective families.
6.4 For the assessment year 1963-64 the Income Tax Officer included the interest income referable to the amounts gifted in each case in the assessment of the respective HUFs following the order of the Tribunal for the assessment years 1961-62 and 1962-63. On appeal, the Appellate Assistant Commissioner confirmed the order of the Income Tax Officer in that behalf. On further appeal by the assessee, the Tribunal held that the gifts were real, that the gifts having been made by the HUFs, section 16(3)(a)(iv) of the 1922 Act was not attracted and, that, therefore, the order of the Appellate Assistant Commissioner was not right, with the result the appeals were allowed by the Tribunal. It is the correctness of this conclusion of the Tribunal that was challenged by the Revenue in the form of the questions extracted at page 455 of 110 ITR. First question relates to the issue whether the income attributable to cross-gifts is not assessable in the hands of the donors? Second issue was whether the Tribunal was right in refusing to entertain and adjudicate upon the contention of' the department that alleged gifts were void in law. The issue, therefore, before their Lordships was whether the income attributable to cross-gifts was not assessable in the hands of the donor; and whether, the Tribunal was right in refusing to entertain and adjudicate upon the contention of the department that the alleged gifts were void in law.
6.5 The Tribunal had already, held in respect of the assessment years 1961-62 and 1962-63 that gifts were sham and not real. The matter, was brought to the Hon'ble Madras High Court in the form of a reference application L. G. Ramamurthy v. CIT (1970) 1 ITJ 740 (Mad-Trib). It was observed by the Hon'ble Madras High Court in L.G. Ramamurthy's case (supra) that funnelling back of the assets into the joint family, though ostensibly through the minor, is absolutely an artificial transaction made will the intent to avoid tax and is, therefore, bound to be characterised as a sham one which need not be taken notice of by the Revenue. While deciding the issue in appeal for assessment year 1963-64, these observations made by the Hon'ble Madras High Court were taken as casual observations by the Tribunal. In this context their Lordships at page 462 of 110 ITR pointed out that the Tribunal committed a clear error in law in ignoring the conclusion of the High Court in respect of the identical transaction with reference to earlier assessment year. It was also pointed out at page 467of 110 ITR that nowhere the Tribunal had stated that it was relying on a particular fact which was not before it on the earlier occasion and which was overlooked and that if it was taken into consideration by the Tribunal on the earlier occasion, the conclusion itself would have been different. In fact, it was pointed out by the Hon'ble High Court at page 467 (110 ITR) that "apart from this one sentence, we are not able to discover any other reason given by the Tribunal for, taking a view totally different from and entirely opposed to the view which was previously taken by the Tribunal." Therefore, whole reading of the decision of the Hon'ble Madras High Court in L.G. Ramamurthy's case (supra) reveals two facts:
no reason was given by the Tribunal in assessment year 1963-64 for taking a view totally different from and entirely opposed view taken by it earlier in assessment years 1961-62 and 1962-63; and the Tribunal has nowhere stated that it was relying on a particular fact which was not before it on the earlier occasion and which was overlooked by the Tribunal and that if it was taken into consideration by the Tribunal on the earlier occasion, the conclusion itself would have been different.
In this background their Lordships held that the Tribunal completely erred in coming to the conclusion it did, at variance with and opposed to the conclusion of the Tribunal on the earlier occasion, in assessment years 1961-62 and 1962-63, viz that the gifts in the present cases constituted real gifts and not sham ones.
6.6 Before considering the binding nature of precedents, we consider it desirable to refer to the decision of the Hon'ble Supreme Court in the case of CIT v. Sun Engg. Works (P) Ltd. (1992) 198 ITR 297 (SC). In that case their Lordships of the Supreme Court held as under at page 320 of 198 ITR (SC):
'It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, courts must carefully try to ascertain the true principle down by the decision of this court and not to pick in the words or sentences from the judgment, divorced from the context of the questions under consideration by this court, to support their reasonings. . .."
6.7 The apex court in the case of Sun Engg. Works (P) Ltd. (supra) has already held, that it is neither desirable nor permissible to pick out a word or sentences from the judgment of the court divorced from the context of the question under consideration and treat it to be the complete law declared by the court. It was also held that the judgment must be read as a whole and the observations from the judgment have to be considered in the light of the question which were before the court.
6.8 After reading the judgment of the Hon'ble Madras High Court in the case of L.G. Ramamurthy (supra) we are of the opinion that there is no substance in the arguments of the learned counsel for the assessee that as per the said decision the prohibition against differing from a co-ordinate Bench is absolute. The learned Counsel has not read the decision as a whole, but he picked up some words or sentences from the judgment and raised the arguments which are totally divorced from the context of the question which was under consideration before the Hon'ble Madras High Court in L.G. Ramamurthi's case (supra). There can be no doubt that even the observation of the jurisdictional High Court may be binding on the Tribunal if the facts and circumstances of the case are identical and similar before the Tribunal as they were in the case of L. G. Ramamurthy (supra). As already mentioned, in that case no reasons were given by the Tribunal in assessment year 1963-64 for taking a totally different and entirely opposed view from the view taken by it earlier in assessment years 1961-62 and 1962-63 which was confirmed by the Hon'ble High Court. The Tribunal nowhere stated that it was relying on a particular fact which was not before it on the earlier occasions and which was overlooked by it. In our humble, opinion the net effect of the said decision of the Hon'ble Madras High Court was that if the facts and circumstances are identical and similar in the case of the same assessee then the Tribunal should not without reason take a totally different and entirely opposed view taken by it in the case of the same assessee on same facts in earlier years.
6.9 In this connection we may also refer to the decision of the Hon'ble Supreme Court in the case of CIT v. Brij Lal Lohia & Mahabir Prasad Khemka (1972) 84 ITR 273 (SC). The brief facts in this case were that (the assessee, a dealer in jute, had claimed that he had made a gift of Rs. 5,11,101 to his brother Brijlal Lohia and another sum of Rs. 2,50,000 to his nephew, Nand Kishore Lohia. Thereafter they (donces) started a new firm dealing in jute and at about the same time the assessee stopped his business. On the basis of the material then before it, the Tribunal did not accept that the gifts were genuine, for the assessment years 1945-46 and 1946-47, and ultimately the Supreme Court refused to interfere with that finding- Kanhaiyalal Lohia v. CIT (1962) 44 ITR 405. In the years 1947-48 to 1951-52, considerable additional evidence was adduced and the Tribunal, after taking into consideration the decision rendered ill the earlier proceedings, came to the conclusion that the. gifts were genuine. The various circumstances mentioned in this case - Brij Lal Lohia & Mahabir Prasad Khemka (supra) were taken into consideration by the Tribunal subsequently which were not before it in earlier proceedings. The Hon'ble Supreme Court held that the circumstances taken into consideration by the Tribunal subsequently could not be said to be irrelevant and the finding of the Tribunal was not perverse. The finding being one of fact it is not open to the High Court or Supreme Court to interefere with it. The Supreme Court further held that the fact that in earlier proceedings the Tribunal took a different view of the two gifts was not a conclusive circumstances; the decision of the Tribunal reached in those proceedings did not operate as res judicata, there was a great deal more evidence before the Tribunal in the proceedings for the subsequent years.
7.1 After taking into consideration the aforesaid judgment of the Hon'ble Supreme Court and the decision of the Madras High Court in L. G. Ramamurthy's case (supra), we are of the well considered opinion that the principle of res judicata is strictly not applicable if there are facts and circumstances or material to justify a different decision by the subsequent Bench of the Tribunal from the earlier decision of the Tribunal or there is relevant material before the Tribunal even in the case of the same assessee on the same issue which persuade the Tribunal to come to a different decision.
7.2 The learned counsel for the assessee has referred to the decision of the Patna High Court in the case of Gajendra Narayan (supra). In this case, the Hon'ble Patna High Court considered it only proper to repost the case for hearing for further arguments after they came to a fresh conclusion that the conclusions indicated by them at the end of the arguments in the open Court required reconsideration. In this case, the principle of res judicata was not involved. On the other hand, in the case of Jhaverbhai Patel v. CIT (1976) 103 ITR 728, the Hon'ble Patna High Court held that "the doctrine of res judicata does not apply to income-tax proceedings. The fact that in an earlier proceeding the Tribunal took a different view of the gifts, was not a conclusive circumstance and the decision of the Tribunal reached in those proceedings did not operate as res judicata" Similarly, in the case of Namadang Tea Co. Ltd. v. CIT (1982) 138 ITR 326 (Cal), the Hon'ble Calcutta High Court held that "on the question of principle of law, one Tribunal is not bound by the decision of another Tribunal. It is well settled that the decision of air Income Tax Officer or Tribunal in regard to a particular year does not operate as res judicata for the subsequent year. If the assessee was aggrieved, it could have challenged the decision of the Tribunal on a reference to the High Court. Therefore, the assessee could not reply upon the decision of the Tribunal relating to the assessment year 1968-69, for the assessment year 1967-68."
8.The Hon'ble Supreme Court in a recent judgment in the case of Secretary, Jaipur Development Authority v. Daulat Mal Jain (1997) 1 SCC 35 at p. 50, par 24 has observed that :
"If Some persons derived benefit by and had escaped from the clutches of law, similar persons cannot plead, nor the court can countenant that benefit had from infraction of law and must be allowed to be retained. Can one illegality be compounded by permitting similar illegal or illegitimate or ultra vires acts ? Answer is obviously no."
The apex court in the well-known case of Yadu Nandan Garg. v. State of Rajasthan (1996) 1 SCC 334 at page 356 has observed that :
"The wrong exemption under wrong action taken by the authorities will not clothe others to get the same benefit nor can Article 14 be pressed into service on the ground of invidious discrimination."
On the same lines were the observations of their Lordships of the Supreme Court in the case of Chandigarh Administration v. Jagjit Singh (1995) 1 SCC 745 (SC). In Coromandel Fertilisers v. UOI (1984) SCC (Tax) 225, it was held in para 13:
"Wrong decision in favour of any party does not entitle any other party to claim the benefit on the basis of the wrong decision. In that case, one of the items was excluded front the Schedule, by wrong decision, from its purview. It was contended that authorities could not deny benefit to the appellant, since he stook on the same footing with the excluded company. Article 14, therefore, was pressed into service. This court had held that even if the grievance of the appellant was well founded, it did not entitle the appellant to claim the benefit of the notification. A wrong decision in favour of any particular party does not entitle another party to claim the benefit on the basis of a wrong decision. Therefore, the claim for exemption on the anvil of article 14 was rejected."
In view of the authoritative pronouncement of the Hon'ble Supreme Court cited supra, it is abundantly clear that the principles of res judicata are not applicable in tax proceedings and no person can derive any benefit or advantage from the decision which is not based on the correct statutory provision.
9. Now the question arises whether, there was material before the Tribunal in this case of the assessee and whether, the Tribunal committed an error in not following the decision in the case of Shriram Investments Ltd. (supra). We have considered the said decision of the Tribunal which was relied on by the learned counsel for the assessee at the time of hearing of the appeal, We. have also considered the decision of the Hyderabad Bench of the Tribunal in the case of Pennar Steels Ltd's case (supra) regarding interpretation of 115J and the judgment of the Hon'ble A. P. High Court in Suryalatha Spg. Mills. Ltd.'s case (supra). According to the learned counsel, these decisions do not deal with the issue of written down value and determination of actual cost of assets to the assessee. Even assuming so, without admitting, we find that both the above decision deal with nature of assessment under section 143(3) (sic) and nature of tax levied on the deemed total income under section 115J(1). The determination of actual cost of an asset under section 32 read with section 43(3). Therefore, even if these decisions do not deal directly with the determination of actual cost of asset, they have direct bearing on the issue regarding deduction of depreciation and determination of W. D. V. while completing the assessment under section 143(3) of the Act. Determination of actual cost of W. D. V. of the assets is a part of assessment proceedings. Therefore, we do not appreciate the argument of the assessee's counsel that these two decisions do not deal with determination of actual cost or W. D. V. or deduction of depreciation of assets, while completing the assessment under section 143(3).
