JUDGMENT IN HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 38 of 2001 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ===========================================================
1 Whether Reporters of Local Papers may be allowed to see judgment ? 2 To be referred to Reporter or not ? 3 Whether their Lordships wish to see fair copy of judgment ? 4 Whether this case involves substantial question of law as to interpretation of Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to civil judge ? ================================================================ DY. C. I. T.....Appellant(s) Versus JUPITER CEMENT IND. LTD.....Opponent(s) ================================================================ Appearance: MR PRANAV G DESAI, ADVOCATE for Appellant(s) No. 1 RULE SERVED for Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Date : 25/11/2014 Page 1 of 6 HC-NIC Page 1 of 6 Created On Sat May 07 11:07:59 IST 2016 O/TAXAP/38/2001 JUDGMENT ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. By way of this appeal, appellant revenue has challenged order dated 31.08.2000 passed by Income Tax Appellate Tribunal, Rajkot Bench [for short ITAT ] in ITA No.1524/Ahd/1996, whereby appeal filed by revenue was dismissed by Tribunal. 2. short facts of this case are that respondent assessee is limited Company and engaged in business of manufacturing of cement. assessee filed its return of income for Assessment Year 1994 95 on 14.11.1994, declaring total income loss of Rs.451.71 Lakhs. While passing order under Section 143(1)(a) of Income Tax Act, Assessing Officer made addition of Rs.5,12,62,300/ in respect of accrued interest on term loan from financial institutions, which were debited to profit and loss account, but were not paid to said financial institutions. Assessing Officer acting on assessee s letter dated 10.08.1995 rectified order under Section 143(1)(a) by reducing disallowance under Section 43B to extent of Rs.61,04,000/ . 2.1. Being aggrieved by order of Assessing Officer, assessee filed appeal before Commissioner of Income Tax (Appeals). CIT(A) allowed said appeal of assessee. Against Page 2 of 6 HC-NIC Page 2 of 6 Created On Sat May 07 11:07:59 IST 2016 O/TAXAP/38/2001 JUDGMENT said order, revenue has filed appeal before ITAT. ITAT after hearing parties dismissed said appeal. Hence, this appeal is filed at instance of revenue. 3. While admitting this appeal on 27.02.2001, Court had formulated following substantial questions of law: (A) Whether on facts and in circumstances of case, Appellate Tribunal has substantially erred in law in confirming order passed by CIT(Appeal) admitting additional evidence in contravention of Rule 46 A, by directing Assessing Officer to consider contents of alleged letter dated March 19, 1995 and to re compute additional tax accordingly, without giving any opportunity to Assessing Officer ? (B) Whether on facts and in circumstances of case, appellate Tribunal has substantially erred in law in confirming order passed by CIT(Appeal) when aseesee had filed application for rectification under Section 154 dated August 10, 1995 wherein no mention of alleged letter dated March 19, 1995 was made ? Page 3 of 6 HC-NIC Page 3 of 6 Created On Sat May 07 11:07:59 IST 2016 O/TAXAP/38/2001 JUDGMENT 4. Learned advocate for appellant revenue has submitted that both authorities below have committed error in deciding matter. He further submitted that ITAT has not properly appreciated material available on record, therefore, he urged to allow this appeal. 5. On other hand, learned advocate for respondent assessee has supported impugned order of ITAT and submitted that view taken by authorities below is just and proper and no interference is required to be called for by this Court. 6. We have heard learned advocates appearing for both parties and perused material on record. ITAT while deciding appeal in paragraph No.5 has observed as under: 5. After going through materials on records and arguments of ld. Departmental Representative we find that Assessing Officer made addition under Section 143(1) (a) in respect of accrued interest on term loans from financial institutions, which were debited to profit and loss account, but were not paid to said financial institutions. CIT(A) observed that letter dated 19.3.95 was not taken into consideration in spite of its service on Assessing Officer. Subsequently, CIT(A) also observed that for want of proper checking of record assessee should not suffer. CIT(A) was convinced that said letter was served upon Assessing Officer. basic of this belief is original postal receipt of Page 4 of 6 HC-NIC Page 4 of 6 Created On Sat May 07 11:07:59 IST 2016 O/TAXAP/38/2001 JUDGMENT said UPC letter and its corresponding entry dispatch register of Assessee company. There is no question of entertaining any new evidence as same was already on record of Assessing Officer. CIT(A) also observed that as per provisions of Section 139(1) if any person having furnished return u/s.139(1) discovers any omission or any wrong statement there in, he may furnish revised return at any time before, expiry of one year, from end of relevant Asstt. Years or before completion of assessment order, whichever is earlier. assessee vide its letter dated 19.03.1995 had duly intimated Assessing Officer about wrong statement in original return of income before intimation under Section 143(1)(a) was passed and had also furnished revised computation of income