10. Briefly stated, in the case of Pennar Steels Ltd. (supra), A Bench of the Hyderabad Tribunal had clearly held that under section 115J if the income computed under the normal provision is found to be less than 30 per cent of the profit disclosed in assessee's profit and loss account, then the latter is deemed as its total income for charging tax under section 115J. There is no provision to go back to compute the total income and reduce the said 30 per cent of book profit from any income before depreciation and then consider the allowability of depreciation. On the contrary, from sub-section (2) of section 115J it would be obvious that right of assessee to carry forward unabsorbed depreciation, loss, etc., is not to be affected by provisions of section 115J(1). This means that right to carry forward and the amount to be carried forward is to be de hors the provisions of section 115J(1) and is to be determined before the applicability of the provisions of section 115J(1) is seen. In that case it was argued before the Tribunal that the assessee's right to carry forward was affected in the sense that when a part of income was assessed to tax by virtue of provisions of section 115J(1) and that part was set off against depreciation, it reduced the assessee's right to depreciation to that extent and that it amounted to double taxation. This argument was not accepted by the Tribunal. It was held by the Tribunal in that case that what section 115J(2) means is that the provisions should not come in assessee's way to get the right to carry forward and set off.
11. The assessee has right to carry forward the unabsorbed depreciation, if any, under section 32(2) of the Income Tax Act when assessment is made under section 143. The Hyderabad Bench `A' of the Tribunal in Pennar Steels Ltd.'s case (supra) at page 6 held as under:
"On a bare reading of this section, it is evident that to deem 30 per cent of book profits as income of an assessee, one has to mill through the income under the normal provisions. If the income so computed is found to be less than 30 per cent of the profit disclosed in the assessee's profit and loss account (book profit), then alone the latter is deemed as its total income. There is no provision to go back to compute the total income and reduce the said 30 per cent of book profit from any income before depreciation and then consider the allowability of depreciation. On the contrary, if we read sub-section (2) of section 115J, it would be obvious that the right of the assessee to carry forward unabsorbed depreciation, loss, etc., is not to be affected by the provisions of section 115J(1). This, in our opinion, means that the right to carry forward and the amount to be carried forward is to be de hors the provisions of section 115J and is determined before one comes to see the applicability of the provisions of section 115J."
Under the scheme of Income Tax Act, the decision make clear that allowance of depreciation under section 32 is to be considered only while completing the assessment under section 143(3) and once the depreciation is allowed on asset, while completing the assessment, then there is no provision to go back to earlier years for determining actual cost or W.D.V. of assets other than that determined in assessment under section 143(3) of the relevant assessment year.
12. Similarly, in the case of Suryalatha Spg. Mills Ltd. (supra) it was held by their Lordships of the Andhra Pradesh High Court that the object of insertion of section 115J was to ensure levy of minimum tax on what are known as "prosperous zero tax companies". Under the scheme of the section, which is a self-contained provision, where the total income of companies as computed under the provisions of the Income Tax Act, in respect of the previous year, relevant to the assessment year after 1-4-1988 is less than 30 per cent of their book profits, the total income of such companies charged to income-tax for the relevant previous year is treated as income equal to 30 per cent of such book profits and is taxed accordingly. Their Lordships of the A.P. High Court further pointed out that this provision involves two processes. First, the assessing authority has to determine the income of the company under the provisions of the Income Tax Act and, secondly, the book profit has to be worked out in accordance with the Explanation below section 115J(1A), then it will have to be seen whether the total income determined under the first process is less than 30 per cent of the book profit; if so, sub-section (1) would be invoked and the total income of such company chargeable to income-tax for the relevant previous years shall be equal to 30 per cent of such book profit. It was further pointed out that sub-section (2) of section 115J cannot be interpreted to permit the assessee-company where its notional income has been taxed under section 115J(1) to carry forward unabsorbed loss or unadjusted allowances of an amount equal to the taxed income. Since sub-section (2) of section 115J is a saving provision and does not confer any further right, the amount of income arrived at for the purpose of exibility of income-tax under sub-section (1) of section 115J cannot be taken note of, while considering the question of carrying forward of unadjusted loss. It is further pointed out that if any loss equal to the income thus determined is allowed to be adjusted, that would frustrate and nullify the very object is further pointed out thal if any loss equal to the income thus determined is allowed to be adjusted, that and nullify, the very object of enacting the provisions. In that case the Hon'ble A.P. High Court also held as under:
"From a plain reading of sub-section (2) of section 115J, it is clear that the quantum of unabsorbed losses, unadjusted depreciation, etc., for the purposes of carrying forward has to be under the provisions of' the Act, irrespective of the quantum of income determined under the provisions of sub-section (1) of section 115J. There would be no scope for the Revenue to contend that in view of the provision of sub-section (1), the unabsorbed depreciation allowance, unadjusted loss or deficiency, etc. as the case may be, can no longer be carried forward to the subsequent year or years. On the determination of the taxable income, under the relevant provisions of the Act, whatever amounts rental to be carried forward under the regular computation, either by way of unabsorbed losses or unadjusted allowances have to be carried forward to the next year ignoring the fact that a notional income is made taxable under sub-section (1) of section 115J." [Emphasis supplied] The aforesaid judgment of the Hon'ble A.P. High Court in the case of Suryalatha Spg. Mills Ltd. (supra) clarified the following legal position :
the provisions of section 115J involve two processes. First process is that the assessing authority has to determine the total income of the company under the provisions of the Income Tax Act relating to regular computation of income. These provisions are contained in sections 22 to 27 (income from house property), sections 28 to 44D (profits and gains of business or profession), sections 45 to 55A (capital gains), sections 56 to 59 (income from other sources), sections 66 to 80 (aggregation of income and set off of carry forward loss) and Chapter VI-A (deductions to be made in computing the total income).
the book profit had to be worked out in accordance with the Explanation below section 115J(1A).
The assessing officer will have to see whether the total income determined under the first process is less than 30 per cent of the book profit and if so, 30 per cent of such book profit of such a company shall be deemed to be total income and chargeable to income-tax under sub-section (1) of section 115J.
quantum of income determined under the provisions of sub-section (1) of section 115J will not 'be considered for the purpose of determining unadjusted depreciation, unabsorbed loss, etc. mentioned in section 115J.
Under section 115J(1) only notional or deemed income is determined and taxed.
for, the purpose of determining the total taxable income under the provisions of the Income Tax Act by way of regular computation all the deductions for expenditure incurred for the purpose of business and other allowances, including depreciation allowance have to be allowed or adjusted.
unabsorbed loss, unadjusted depreciation, etc., for the purpose of carrying forward has to be determined under the provisions of the Act while completing assessment under section 143(1) or under section 143(3) and such unabsorbed loss, unadjusted depreciation, etc., to be carried forward in view of the provisions of section 11 5J(2).
13. Pursuant to the provision of the Income Tax Act relating to regular computation of income, the assessing officer has allowed depreciation of Rs. 96,81,253 to the assessee before us out of the taxable income under section 143(3) in assessment year 1992-93. The assessing officer has also allowed deduction of depreciation loss of Rs. 1,22,45,555 for assessment years 1989-90 to 1991-92 out of the taxable income. There is no charging of tax on deemed total income for- assessment year 1992-93 under section 115J(1) of the Act. In earlier assessment years i.e. 1989-90, 1990-91 and 1991-92 the assessing officer has considered the deduction for depreciation allowance and whatever depreciation was not adjusted against the taxable income, the same was allowed to be carried forward as unabsorbed depreciation under section 32(2). The order of the assessing officer determining the unabsorbed depreciation and W.D.V. of all the assets was not contested by the assessee in appeal before the appellate authority in assessment years 1989-90 to 1991-92, and the assessee accepted the decision of the assessing officer determining the W.D.V of assets and carry forward of unabsorbed depreciation. There is no provision in the whole of the Income Tax Act to go back and again determine the actual cost of the assets or W.D.V for assessment years 1989-90, 1990-91 and 1991-92 as claimed by the assessee. Deduction for depreciation and determination of W.D.V. of assets by the assessing officer is correct in assessment years 1989-90 to 1991-92 and has been allowed while completing the assessment under section 143(3). Therefore, the claim of the assessee is totally illegal.
14.If we examine the ratio laid down by the A.P. High Court (supra) as well as the order of the A-Bench of the Tribunal, Hyderabad, it is clear that the assessing officer has to complete the assessment under section 143(3) by way of regular computation under the relevant provisions of the Income Tax Act and that assessment is not sterilised or abrogated or abandoned by taxing the companies on notional or a deemed income which is equal to 30 per-cent of the book profits determined under Explanation below section 115J(1A). The first process of determining the income under section 143(3) remains valid and there is no provision in the Income Tax Act to treat such assessment as sterilised or abandoned or abrogated. While completing the assessment. Under section 143(3) the assessing officer allows depreciation and determine W.D.V. of the asset under section 43(6) of the Income Tax Act, 1961. Such determination of W.D.V. while computing income under regular provisions of the Act is valid in a particular assessment year unless in appeal for that particular assessment year the appellate authorities gave a different finding on the issue of W.D.V. In the case of the assessee before us the assessing officer has already allowed depreciation for assessment years 1989-90 to 1991-92 and unabsorbed depreciation for these assessment years has been carried forward and allowed deduction in the assessment year 1992-93 for which assessee's appeal is considered. Allowance of depreciation for earlier assessment years, i.e., 1989-90 to 1991-92 means that written down value of assets as defined under section 43(6) has been determined by the assessing officer. As the assessee has not contested the determination of W.D.V. of assets for those years in appeal, the determination of W.D.V. of assets has become final and cannot be considered by the Tribunal in assessment year 1992-93. This issue was never considered in the case of Shriram Investments Ltd. (supra) by the Tribunal which is relied upon by the learned counsel for the assessee. Therefore, the decision of the Tribunal in the said case has no relevance on the issue in the case of the present assessee before us.
15.The learned counsel for the assessee has emphatically argued that when total income of the company is assessed under section 115J the other provisions of the Act are sterilised or abandoned. We do not accept this line of illegal argument of the assessee's counsel because there is not a single provision in the whole of the Income Tax Act which would support such a fantastic, imaginary and illegal argument.
16. The argument of the learned counsel for the assessee that when income is assessed under section 115J then other provisions of the Act get sterilised is not only illegal and goes against the provisions and scheme of the Act, but it leads to horrible and illegal consequences which will be discussed by us in the later part of this order at appropriate place. It is keeping in view the proposition of law laid down by the Hon'ble A.P. High Court and Hyderabad Bench of the Tribunal (supra) that we have held in para 12 at page 11 of our order dated 29-4-1997 that the argument of the ld. counsel for the assessee that depreciation to the extent of difference between the amount of depreciation computed in accordance with the Income Tax Rules and the amount of depreciation actually debited in the assessee's books of account should be considered as not allowed to the assessee, has no merit. We have considered the issues raised in the case of Shriram Investments Ltd. (supra) thoroughly before deciding the issue in the case of the assessee herein and hence there is no question of any mistake in our order dated 29-4-1997 in the case of the assessee before us.
17.1 The next argument of the learned counsel is that the Tribunal erred in taking unilateral decision to differ from an earlier co-ordinate Bench, judgment without inviting arguments from the contesting parties about the desirability or otherwise of differing from an earlier decision of a co-ordinate Bench. It is argued that the assessee's counsel should have been afforded proper opportunity to make submissions in respect of the aforesaid A.P. High Court judgment and the order of the Hyderabad Bench of the Tribunal. Contending further that the above mistake committed in the process of delivering an ex parte award is a mistake which goes to the root of the matter, the learned counsel pleaded that the order passed by the Tribunal deserves to be recalled. Reliance was placed on the judgment of the Hon'ble Supreme Court in the case of Distributors (Baroda) (P) Ltd. v. UOI (1985) 155 ITR 120 (SC). It was also argued that the Mumbai Tribunal's order in the case of Virendra & Co. (supra) overlooked the complexities present in following a judgment, and also overlooked the position that the cause of justice will be served by posting the case and deciding the issue thereafter rather than deciding the issue without arguments. In view of these arguments, the learned counsel prayed for recalling the order passed by the Tribunal in the case of the assessee.
17.2 We have considered the arguments of the 1earned counsel. Admittedly, the Tribunal while rendering the decision in the case of the assessee, did consider all the arguments raised in the case of Shriram Investments Ltd. (supra). In the said case, the A.P. High Court decision in Suryalatha Spg. Mills Ltd's case (supra) and Hyderabad A-Bench of the Tribunal's decision in the case of Pennar Steels Ltd. (supra) were not brought to the notice of the Tribunal, during the course of hearing. Now, the issue to be considered is whether, it is necessary to bring to the notice of the assessee's counsel decision/s of other High Courts or Tribunal, etc. before deciding a particular issue. In this connection we asked the assessee's counsel to offer his arguments on merits of the case after taking into consideration the aforesaid A.P. High Court's decision as well as the order of the Hyderabad A-Bench of the Tribunal, so as to enable us to find out whether the Tribunal committed any error in following those decisions in deciding the present assessee's case. Since we have heard the assessee's counsel on merits after taking into consideration the decision of A.P. High Court in Suryalatha Spg. Milk; Ltd.'s case (supra) and the order of the Hyderabad Bench of the Tribunal reported in Pennar Steels Ltd.'s case (supra), the arguments of the learned counsel that there were mistakes in the order passed by the Tribunal have become infructuous in the sense that the assessee's counsel was heard on merits also again. Assessee's arguments on merits will be considered.
18. We also hold that the aforesaid arguments of the learned counsel do not hold good. In this connection, we refer to the provisions of section 254(1) of the Act, which read as under:
"(1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit." [Emphasis supplied] The Tribunal is no doubt required to give opportunity of hearing to the parties before deciding the issues involved in the appeal and then pass such order thereon as it thinks fit. The assessee in the present. case, was issued proper notice of hearing and the assessee's counsel was fully heard. The assessee's counsel relied on the arguments raised in the case of Shriram Investments Ltd. (supra) before the Tribunal, and did not raise any other arguments other than those raised in the said case earlier. Similarly the learned departmental Representative on behalf of the revenue also relied on the arguments raised by the Standing Counsel for the department before the Tribunal in the case of Shriram Investments Ltd. (supra). Now, the issue is whether, the Tribunal is debarred from considering the decisions of the A.P. High Court and the Hyderabad Bench of the Tribunal (supra) without bringing the same to the notice of assessee or its counsel, which are relevant to the issues involved in the present assessee's case. The decision of any High Court, in the absence of any contrary decision of jurisdictional High Court or any other High Court, has a binding effect in the sense that it must be followed unless and until there are reasons for not following the same. We found that the aforesaid judgment of the A.P. High Court in the case Suryalatha Spg. Mills Ltd. (supra) is relevant to the issue in question. Similarly, the decision of the Hyderabad Bench of the Tribunal in Pennar Steels Ltd.s case (supra) was found to be equally relevant to the issue involved in the assessee's case. We, therefore, followed those decisions while disposing of' the present assessee's appeal. The learned counsel for the assessee referred to the decisions of the Mumbai High Court in the case of Geoffery Manner & Co. Ltd. v. CIT (1996) 221 ITR 695 (Mum). In the said decision their Lordships of the Mumbai High Court followed its earlier decision in the case of CIT v. Thana Electricity Supply Ltd. (1994) 206 ITR 727. In the case of Thana Electricity Supply Ltd. (supra) the Mumbai High Court examined the scheme of the Income Tax Act and referred to the provisions of section 260 of the Act. Their Lordships pointed out that the plain reading of section 260(1) clearly goes to show that what the High Court is required to do under this section is to decide the question of law raised in the case before it and to deliver "its judgment thereon containing the grounds on such such decision is founded." The High Court therefore, has to give its own decision and also the reasons therefor. While so doing, undoubtedly, the court is free to follow the decision of any High Court it likes and instead of giving its independent reasoning, to adopt the reasoning given by the other High Court in its judgment. After considering the provisions of section 257 which clearly go to show that the Income Tax Act itself contemplates independent decisions of various High Courts on the question of' law referred to them, the Income Tax Act has visualised the possibility of conflict of opinion between different High Courts on the same question of law and has also made specific provision to take care of such a situation in suitable cases. in view of the provisions of section 260(1) and section 257 the Hon'ble Mumbai High Court came to the conclusion that decision of one High Court is neither binding precedent for another High Court nor for courts or Tribunals outside its territorial jurisdiction. The ratio laid down by the Hon'ble Mumbai High Court in the aforesaid case was followed by the said court itself in Geoffrey Manner & Co. Ltd.'s case (supra) relied on by the learned counsel for the assessee (supra). In this case also the Hon'ble Mumbai High Court nowhere stated that the decision of a High Court should not be followed by the Tribunals. If the decision of a High Court is not binding, it does not mean that the said decision should be rejected without reason. We are, therefore, of the considered opinion that unless and until there are reasons compelling the Tribunal to take a different view, the decision of any High Court in the country on a particular issue must be followed and should not be ignored only for the reason that the Tribunal does not come under the territorial jurisdiction of that particular High Court.
18.1 In the case of CIT v. Maganlal Mohanlal Panchal (HUF) (1994) 210 ITR 580 their Lordships of the Gujarat High Court held that the Tribunal is bound to follow sole judgment of a different High Court. Similarly in the case of CIT v. Deepak Family Trust (No. 1) [1994] 211 ITR 575 (Guj) the Hon'ble Gujarat High Court held that judgment of one High Court must normally be followed by another High Court. In the case of the assessee before us we could not find any reason to ignore the judgment of the A.P. High Court in Suryalatha Spg. Mills Ltd.'s case (supra) because that decision explains the basis of assessment and chargeability of income to tax under the scheme of the Income Tax Act. We, therefore, followed the said decision while deciding the assessee's appeal because there was no decision of any other High Court on the issue relevant herein. When there is no contrary decision of any other High Court as against the A.P. High Court's decision (supra), and there is no reason why we should not have followed the said decision which is most relevant and which explains the scheme of the Income Tax Act in the matter of computation of income and charging of income to tax under section 143(3) and under section 115J of the Act. We do not appreciate the line of argument of the assessee's counsel that the decision of the A.P. High Court in Suryalaltha.Spg. Mills Ltd.'s case (supra) is not binding on the Madras Benches of the Tribunal because, as held by the Hon'ble Supreme Court in the case of Dunlop India Ltd. (supra), the better wisdom of the court below must yield to the higher wisdom of the court above. Therefore, we are of the considered opinion that the decision of a High Court on a relevant issue must be followed in the absence of any contrary decision of any other High Court on the issue, because ignoring the decision of a High Court by a Tribunal would amount to demeaning the authority of law which is not correct. If the arguments of the Iearned counsel are accepted, then even the decision of the Mumbai High Court in Geoffrey Manners & Co. Ltd.s case (supra) relied on by him need not be considered and followed.
18.2 Under section 254(1) of the Act the Tribunal is required to give opportunity of being heard to both the parties. The Tribunal is not required to issue show-cause notice to a party as to why a particular decision of High Court should not be followed. After hearing the parties, the Tribunal has to pass orders on the issues as it thinks fit according to law. The decisions of a High Court lay down law and should be followed unless and until there is a contrary decision on the same issue of another High Court. If the assessee's counsel is not aware of a contrary decision of a particular High Court, then it is not the duty of the Tribunal to bring to his notice such a decision of a particular High Court and then invite arguments thereon. Every assessee is free to engage any counsel he likes to represent his case before the Tribunal. Now suppose, an assessee engages a counsel (who is fresh law graduate) to represent him before the Tribunal. The said counsel may not be aware of various decisions relating to the issues in appeal. Then it does not mean that the Tribunal is bound to furnish him list of cases which the Tribunal wanted to follow or apply on the relevant issues in appeal. It is for the assessee or his counsel to raise arguments relating to the issues as they like, but it is for the Tribunal to give a decision according to the provisions of the Act as interpreted by High Courts. The decision of High Court lay down or explain the relevant law on the issues involved. In this connection we may refer to the decision of the Mumbai Tribunal in Virendra & Co's case (supra). In this case also the Tribunal considered the arguments of both the parties and material on record and had allowed the assessee's claim under sections 80HHC and 80-I for earlier years. But in the assessment year 1985-86 its claim for deduction under the above sections was disallowed by the Tribunal in view of the decision of the apex court in the case of CIT v. N. C Budharaja & Co. (1993) 204 ITR 412 (SC). The assessee filed Misc. petitions under section 254(2) and contended before the Tribunal that even the Departmental.Representative had agreed that he had no say against the various submissions in the paper book containing assessee's statement of facts and summary, of grounds of appeal. It was further contended that the Tribunal had taken cognizance of cases not cited before it and the assessee should have been given on should now be given an opportunity to differentiate and distinguish the decision in the case of N.C Budharaja & Co. (supra). The Mumbai Bench of the Tribunal rejected the assessee's application under section 254(2) and held as under (as per Head-notes) :
"As regards the first objection, the Departmental Representative only conceded that there were several cases in favour of the assessee, yet, he would rely on the case of N.C Budharaja & Co. (supra) whereby the Supreme Court had reversed several decisions of various High Courts including that of Bombay High Court and hence, the entire 'Issue had to be considered in the light of that decision. Also, the affidavit of the assessee's counsel could not be correct because the departmental representative had no authority to make a concession against the department unless he was duly authorised by the Commissioner. There was nothing on record to show that he was so authorised. Thus, the objection was patently wrong and was, therefore, rejected.
As regards the objection (2), the assessee seemed to suggest that the Members of the Tribunal were supposed to know only that much of law or facts or the application of law to the facts of a case as was told to them either by the members of the Bar or by the Departmental Representative. It appeared to be the substance of the arguments and pleadings on behalf of the assessee that even if the members of the Tribunal knew some law they should first get the correctness of their understanding approved by the members of the Bar and unless the y did so, their order on the basis of their understanding of law laid down by the Supreme Court or the jurisdictional High Court if it was referred to, in the order of the Tribunal, would be a mistake apparent from record which the Tribunal was bound to rectify. It was not possible to subscribe to this view. The law requires that the Tribunal should hear both the parties in an appeal and should thereafter pass such orders thereon as it thinks fit. No doubt, such an order has to be a speaking order and the decision of the Tribunal has to be supported with some reasoning, which has to be reasoning of the Tribunal based on material on record, arguments advanced before it and also its own knowledge and understanding of law. As pointed out by the apex court in Kapurchand Shrimal v. CIT (1981) 131 ITR 451, an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision an appeal is preferred to dispose of the whole or any part of the matter afresh, unless forbidden from doing so by the statute. The arguments of the assessee was, therefore, rejected both on the ground that what was argued was not factually correct and also on the ground that merely because the Tribunal had relied on its own knowledge by referring to some Supreme Court or jurisdictional High Court decision, and that too not to come to a final decision but only to support its own reasoning for coming to a particular conclusion, it could not be termed as a mistake apparent from record in the order of the Tribunal.
The assessee's objection (3) had no force because the Departmental Representative had relied and cited the case of CI Tv. Sterling Foods (Goa) (1995) 213 ITR 851 (Bom)) in his arguments which was noted in the Tribunal's log book and had submitted that although a large number of Tribunal and some High Court decisions were in favour of the assessee, they were no longer good law after the decision of the Supreme Court in the case of N.C. Budharaja & Co. (supra). It was, therefore, not obligatory on the part of the Tribunal to permit citations and counter citations to go on ad infinitum by giving, a fresh opportunity to the opposite party after one case was cited by one side. It was also not obligatory on the part of the Tribunal to give an opportunity to the other party to go and study every case that was cited and then come back to argue against it. Therefore, the argument of the assessee that the Tribunal might recall its order and give an opportunity to the opposite party to distinguish and differentiate the ratio of the decision in the case of N. C. Budharaja & Co. (supra) also could not be viewed favourably.
The assessee's allegation No. (4) that the Tribunal had not considered several decisions which were given in the paper book and other materials on record was also not correct. Before giving the decisions the Tribunal had specifically mentioned that it had considered the arguments advanced from both the sides, the orders of the authorities below as well as the material on record which included citations and extracts from various decisions of the Tribunal and High Courts.This would make it clear that the Tribunal had consciously noted thal it had considered the various decisions of Tribunals and High Court.,cited on behalf of the assessee and in view of the Supreme Court decision on which the Tribunal relied while giving its decision and in view of its own reasoning which was supported with the Supreme Court and the latest Bombay High Court decisions it was not considered necessary to reproduce the facts, arguments and the decision given in each of the cases cited by the assessec. The Tribunal had considered it necessary to refer to the decision of the Bombay High Court cited by the assessee in the case of CSTv. Indian Metal Traders (1978) 41 STC 169 (Bom) and had referred to it in its order and had also given its reasonings as to why that law was no longer to be applied after the Supreme Court decision. Moreover, the view taken by the Tribunal in the case of the assessee had turned out to be in consonance with one of the latest decisions of the Bombay High Court in the case of CST v. Delhi Iron & Steel Co. (P) Ltd. (1995) 98 STC 202 (Bom) which in turn is based on a Supreme Court decision in the case of State of Tamil Nadu v. Raman & Co. (1994) 93 STC 185 (SC). This would only mean that the reasoning given by the Tribunal in its order was a plausible reasoning and the decision given by the Tribunal was a decision which any reasonable and prudent person duly conversant with law would have given in the facts and circumstances of the case.
As regards the last objection No. (5) normally a Bench of the Tribunal should not take a decision contrary to the decision taken by an another Bench of equal constitution and in such situations normally the matter should be referred to a larger Bench. However, in the instant case, the situation was different. In the instant case, one of the Members of the Bench giving this decision was one who was the author of another. decision of the Tribunal in the case of Arya Steel on which assessee had relied and hence, lie could be conscious of the fact that the facts and circumstances of the instant case were different from the facts and circumstances of the case of Arya Steel in which he had given a decision in that assessee's favour and had even rejected the reference application. Secondly, the proposition that a Bench of co-ordinate jurisdiction should not differ from the decision of a Bench of equal strength, is subject to some exceptions and one of them is that if' subsequently there is a Supreme Court decision which is trite law of the land or the decision of the jurisdictional High Court which is binding on the Tribunal working under it, or if more evidence is adduced than what was available before the earlier Bench which took a different view, it is not only possible for the subsequent Bench but even obligatory on the subsequent Bench to take a decision which is different from in earlier decision of another Bench and which is in consonance with the decision of the Supreme Court and the jurisdictional High Court. Hence, no substance was found in the Miscellaneous Application and the same was dismissed."
18.3 After considering the decision of the Hyderabad Bench `A' of the Tribunal reported in Pennar Steels Ltd.s case (supra) and the decision of the Hon'ble A.P. High Court reported in Suryalatha Spg. Mills Ltd.'s case (supra), we thought that the decision of the A-Bench of the Tribunal, Madras in (supra) does not lay down good law and therefore, we have not followed that decision while deciding the assessee's appeal. In the nature of things it is impracticable to give notice to the assessee or his counsel about a particular decision of High Court or Supreme Court and then invite his arguments on the point as to why a particular decision of a High Court should not be followed in deciding the assessee's appeal. It would lead to multiplicity of proceedings and wastage of time. What is required under the provisions of section 254(1) is that the assessee should be given an opportunity of hearing. Opportunity of hearing does not to mean to equip the litigants with the case laws in support or against them. It would lead to undue delay in deciding the appeal/s. Application of the decision of a court on a particular issue is only question of law and if the assessee is not satisfied with the decision of the Tribunal in appeal, then it is always open to him to seek a reference to High Court on that issue. But that cannot be considered as a mistake apparent from record warranting recalling of the order passed by the Tribunal. The Tribunal has only power to rectify certain mistakes apparent from record but it does not have any power to review its own orders. An order passed by the Tribunal after consideration of the rival submissions cannot be recalled merely because the Tribunal applied the decision of a particular High Court in deciding the appeal which was not brought to the notice of the assessee's counsel. We, therefore, fully agree with the decision of the Mumbai Tribunal in Virendra & Co.'s case (supra).
19. On merit, the assessee's counsel raised certain arguments. The arguments which have already been considered in our order dated 29-4-1997 will not be repeated. According to the learned counsel the major issues that arose, for consideration are as below:
Whether, under the scheme of section 115J assessment the difference between depreciation allowable under the normal provisions of the Income Tax Act and the book depreciation, is deemed to have been allowed within the meaning of section 43(6) of the Act for the purpose of arriving at the written down value?
Whether, the decision of the Supreme Court in the case of Madeva Upendra Sinai () 96 ITR 209 (SC) explaining the scope of the words 'actually allowed' contained in Section 43(6) is applicable to the assessee's case and binding ?
19.1 According to the Id. counsel the purpose for which section 115J was brought on statute book was to ensure that certain companies which make huge book profits and declare dividends but return losses for the purpose of Income-tax assessment taking advantage of the various incentives granted by the government, pay some tax. The incentives that are allowed as a deduction while computing the business income are investment allowance, development rebate, etc. Certain other incentives which are allowed as deduction from the total income like the various provisions contained in Chapter VI-A of the Income Tax Act are Sections 80J, 8OK, 80M, etc. According to the Iearned counsel, it is also now well-settled that depreciation allowance is a proper debit in the profit and loss account in order to arrive at the true and real profits of a business undertaking, and this position has been clarified by their Lordships of the Hon'ble Supreme Court in a number of cases including Madeva Upendra Sinai's case (supra) and CIT v. Mother India Refrigeration Industries (P) Ltd. (1985) 155 ITR 711 (SC). According to the learned counsel section 115J was not intended to punish an assessee or to finish an assessee, but it was only intended to collect some tax from corporate assessees which were making some real book profits. He contended that section 115J was not directed against the grant of depreciation under section 32 and that the difference between book depreciation and Income-tax depreciation arises not by design but because of the amendment brought out by Companies (Amendment) Act, 1988 delinking depreciation for Companies Act purposes from Income Tax Act, by amending sections 250 and 350 of the Companies Act. According to the Iearned counsel, its only in this context the words 'actually allowed' under the definition of written down value assumes importance.
The legislature could have used the words 'allowed or deemed to have been allowed', but it uses the words 'actually allowed'. It is argued that whenever the legislature wanted to dilute the effect of the words '`actually allowed', it had always employed necessary language vide section 10-A of the Income Tax Act which was introduced in 1981 and section 10-B of the Act which was introduced in 1989, on section 44AD(3) which was incorporated by Finance Act, 1994.
19.2 According to the ld. counsel, adoption of 30 per cent of book profit is an ad hoc exercise and section doesn't even attempt to correlate the deemed total income. In other words, the deemed total income is not arrived at by making additions or deductions to the normal total income. It is contended that the definition of the words 'written down value' under section 43(6) remained unaltered notwithstanding the decision of the Supreme Court in Madeva Upendra Sinai's case (supra). No attempt was made to incorporate a provision like section 10A(4)(iv) which was brought into the Statute Book, as early, as 1981. The learned counsel also referred to the provisions of section 44AD(3), introduced by Finance Act, 1994. He urged that section 44AD is similar to section 115.J in that it provides for determination of total income in an ad hoc manner with a deeming provision as section 115J. Even so, section 44AD(3) has been specifically incorporated in the Statute Book, and the absence of similar provision under section 115J clinches the issue in favour of the assessee. It was further argued that no provision like section 32(1) third proviso was incorporated, if the intention was to disallow a portion on any portion of depreciation entitlement. According to the learned counsel, these circumstances make it clear and self-evident that the right of an assessee to claim depreciation taking into account only the depreciation that was actually allowed in earlier previous years has not been taken away and was not intended to be taken away. The learned counsel referred to rules of Interpretation and the mischief rule or the rule of Haden's case in the light of legislative practice under similar circumstances. He relied on the decision of the Supreme Court in Sales Tax Commissioner v. Modi Sugar Mills AIR 1961 SC 1047 at page 1051 in which it was held: "It cannot imply anything which is not expressed, it cannot import provisions in the statute, so as to supply assumed deficiency." He further emphasised on the binding nature of the Supreme Court's Judgment in Madeva Upendra Sina'is case (supra). Reliance was also placed on the decision of the Gujarat High Court L. B. Kharawala v. ITO (1984) 147 ITR 67 (Guj), CIT v. Andhra Pradesh Riding Club (1987) 168 ITR 393 (AP) at page 404. It is ultimately contended that it will be a mistake apparent from record if a decision is rendered contrary to Madevi Upendra Sinai'c case (supra).
20. The learned departmental Representative, on the other hand, supported the order passed by the Tribunal dated 29-4-1997 and urged that no interference is called for.
21. We have carefully considered the rival submissions. Insofar as the arguments of the ld. counsel relating to introduction of provisions of section 10A(4)(iv) and section 10B(4)(iv) of the Income Tax Act, are concerned, such arguments are covered by our reasons in order dated 29-4-1997 under consideration, (paras 13.1 and 13.2) and we do not consider it necessary to repeat the same reasons here. Insofar as applicability of the Supreme Court's decision in Madeva Upendra Sinai's case (supra) is concerned, we have discussed the matter in para 10 of our said order and hence those reasons are also not repeated here. In fact, the assessing officer has computed the assessee's income for assessment years 1989-90 to 1991-92 in accordance with the decision of the Supreme Court in Madeva Upendra Sinai's case (supra) with reference to section 43(6) of the Income Tax Act, and alleged depreciation to the assessee. The assessee has accepted those assessments and determination of W.D.V. of assets for all the years has become final, and cannot be agitated by the assessee in the assessment year 1992-93. The assessee has no right to raise issues pertaining to assessment vears 1989-90,1990-91 and 1991-92 which have become final, in the appeal relating to assessment year 1992-93.
22.1 The learned counsel for the assessee has referred to the provisions of section 44AD(3) which read as under:
"(3) Written down value of any asset used for the purpose of the business referred to in sub-section (1) shall be deemed to have been calculated as if the assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years".
On the basis of the provisions of the said section 44AD(3), the learned counsel argued that there is no similar provision in section 115J and hence, it cannot be presumed that the assessee had been actually allowed the deduction in respect of depreciation.
22.2 In this connection, we would refer to the decision of the Hon'ble Supreme Court in the case of Goodyear India Ltd. v. State of Haryana (1991) 188 ITR 402 (SC). The Hon'b1e Supreme Court at pages 424 and 425 held that it is not permissible to construe a fiscal provision by making assumptions and presumptions. Similarly in the case of All India Federation of Tax Practitioners v. UOI (1997) 228 ITR 68 (Bom) it was held that the laws relating to economic activity are different from those relating to fundamental rights. While interpreting the fiscal provisions, as held by the Hon'ble Supreme Court, there are no presumptions and assumptions. If it is provided in under section 44AD(3) that "as if the assessee had claimed and had been actually allowed" depreciation for the relevant year when profits and gains of business of civil constructions are computed, then it does not mean that in the absence of similar provisions section 115J it can be presumed that depreciation shall not be deemed to have been allowed. There is no presumption and assumption in the absence of a specific provision. The arguments of the learned counsel are based only on assumptions and presumptions, for which there is no scope in fiscal statutes. These arguments of the learned counsel are entirely contrary to the scheme of the Income Tax Act regarding computation of income under section 143(3) as explained by the A.P. High Court in Suryalatha Spg. Mills Ltd. case (supra). The learned counsel has not advanced any single argument to point out that how the said decision is not applicable to the assessee's case insofar as the scheme of assessment and charging of tax is concerned. In the case of Suryalatha Spg. Mills Ltd. (supra) while interpreting the provisions of section 115J, the Hon'ble A.P. High Court has categorically held that section 115J involves two processes. First the assessing authorities have to determine the income of a company under the normal provisions of the Income Tax Act, relating to regular computation of income, and secondly the book profit has to be worked out in accordance with the Explanation below section 115J(IA). Once the income is computed under the normal provisions of the Act, then the deduction for depreciation has to be under the normal provisions of the Act. The A.P. High Court has clearly held that from a plain reading of subsection (2) of section 115J, it is clear that the quantum of unabsorbed losses, unadjusted depreciation, etc., for the purpose of carrying forward has to be under the provisions of the Act, irrespective of the quantum of income determined under the provisions of sub-section (1) of section 115J.
22.3 Under section 29 of the Income Tax Act, 1961 the income from profits and gains of business or profession shall be computed in accordance with the provisions contained in sections 30 to 43D of the Income Tax Act, 1961. The business income to be computed in accordance with the provisions of sections 30 to 43D, is under the normal provision of the Act, relating to regular computation of income. Section 32 is part and parcel of the scheme of the Act (as mentioned in section 29) regarding regular and normal computation of income in accordance with the provisions contained in sections 30 to 431). Section 44AD(3) is also part and parcel of regular assessment of income [as defined under section 2(40) of the Act]. Since section 44AD(3) is a part of regular computation of income under section 143 it was necessary to provide in sub-section (3) of section 44AD that while computing the profits and gains of business of civil construction the W.D.V. of the assets shall be deemed to have been calculated as if the assessee has claimed and had actually been allowed depreciation for each of the relevant assessment year. It was necessary to enact such a provision because, section 44AD is a part of regular assessment of business income, while making regular assessment under section 143. If such a provision has not been made in section 44AD(3) then there would have been doubts about the admissibility or allowability of depreciation in the case of computation of profits and gains of business of civil constructions, because provisions of section 32 as well as section 44AD form part of regular assessment under section 143 and the scheme of computation of income from profits and gains of business. But section 115J is totally independent charging section and it has no connection with regular assessment or computation of income under the scheme of the Act, as provided in section 29 and section 143 of the Act. Therefore, there was no need to make such a provision in section 115J as has been made in section 44AD(3). Both these sections, i.e., sections 44AD and 115J are totally different in nature. The object and purpose of these provisions are also totally different. The object of section 44AD is to determine the income from profits and gains of business of any assessee carrying on business of civil construction or supply of labour for civil construction under regular assessment, as defined in section 2(40) of the Income Tax Act, whereas the purpose of section 115J is not to determine the income by way of regular assessment, but to tax certain companies at 30 per cent of book profits. The object and purpose of these two sections are therefore, totally different and there is no comparison between these sections. The comparison of these two sections is therefore, misconceived by the learned counsel.
23. The Iearned counsel for the assessee repeatedly emphasized that when the income is assessed under section 115J the other provisions of the Act are sterilized or abandoned. In support of this argument he relied on the Tribunal's decision in the case of Shriram Investments Ltd. (supra).
23.1 We have considered this argument also. But if we accept this line of argument, then it will lead to horrible and disastrous consequences for various assessees as the department, which are enumerated below :
(1) Law is enacted by the Parliament consisting of Lok Sabha and Rajya Sabha. Lok Sabha consists of members who are representatives of the People of India. In other words, Members of Parliament are representatives of more than 90 crores of Indian population. Members of Rajya Sabha are representatives of all the states and Union Territories. Any law made by the Parliament has to be interpreted according to intention of Parliament and such intention has to be gathered only from the plain and un-ambiguous language used in the Statute, rather than any notion which may be entertained by the court as to what is just or expedient. Express Newspapers Ltd. v. CIT [1984] 148 ITR 484 (Mad.). In the process of interpreting the provisions of the statute, the Tribunal is not supposed to insert words or phrases which are not there in the provisions of the Statute because, insertion of words in the statute or reducing the words from the provisions of the statute would defeat the intention of the Parliament.
(ii) There is not a single provision in the whole of the income-tax which supports the arguments of the ld. counsel in the present proceedings. If we accept such imaginary and fantastic arguments, then there are various provisions of the Act which have to be sterilized despite the fact that there is no specific provision for sterilizing even a single provision of the Income Tax Act. In the absence of provisions in the Statute we cannot be persuaded to accept the imaginary and fantastic arguments of the Id. counsel. Rather we will be doing horrible violence to the language of- the statute and redrafting the Income Tax Act by sterilizing and abrogating the provisions of the Income Tax Act by a single stroke of pen. The Tribunal can only apply the law but in the process of applying the law there is no power to abrogate, abandon or- sterilize the provisions. The arguments of the learned counsel would lead to sterilization and abrogation of various sections such as, sections 22 to 27, 28 to 44D, 45 to 59, 69 to 69D, 70 to 80, 80A to 80VV, 142 to 144, 147, 148, and all the provisions relating to penalty under Chapter XXI.
(iii) Even if it is accepted for arguments sake that once the income is assessed under section 115J then other provision of the Income tax Act are sterilized, then either no assessment can be made under section 143(3) or the assessment made under section 143(3) becomes invalid because the provisions relating to the assessments stand sterilized.
If such an assessment has no existence in law, then if subsequently it is found that income has escaped assessment, the Income Tax Officer cannot reopen the assessment under sections 147/148 in the case of a company whose income bas been assessed to tax under section 115J, because other provisions are sterilized. We are not prepared to accept such all illegal argument which has no foundation in law and which leads to illegal and incongruous results.
23.2 The argument of the ld. counsel that provisions of the Act become sterilized once the assessment is made under section 115J is self-contradictory and there is inherent fallacy in such an argument. While completing the assessment under section 143 the Income Tax Officer has to determine and carry forward certain claims of the assessee for deduction in subsequent years. For instance, under section 32(2) the unabsorbed depreciation has to be carried forward to subsequent years for set off. Similarly the unabsorbed investment allowance has to be carried forward under section 32A(3). The expenditure on scientific research under section 35(2) is to be allowed deduction for five years. The expenditure on technical know-how under section 32AB is to be allowed deduction for six years, i.e., 1/6th for initial year and the balance 5/6th for next five years. Similarly under section 35D(1) capital expenditure on certain items is to be allowed deduction for ten years. If the company has suffered loss, it has to be carried forward to next year. If the arguments of the learned counsel are accepted, then an expenditure and deficiency as above cannot be carried forward because the sections themselves are sterilized and abandoned. Similarly, if the Income Tax Officer found that the assessee has concealed particulars of his income or has committed any default mentioned in various sections under Chapter XXI, he cannot levy penalty because once an income is assessed under section 115J these sections also would become sterilized. The assessing officer cannot also determine the unabsorbed investment allowance under section 32, deficiency under section MJ(3) and carried forward loss under section 72 to be set off in next years because, these sections become sterilized once the assessment is made under section 115J. We are not convinced at this argument of the assessee's counsel because we cannot be persuaded to accept such an illogical, illegal and untenable argument, which makes the Income Tax Act, totally meaningless and defunct. Such an argument even defeats the right of an assessee to carry forward unabsorbed deductions under sections 32(2), 32A(3), 72, 80J, etc. which have been granted by the statute under sub-section (2) of section 115J, and therefore, leading to illegal and horrible consequences for other assessees who are entitled to relief under these sections.
24. In fact, the ld. counsel for the assessee was asked to explain how the provisions of section 115J(2) could be given effect to, if his arguments are accepted. At the time of hearing, it was stated that he is not interested in explaining the provisions of section 115J(2) and he is only interested in getting the depreciation allowed to the assessee. We are at a loss to understand this line of argument because the learned counsel of a litigant is part of the Tribunal and while arguing the case he owes a moral responsibility and duty to be fair not only to his client but also to the Tribunal and the opposite party in the conduct of a case. Execution of law is not something which concerns the Tribunal only but it concerns the litigant party also. However, on a subsequent hearing, the learned counsel referred to para 17-A of the Tribunal's order in the case of Shriram Investments Ltd., reported in Shriram Investments Ltd.'s case (supra), in support of his submission in reply to the query raised by the Bench. For the sake of convenience, the said para 17-A is reproduced below:
" 17A. In our opinion, the scope and ambit of section 115.J(2) is only to protect the right of the assessee to have unabsorbed items of [(a) depreciation, (b) business losses, (c) losses on capital account, and (d) investment allowance, etc.] to be carried forward through the assessment years to which the provisions of section 115J(1) were applicable. The right vested in the assessee in respect of such unabsorbed items brought forward from the years anterior to the commencement of the operation of section 115J(1) are thus protected in sub-section (2). Further, sub-section (2) does not use the expression "carried forward and set off" but stops only with the expression "carried forward". Such being the purpose and scope of section 115J(2), it is not material to decide the issue of the quantum of depreciation actually allowed during the years when the provisions of section 115J were in force. Thus, with great respects, we are unable to concur with the decision of Bangalore Bench."
It could be seen that according to the Tribunal, the scope and ambit of section 115J(2) is only to protect the right of the assessee to have unabsorbed items of depreciation, business loss, losses on capital account and investment allowance, etc. to be carried forward through the assessment years to which the provisions of section 115J(1) are applicable. According to the Tribunal the right vested in the assessee in respect of such unabsorbed items brought forward from the years anterior, to the commencement of the operation of section 115J(1) are thus protected in sub-section (2). This conclusion is based only on presumptions and assumptions which is not permitted in fiscal statutes. We are not convinced by this conclusion because, there is no basis or reasons given by the Tribunal to come to the above conclusion in the case of Shriram Investments Ltd. (supra). As it is a fundamental principle of interpretation that nothing is to be read in and nothing is to be implied, one can only look fairly at the language used in the statute (Karnataka State Financial Corpn v. CIT (1988) 174 ITR 206 (Karn), Smt. Radhdevi Mohatta v. CIT (1981) 129 ITR 229 (Bom). If para-17A of the Tribunal order in the case of Shriram Investments Ltd. (supra) and the arguments of the assessee's counsel are followed, then it would amount to adding extra words "anterior" to the provisions of section 115J(2) and redrafting of the said sub-section (2) of section 115J. Sub-section (2) of section 115J provides for determination of the amounts in relation to the relevant previous ' years, for which section 115J(1) is to be applied, to be carried forward to the subsequent year or years, under the provisions of sections 32(2), 32A(3), 72(1), 73, 74 or section 80J. Section 115J(2) nowhere provides for carry forward of unabsorbed allowances, losses and rebates under these sections from the years anterior to the commencement of the operation of section 115J(1). Carry forward of unabsorbed allowances, losses and rebates under the aforesaid sections for the years anterior to the commencement of operation of section 115J(1) is governed by these sections only and not by section 115J(2). Section 115J(2) has no relevance to the carry forward of unabsorbed allowances, losses and rebates for earlier years anterior to the operation of section 115J(1).
24.1 Addition of the words to the statutory provisions is not permissible while interpreting a particular provision of the Act. In fact, the normal and regular assessments as defined in section 2(40) only enable the assessing officer to compute the assessee's income under section 143. It is only when an assessment order is passed under section 143 and relief determined under sections 32(2), 32A(3), 80J(3) or loss to be carried forward that the assessee acquires a right to carry forward the unabsorbed loss, unadjusted investment allowance or depreciation and deficiency under section 80J, etc. If the Income Tax Officer has not passed any order under section 143 then the assessee has no right to carry forward the deficiency or unabsorbed depreciation, investment allowance, etc. to the next year or subsequent ' years. Therefore, the query raised by the bench has not been covered by para 17A of the Tribunal's order in Shriram Investments Ltd's case (supra) or by the arguments of the ld. counsel. In fact, the learned counsel for the assessee has failed to give specific reply to the query. The provisions of section 115J(2) totally become inoperative and redundant if the arguments of the learned counsel are accepted and para- 17A of the earlier order of the Tribunal is followed.
25. In the case of Addl. CITv. Bhagat Swarup Charanjit Singh & Co. (1982) 133 ITR 13 (Del), their Lordships of the Delhi High Court held that the principle of statutory construction is well-settled that no statute should be interpreted in such a manner as to render any provision completely meaningless or redundant. In the assessee's case there is no provision on which its claim is based; rather its claim is based only oil arguments and we cannot accept such arguments which make various provisions of the statute totally redundant and meaningless. We, therefore, reject the arguments raised by the assessee's Id. counsel.
26. The argument of the assessee's counsel that once the book profit is charged to tax under section 115J(1) the other provisions of the Act are sterilized and abandoned, not only reduce the provisions of sub-section (2) of section 115J to a mere farce and non-existence, but such an argument entirely goes against the scheme of the Act. If the revenue wants to tax a receipt the burden lies on the revenue to prove that a particular receipt is income under the Income Tax Act. When an assessee wants to claim deduction, rebate, relief or allowance the burden lies on the assessee to prove that he is entitled to such deduction, rebate, relief, etc., claimed by him. In the present assessee's case the learned counsel placed reliance on the decision of the Hon'ble Supreme Court in Madeva Upendra Sinai's case (supra). The principle laid down by the Hon'ble Supreme Court in that case is applicable only while completing assessments under section 143(3) and such principles have been kept in mind by the assessing officer while completing the assessments under section 43(3) not only for earlier years but also for the assessment year under consideration. There is no scope for argument that once the book profit is charged to tax under section 115J the other provisions of the Act are sterilized or abandoned. Whenever the legislature wanted to make a particular provision of law inoperative or sterilised, the legislature had made provisions in the Act itself. For instance, under section 115G of the Act it is provided that it shall not be necessary for a non-resident Indian to furnish under sub-section (1) of section 139 a return of his income, if his total income in respect of which he is assessable under the Act during the previous year consisted only of investment income or income by way of long-term capital gains or both, and the tax deductible at source under the provisions of Chapter XVII-B has been deducted from such income. Thus under section 115G, the provisions of section 139(1) are made inoperative by the legislature in the case of a non-resident Indian. Again, under section 115-I a non-resident Indian has been given option to elect not to be governed by the provisions of Chapter XII-B for any assessment year by furnishing his return of income for that assessment year under section 139 declaring therein that the provisions of the said chapter shall not apply to him for that assessment year. If a non-resident Indian elects so, then the provisions of Chapter XII-B shall not apply to him for that assessment year and his total income for that assessment year shall be computed and tax on such total income charged in accordance with the other provisions of the Act. Likewise, section 115K, which is a non obstante clause, provides for computation of income in certain cases of persons carrying on business of retail trade in any goods or merchandise, or carrying on the business of running an eating place or of operating, hiring or leasing a motor cab, a maxicab or a three-wheeled motor vehicle or any other business as may be prescribed, or engaged in any vocation. Such a person mentioned in section 115K shall give a statement in accordance with sub-section (4) thereto to the effect that a sum of forty-two thousand shall be deemed to be the profits and gains of such person from such business or vocation. Section 115L is to the effect that subject to the provisions of section 115N, a person who has submitted a statement under sub-section (1) of section 115K shall not be required to furnish a return of income under sub-section (1) of section 139 and the other provisions of Chapter XIV will not apply in his case. Chapter XIV prescribes the procedure for assessment from sections 139 to 158 of the Income Tax Act, 1961. It could thus be seen that the legislature has specifically made inoperative provisions in sections 139 to 158 regarding the procedure for assessment in the case of persons who submit statements of their income under sub-section (1) of section 115K. If the statements furnished by such persons under section 115K(1) are true, then no proceedings under any other chapter under the Income Tax Act, can be initiated against such persons who submitted statements under section 115K(1). Thus, the legislature has specifically provided abandonment of the provisions of the Income Tax Act, wherever it desired so. But in the case of companies when tax is charged under section 115J(1), there is no provision for sterilizing or making inoperative other provisions of the Act and, therefore, such an argument of the learned counsel of the assessee that other provisions of the Act are sterilized once book profits are taxed under section 115J is not only against the scheme of the Act but is based purely on assumptions and presumptions, which have no place in interpreting the fiscal statute and which reduces the provisions of sub-section (2) of section 115J other various sections as non-existent.
27. We may mention that the assessing officer has completed the assessment of the assessee under section 143(3) for the assessment years 1989-90 to 1991-92 determining the brought forward depreciation loss as follows:-
1989-90 Rs. 66,38,363 1990-91 Rs. 7,40,200 1991-92 Rs. 48,66,892 Rs. 1,22,45,555 While completing the assessment under section 143(3) for assessment year 1992-93 (for which appeal was filed before the Tribunal), the assessing officer allowed deduction for depreciation loss at Rs. 1,22,45,555 which means that in earlier years the assessing officer had allowed deduction for the depreciation allowance as mentioned above out of the income of those years and carried forward the unabsorbed depreciation to subsequent years and set off the same against the assessee's income for the assessment year 1992-93, now under consideration. The assessee did not challenge the determination of depreciation as well as W.D.V. of assets for earlier years 1989-90 to 1991-92 as made by the assessing officer. Therefore, the orders of the assessing officer for earlier years 1989-90 to 1991-92 have become final and such determination of W.D.V. and depreciation allowance as also determination of unabsorbed depreciation for assessment years 1989-90 to 1991-92 cannot be challenged in appeal for assessment year 1992-93 because, by virtue of ITO's valid orders under section 143(3) for earlier three years, these issues have become final for each year and cannot be agitated in assessment year under consideration i.e., 1992-93. Therefore, the assessee's claim that it has not been allowed depreciation in earlier years is totally false. Since the income has been computed under section 143(3) for earlier years and while computing the profits and gains of assessee's business, the Assessing Officer has granted depreciation to the assessee in accordance with the provisions of' the Income Tax Act and also according to the Supreme Court's decision in Madeva Upendra Sinai's case (supra), the arguments raised by the assessee's counsel are totally infractuous. In fact, we have dealt with such arguments of the assessee's counsel in para-10 of our appellate order dated 29-4-1997.
27.1 It may be mentioned here that law changes due to amendment of law by legislature or evolution of law by judicial precedents and pronouncements. Due to judicial decisions a particular provisions of law may be construed in a different manner than the manner in which it was construed earlier. Therefore, the Tribunal need not follow the ratio laid down in its earlier orders, if certain judicial precedents which were not brought to its notice earlier or provisions of law or correct interpretation of law came to its knowledge subsequently. It may happen that all the aspects of the case and law applicable might not have been brought to the notice of the Tribunal earlier when the same issue was decided. A Tribunal may reach a different conclusion in a particular case, if after considering all the aspects of the case and other material on record which were not considered earlier, it feels that its earlier decision does not lay down good law. It would rather be incongruous to follow an earlier decision on the same issue if after considering all the aspects of the case and other material on record which came to the notice of the Tribunal subsequently, it considered that a different decision would be correct than the earlier one. In the name of judicial uniformity the error should not be perpetuated when different conclusion seems to be correct on the basis of judicial precedents and other material available on record. "To perpetuate an error is no heroism. To rectify it is the compulsion of the judicial conscience". [Distributors (Baroda) (P) Ltd's case (supra).
28. The learned counsel for the assessee has invited our attention towards various decisions in support of his contentions, which are discussed as under:
Saharanpur Electric Supply Co. Ltd. v. CIT (1992) 194 ITR 296 (SC). In this case the issue involved before the Hon'ble Supreme Court was whether, in allowing depreciation on service lines installed by the assessee (electricity supply companies) prior to previous year relevant to assessment year 1962-63, that part of expenditure incurred in connection with the installation which was required by the assessees from the consumers, had to be deducted in computing the written-down value for assessment year 1962-63 and thereafter, and actual cost of the assets as computed under the 1922 Act had to be recomputed under the provisions of section 43(1) of the Income Tax Act, 1961.
In the aforesaid case, the Hon'ble Supreme Court considered the meaning of 'actual cost' in section 43(1), which means the actual cost of the assets to the assessee, reduced by that portion of the cost thereof, if any, as has been met directly, or indirectly by any other person or authority.
Since in the case of the assessees (electricity supply companies) part of the expenditure incurred by the companies from the consumers in connection with installation of service lines was recovered, their Lordships held that the actual cost of the assets had to be recomputed under the provisions of section 43(1) and the expenditure recovered by the assessees (electricity supply companies) from the consumers had to be deducted in computing the W.D.V. for the assessment year 1962-63 and thereafter. This decision of the Apex Court is not helpful to the present assessee in any manner, because no such issue, as considered by the Hon'ble Supreme Court in Saharanpur Electric Supply Co. Ltd.'s case (supra) is involved in the assessee's case.
B. Posetty & Co.'s case (supra) The Hon'ble Judges of the High Court referred the matter for consideration by a Bench of three learned Judges so that an authoritative pronouncement is made on the question arising therein. In this case the application of res judicata to the Tribunal was not at all involved. Therefore, when the Tribunal has already given a decision in the assessee's case and the decision of the High Court in B Posetty & Co.'s case (supra) does not deal with the principle of res judicata as applicable to the Tribunal's decisions, this case is also not relevant.
Gajendra Naraian's case (supra). In this case the learned counsel for the assessee has invited our attention that while writing the judgment the Hon'ble Patna High Court considered that the matter needs further consideration and the matter could be decided afresh since the other matters appertaining to the assessee were also listed. This case also does not deal with the principle of res judicata applicable in the present case before the Tribunal and the decision of the Patna High Court in the case of Jhaverbhai Patel (supra) which we have discussed in para 7.2 of this order is applicable. Therefore, this decision in Gajendra Narain's case (supra) has also no relevance to the facts of the present assessee's case.
29. We have considered all the submissions and case law cited by the ld. counsel for the assessee. If a particular decision or argument of the Id. counsel has not been mentioned in the Tribunal's order then it is because they are not relevant to the issues involved before us. There is no dearth of instances where one Bench of the Tribunal had not followed its earlier decision in the case of the same assessee on the same issue when a decision of the High Court has been brought to its notice or has come to its notice subsequently. After the Tribunal rendered its decision in the case of an assessee, then the argument with regard to reference to Special Bench becomes infructuous and/or irrelevant. In view of the foregoing, we do not find any mistake in the order passed by the Tribunal, dated 29-4-1997 in the assessee's case which could be described as apparent from record. We, therefore, find no merit in the contentions raised by the assessee's counsel.
30. The learned counsel or the assessee Sri V.D. Gopal, had filed affidavit dated 23-5-1997 in which lie has sated as under :
`Since the errors and mistakes referred to hereinabove are sell-evident and manifest and are apparent from the record and since the decision has been rendered without giving a real and proper opportunity to the appellant's counsel, the order of the Hon'ble Tribunal dated 29-4-1997 may bc recalled so that the appeal may be heard de novo in accordance with law keeping in mind the well-settled principles of precedents. .. ."
The learned counsel for the assessee has taken a decision and stated his decision in the affidavit as mentioned above. The assessee's counsel was not required to file any affidavit under. any rules nor he was asked to file any, affidavit by any authority in the Tribunal. It is not the duty of the counsel for the party to take a decision and state the same in an affidavit. It is the duty of the Tribunal to deliver its decision on the basis of facts and circumstances of the case. The learned counsel has, therefore, gone beyond his duty in taking a decision and stating the same in the affidavit. The affidavit of the counsel did not confine itself to the facts known to him. It contains the arguments and question of law including interpretation of the provisions of the Income Tax Act. Such a practice of putting proposition of law into the mouth of the party and stating them in an affidavit has been repeatedly deprecated by the Hon'ble jurisdictional High Court Madras and Supreme Court. Order 19, rule 3 of the Code of Civil Procedure enjoined that affidavit should be confined to such facts as the deponent was able to prove with his or her knowledge. It is certainly not open to the counsel or Advocate appearing before the Tribunal to canvass the correctness or otherwise of a judgment of the court or the Tribunal before the Tribunal, in an affidavit. We, therefore, do not appreciate the contents of the affidavit filed by the assessee's counsel and therefore, they are rejected as unwarranted and misconceived.
31. This order forms part of our order dated 29-4-1997 in the case of the assessee and should be considered as part and parcel of the said appellate order. For the detailed reasons mentioned in our appellate order dated 29-4-1997, the assessee's appeal on the above issue has rightly been dismissed and as a consequence the miscellaneous petition filed by the assessee is also dismissed.
Per Shri N. D. Raghavan, Judicial Member.
32. I have carefully gone through the erudite order proposed by my learned Brother. After doing so, I separately pass this order, though be almost in agreement with it, in the paragraphs following. These miscellaneous petitions are identical involving similar facts and rival submissions, though of different assessees but happening to be of the same group filed praying to recall the orders dated 29-4-1997 in the case of assessee (Shriram Transport Finance Co. Ltd.) in Income Tax Appeal No. 572 (Mad) of 1996) and (Shriram Union Finance Ltd.) in Income Tncome Tax Appeal No. 571 (Mad) of 1996.
33.In the case of Shriram Investment Ltd. (Supra) the Tribunal decided the issue regarding allowance of depreciation. This decision was not followed by the Tribunal in our impugned order dated 29-4-1997 in view of the decisions in the case of Pennar Steels Ltd. (supra) and Suryalatha Spg. Mills Ltd.'s case (supra), which duly considered the relevant provisions of section 115J. Hence, this miscellaneous petition by the assessee submitting that it is erroneous in not having followed the decision of the Madras Bench of the Tribunal which was relied upon by the assessee and in following the decision of Hyderabad Bench of the Tribunal as well as (of the Hon'ble Andhra Pradesh High Court, both of which were not relied upon by the revenue at the time of hearing and consequently praying for recalling of the Tribunal's order dated 29-4-1997 impugned herein.
34. The learned counsel for the assessee submitted that : Reliance by the Tribunal on such decisions not cited but followed has led it to come to a conscious conclusion that the extent of difference between the depreciation debited in the books of account and the depreciation to which the assessee actually entitled, cannot be considered as actually allowed within the meaning of the definition of' the word, "actually allowed" vide section 43(1) and (6) of the Act. The decision of the Andhra Pradesh High Court in Suryalatha Spg. Mills Ltd.s case (supra) has no bearing on the issues involved, while the decisions of the Madras Bench of the Tribunal in the case of Shriram Investments Ltd. (supra) rested on the scope of the words "actually allowed" rather than the jurisdict concept of parallel assessment under section 115J noticed by the Andhra Pradesh High Court. If the aforesaid decisions in Suryalatha Spg. Mills Ltd.'s case (supra) (AP-HC) and Pennar Steels Ltd.s case (supra) (Hyd. Bench of the Tribunal) are eliminated from the field, what remains is the decision of the Madras Bench of the Tribunal in the case of Shriram Investments Ltd. case (supra) which proceeded to grant relief to the assessee following the decision in the case of Madeva Upendra Sinai's (supra). Both the aforesaid decisions of the Hon'ble Andhra Pradesh High Court and the Hydrabad Bench of the Tribunal are not apposite to the facts in issue in the instant case. As per the decision in the case of L. G. Ramamurti (supra) which is in tune with the decision in the case of Raghavaninza (supra) V. Devaki Amal's case (supra) besides the decision in the case of B. Poset & Co. (supra) and Gajendra Narain (supra), the decision in the case of Shriram Investments Ltd. (supra) should have been followed by the impugned order of the Tribunal. Further, the Hon'ble Andhra Pradesh High Court has not considered the following aspects in the case of Shriram Investments Ltd. (supra) namely on the scope of section 43(6) and also the Hon'ble Supreme Court's decision in the case of Madeva Upendra Sinai's (supra) besides the absence of provision like 44AD(3) which would have been provided if the legislature really wanted to deprive the difference between book depreciation and income-tax depreciation. That apart, when the total income of the company is assessed under section 115J, the other provisions of the Act are sterilised or abandoned. Further, no provision of the Act authorizes the assumption that depreciation not allowed shall be deemed to have been actually allowed especially when the omission is significant in the light of the legislative practice as evidenced by section 10A(4)(iv) and 10B(4)(iv) of the Act. Again the decision in the case of Madeva Upendra Sinai rendered by the Hon'ble Supreme Court applies to the instant case. Also, there is no feature or ingredients in section 115J similar to section 44AD(3) and that, therefore, it cannot be presumed that the assessee had been actually allowed deduction in respect of depreciation. Therefore, the errors and mistakes referred to herein above are self-evident and manifest and are apparent from record qualifying for recall of the orders dated 29-4-1997 for hearing the appeal afresh in accordance with the well-settled principles and precedents.
35. On the other hand, the learned representative for the revenue countered that : At the time of hearing of the appeal the revenue did not agree that the assessee's appeal could be allowed following the decision in the case of Shriram Investments Ltd. (supra) decided by the Madras Bench of the Tribunal. The arguments of the Standing Counsel in the case of Shriram Investments Ltd. (supra) were relied upon by the revenue at the time of hearing. Following the decisions of the Hon'ble Andhra Pradesh High Court as well as the Hyderabad Bench of the Tribunal, which are stated by the assessee as not to have been followed, is not a mistake apparent from record, and if at all only a reference application may lie. In the case of L. G. Ramamurti (supra) the finding of the Tribunal for assessment year 1958-59 that the so called gifts were not real gifts and interest on gifted amount was included in the hands of the donor was confirmed by the Hon'ble Madras High Court. Those findings are controverted by the Tribunal for the subsequent assessment years 1961-62 and 1962-63. The only question that emerged was as to whether the gifts were real or sham, a question of fact indeed. While in the first assessment year referred to above the Tribunal held that gifts were sham, in the subsequent second and third years on the same facts the Tribunal concluded that the gifts were real. Hence, the Madras High Court held that no Bench of the Tribunal, which is a final fact-finding authority, has any right or jurisdiction to come to a conclusion diametrically oppose to the one reached by another Bench on the same set of facts without any change in the circumstances of the case. The Hon'ble Andhra Pradesh High Court in the case of Suryalatha Spg. Mills Ltd.'s case (supra) referred' to the facts and interpreted the provisions of sections 115J(1) and (2). Better wisdom of the Court should prevail over that of the lower court particularly when the Bombay High Court also emphasized in the case of Smt. Godavaridevi Saraf (supra) the importance of a decision of a High Court. Absence to incorporate a particular provision on a particular issue in the statute cannot be supplemented or supplanted by the court. Perusal of the provisions of section 115J starting with a non-obstante clause clearly reflects that loss or depreciation can be carried forward purely under the normal provisions of the Act. In the case of Shriram Investments Ltd. (supra) Madras Bench of the Tribunal did not consider the question as to whether depreciation of the earlier years could be allowed for latter years. Hence, that decision has not nexus or relevance to the assessment year in question of the instant case as no appeal on this issue is pending for decision for the earlier years. Further, the issue dealt with by the Tribunal's order impugned herein was not considered by the said Madras Bench of the Tribunal in that case. Hence, no error has been committed by the Tribunal to allege that miscellaneous petition lies. Fresh issues were considered by the order impugned herein which were not done so in the case of Shriram Investments Ltd. (supra) are self-explanatory from the reasons furnished while arriving at the conclusion by the Tribunal.
36.1 Rival submissions heard and relevant orders read including the several case laws relied upon by the parties besides carefully going through the order of my learned Brother. After doing so, I also do consider that a careful reading of the decision of the Hon'ble Madras High Court in the case of L. G. Ramamurti (supra) reveals that no reason was given by the Tribunal in the assessment year 1963-64 for taking a view totally different from and entirely opposite to that taken by it earlier for the assessment years 1961-62 and 1962-63 and further that the Tribunal has nowhere stated that it was relying upon a particular fact which was not before it on the earlier occasion and which was overlooked by the Tribunal and that if it was taken into consideration by the Tribunal on the earlier occasion, the conclusion itself would have been different. Hence, the jurisdictional High Court came to the conclusion that the Tribunal completely erred in coming to the conclusion it did at variance with and opposed to its conclusion on the earlier occasion for the assessment years 1961-62 and 1962-63. Hence, I am also of the considered opinion that there is no merit in the assessee's stand that as per the said decision of the jurisdictional High Court the bar against differing from a co-ordinate Bench is absolute and unbriddled and unqualified, especially when the aforesaid decision is read as a whole and not piecemeal and also when the assessee's argument is totally divorced from the context of the questions in adjudication before the Hon'ble jurisdictional High Court. In other words, the net effect of the High Court's decision is that if the facts and circumstances are identical and similar in the case of the same assessee, unlike in the instant comparative cases concerned, only then the Tribunal should not take a different and entirely opposite view to the one taken already. Thus the principle of res judicata is strictly not applicable if there are sufficient facts, circumstances or materials, as in the instant comparative cases concerned, to justify a different decision taken by the Tribunal from its earlier one even in the case of the same assessec on the same issue.
36.2 Further, the stand of the assessee that when the total income of the company assessed under section 115J the other provisions of the Act are sterilized or abandoned, goes against the very scheme and provision of the Act. But the claim that sterilization, abandonment and abrogation of the other provisions of the Act happen only when the income is assessed under section 115J, is, therefore, erroneous particularly in the light of the decisions rendered by the Hon'ble Andhra Pradesh High Court as well as the Hyderabad Bench of the Tribunal respectively in the cases of Suryalatha Spg. Mills Ltd. (supra) and Pennar Steels Ltd. (supra) which finding is hereby rendered after thoroughly considering the Madras Bench decision in the case of Shriram Investments Ltd. (supra). Any law made by Parliament has to be interpreted as per the intention of the Parliament which has to be gathered only from the plain and unambiguous language used in the statute rather than any notion which may be entertained by the court as to what is just or expedient. In the process of interpretation, the Tribunal is, therefore, not supposed to insert or introduce words or phrases which are not found in the provisions of the Act, otherwise, it would defeat the intention of the legislation. There is not a single provision in the whole of the Act supporting the stand of the assessee in the instant proceedings. The Tribunal can, therefore, only apply the law without abrogating, abandoning or sterilizing the provisions of' such law. Indeed, the stand of the assessee that the provisions of the Act becomes sterilized once the assessment is made under section 115J, is self-contradictory and with inherent fallacy besides amounting to insertion of words `anterior' to the provisions of section 115J(2), which tantamounts to redrafting of legislation by the Tribunal, not permissible by law. Section 115J(2) has no relevance to the carry forward of unabsorbed allowances, losses and rebates for earlier years anterior to the operation of section 115J(1). Addition of words to the statutory provision is, therefore, not admissible while interpreting such provision of the Act. The provisions of section 115J(2) totally become inoperative and redundant if the stand of the assessee is accepted. It is a settled proposition of law that no statute should be interpreted in such a manner as to render any provision completely meaningless or redundant. In fact, in the assessee's case there are 110 provisions on which its claim is based but only on arguments the acceptance of which would make the various provisions of the Act ineffective. The stand of the assessee that the other provisions of the Act are sterilized once book profit is taxed under section 115J, is not only against the scheme of the Act but also based purely on assumptions and presumptions which have no place in interpreting a fiscal statute and which reduces the provisions of section 115J(2), and various other sections as non-existent.
36.3 Now, coming to the other aspect, while completing the assessment under section 143(3) for the year 1992-93 in question, the assessing officer allowed deduction for depreciation loss at Rs. 12,24,555 meaning that in the year after deduction for depreciation allowance was allowed out of' the income of those years and the unabsorbed depreciation was carried forward to the subsequent years and set it off against the assessee's income for the year in question. The assessee did not question the determination of depreciation and also WDV of assets for the years 1989-90 to 1991-92 as made by the assessing officer. Hence, the assessment orders for the years 1989-90 to 1991-92 have become final and such bifurcation of WDV, depreciation allowance and unabsorbed depreciation for these three years cannot be questioned in the appeal for the assessment year 1992-93 as by virtue of assessment orders for earlier three years this issue has become final for each year and cannot, therefore, be again brought in the year 1992-93. Hence, the assessee's stand that depreciation was not allowed for the earlier years is wrong. As the income was computed under. section 143(3) for the earlier years and while computing the profits and gains of the business of the assessee the assessing officer granted depreciation to the assessee as per the provisions of the Act and the decision of the Apex Court in the case of Madeva Upendra Sinai (supra) the arguments of the assessee have come totally fruitless. This is demonstrated in detail in paragraph-10 of the Tribunal's order dated 29-4-1997 impugned herein. As the assessee has not contested the determination of WDV of assets for the concerned years in appeal, such determination has become final and cannot be considered by the Tribunal in the assessment year 1992-93 as aforesaid. This aspect of the issue was not in adjudication in the case of Shrirarm Investments Ltd. (supra), which is relied upon by the assessee herein. Hence, that decision which we have duly taken into consideration has certainly no relevance to the issue in adjudication in the instant case. Further, in the case of Shriram Investments Ltd. (supra.), the decisions in the case of Suryalatha Spg. Mills Ltd. (supra) and Petinar Steels Ltd.s (supra) were not brought to the notice of the Tribunal (as has also been even in the proceedings in the instant appeals which was noticed only by the Tribunal on its own while perusing the record and case laws for adjudication), which itself perfectly justified that the said decision is distinguishable. Unless and until there is sufficient reason compelling the Tribunal to take a different view, the decision of other High Courts must be followed and should not be ignored for the reason that the concerned Bench of the Tribunal does not come under its territorial jurisdiction. This view is strengthened by the decisions in the cases of 'Maganlal & Mohanlal Panchal (HUF) (supra) and Deepak Family Trust (supra). The aforesaid decision of the Andhra Pradesh High Court explains the basis of assessment and the chargeability of income to tax under the scheme of the Act. It is important to note that there is no decision of any other High Court on the issue in question. Hence, that decision has been carefully followed by us and the assessee has also been given opportunity of being heard as requested in these miscellancous petitions the stand of whom we are not convinced with after our careful and judicial analysis of the issue in question. Indeed, as submitted by the Revenue, the better wisdom of the court below must yield to the brighter wisdom of the court above as strengthened by the ratio deciddendi; In the case of Dunlop Indid Ltd. (supra), otherwise ignoring the decision of a High(er) Court in the absence of any contrary decision would tantamount to demeaning the authority of law and hierarchy of courts.
36.4 As has been stated by my learned Brother, the answer furnished in our impugned order dated 29-4-1997 holds good in respect of the stand of the assessee relating to introduction of the provisions in sections 10A(4)(iv) and 10B(4)(iv) of the Act. Similarly so the answer furnished in para 10 of the impugned order holds good regarding applicability of the decision in the case of Madeva Upendra Sinai (supra). The Assessing Officer computed the income for the years 1989-90 to 1991-92 as per the decision in the case of Madeva Upendra Sinai (supra) regarding section 43(6) of the Act and allowed depreciation to the assessee. The assessee accepted such assessment and determination of WDV of assets for all the years had become final which cannot, therefore, be challenged again by the assessee in the year 1992-93. In other words, the assessee has no right to agitate in the appeal for the year 1992-93 the issues pertaining to the earlier years of 1989-90 to 1991-92 which have become final.
36.5 It is true that the stand of the assessee is entirely contrary to the scheme of the Act regarding computation of income under section 143(3) as explained in the case of Suryalatha Spg. Mills Ltd. (supra). No argument has been advanced by the assessee to specify how the case is not applicable to the assessee's case in so far as the scheme of assessment and charging of tax were concerned. The Hon'ble Andhra Pradesh High Court held that the assessing authority had to determine the income of a company under the normal provisions of the Act relating to regular computation of income and next that the book profit has to be worked out as per the Explanation to section 115J(A). A plain reading of sub-section (2) thereof makes it clear that the quantum of unabsorbed losses, unadjusted depreciation, etc., for the purpose of carrying forward, has to be under the provisions of the Act irrespective of the quantum of income determined under section 115J(I). There was no need to make such a provision in section 115J as has been made in section 44AD(3). While the object of section 44AD is to determine the income from profits and gains of business of any assessee carrying on the business of civil construction or supply of labour therefor under regular assessment as defined under section 2(40) of the Act, the purpose of section 115J is not to determine the income by way of regular assessment but to tax certain companies at 30 per cent of book profits. Hence, the objects and purposes of these two provisions are totally different and the comparison of these two sections as urged by the assessee are therefore misconceived.
36.6 Even assuming that the decisions in the case of Pennar Steels Ltd. (supra) and Suryalatha Spg. Mills Ltd.'s case (supra) (APHC) do not directly deal with the determination of actual cost of an asset, they have a direct bearing on the issue regarding deduction of depreciation and determination of WDV while completing the assessment under section 143(3) when determination of actual cost or WDV is part of assessment proceedings. Hence, the assessee's stand that these two decisions do not deal with the determination of the actual cost or WDV or deduction of depreciation' of assets while completing the assessment under section 143(3), does not hold water. The Hyderabad Bench of the Tribunal in the case of Pennar Steels Ltd. (supra) held that under the scheme of the Act the depreciation allowance under section 32 is to be considered only while completing the assessment under section 143(3) and that once the depreciation is allowed on asset, while completing the assessment, then there is no provision to go back to earlier years for determining actual cost or WDV of assets other than that determined in assessment under section 143(3) of the relevant assessment year.
36.7 Regarding the decision in the case of Gajendra Narain (supra) relied upon by the assessee, where the case was reposted for hearing, it has to be stated here that the assessee herein has been fully and sufficiently beard in these miscellaneous petitions also even on the merits of the appeal again, particularly pertaining to the decisions over which the assessee demanded to have opportunity of being heard. In my humble opinion and with great respect to my learned Brother, I am unable to agree with his views mentioned particularly in paragraph 18 of his order that the Tribunal is not required to issue show-cause notice to a party as to why a particular decision of the High Court should not be followed and that if the assessee's counsel is not aware of a contrary decision of a particular High Court, then it is not the duty of the Tribunal to bring to his notice such a decision of the particular High Court and then invite arguments thereon, and further that if the counsel may not be aware of various decisions relating to the issues in appeal, it does not mean that the Tribunal is bound to furnish him the list of cases which the Tribunal wanted to follow or apply on the relevant issue. Furthermore, my learned Brother has viewed in paragraph 18.3 that it is impracticable to give notice to the assessee or his counsel of particular decision of the High Court or Supreme Court and then invite arguments on the point as to why a particular decision of High Court should not be followed in deciding the assessee's appeal and that it would otherwise lead to multiplicity of proceedings and wastage of time leading to undue delay in deciding the appeals. As has already been observed by me, I am unable to agree with his aforesaid views with due regard to the Hon'ble Accountant Member.
36.8 In my carefully considered opinion if the Tribunal comes across any decision after the hearing is over and opines that such decision has an impact over the issue in question, it is the primary and legal duty of the Tribunal to repost the case for hearing and get the clarification or the view of the learned counsel on both sides over such case laws, which were neither cited by any of the parties nor queried by the Bench over it in the course of the hearing. True, as observed by my learned Brother, what is required under the provisions of section 254(1) is that the Tribunal shall give both the parties to the appeal opportunity of being heard. This does not mean that either or both the parties are not entitled to be heard over a case law on which the Tribunal relies upon. The view that affording such opportunity would result in multiplicity of proceedings and wastage of time, either or both the parties to the legal proceedings are not concerned with. Even though, if it would be resulting in multiplicity of proceedings, the Tribunal is bound to entertain it. It is also neither correct nor proper to say that there is wastage of time, as the Tribunal is relying upon a decision which is adverse to one of the parties before it over which no opportunity has been given at all to the parties particularly the aggrieved. If the aforesaid view expressed by my learned Brother is accepted, then the meaning of the words "opportunity of being heard" enshrined under section 254(1) of the Act is lost altogether and further that no hearing in any appeal need be had and the Bench can on its own pass an order without hearing at all as the facts and issues of the case are available on record along with the order of assessment and the first appellate order, while the case laws and the interpretation of statutes as well as the provisions of the Act are all available in the law journals, reports and statute book. Furthermore, the counsel on either sides in a legal proceedings are learned in law as well as the Judges of the court are also knowledgeable in law, and yet the learned counsel on both sides agitate before a legal forum and still the learned Judges of a Bench differ from each other inspite of the fact that the learned Members of the Bar and the Bench are exponents in law. Furthermore evidence is that inspite of the cases being argued with full opportunity of being heard even in High Courts different views are held not only by different High Courts but also by the same High Court sometimes over the same issue conflicting with the other, besides the Hon'ble Supreme Court too changes its view on a particular issue subsequently when same issue is cropping up again after hearing the parties, on the principle that to perpetuate an error is no heroism, to rectify it is the compulsion of the judicial conscience. Multiplicity of proceedings and wastage of time cannot come as hindrance to a Tribunal or Court, i.e., judiciary while rendering justice as those are to be, if at all, bothered by only the other wings of the Government, i.e., Legislature and Executive for curtaining such multiplicity and wastage by suitable and effective measures taken in accordance with law. Hence, I am of the firm view that not hearing the parties over certain facts or provisions of law or case law taken in aid by a court over which parties are not heard would certainly amount. to violation of principles of natural justice which might. also be termed as mistake apparent from record-as they have bearing on the issue in question. However, it has been set right by us as the assessee has been heard in these miscellaneous petitions, as has been already stated, over those case laws on which opportunity of being heard was demanded and decision has also been rendered herein, after hearing both the parties distinguishing, being in fact actually so, the case law laid down by the Madras Bench of the Tribunal relied upon by the assessee and sustaining the applicability of the decisions rendered bv the Hyderabad Bench of the Tribunal as well as the Hon'ble Andhra Pradesh High Court as discussed in the orders of both the Members.
36.9 Under these circumstances of distinctions discussed, the decision rendered by the Madras Bench is not apt or relevant befitting to the actual facts over the issue in question in this case especially when viewed in the light of the decision of the Hyderabad Bench of the Tribunal and more particularly of the decision of the Hon'ble Andhra Pradesh High Court. In the ultimate analysis any mistake apparent from record is unable to be found for recalling to reverse the order dated 29-4-1997 of the Tribunal, while if it would be urged that there is mistake of law, it is another matter which cannot be entertained in these miscellaneous petitions but may be elsewhere.
36.10 Such conclusions referred to above with detailed reasons we have arrived at are after duly considering copious case laws of different High Courts and Supreme Court torrentially showered by both the parties taking us thus for a 'Bharat Darshan' of decisions - particularly by the assessee's learned counsel who in the course of his arguments replied the queries of the Bench though with avoidable impatience disregarded by us having due regard to his age, knowledge and experience at the Bar and after patiently hearing his thought provoking erudite submissions for several hours on several days during several weeks which led us for even several months to a long deliberation between us, as well as after our claim analysis of the totality of the facts and the entirety of the circumstances of the instant case over the issue in adjudication taking crystallization amidst our careful perusal of records and our detailed discussions, though these are miscellaneous petitions, giving also proper care to all the decisions including co-ordinate Benches and also to the proposed order of my learned Brother nd showing meticulous attention, as given in every case, to each aspect of the issue involved in the instant case too, all of which resulting in these elongated orders running four times that of the appeals, without causing miscarriage of justice in any event.
37. In the result, the assessee's miscellaneous petition is disposed of' accordingly, thus, the dismissal of assessee's appeal standing confirmed.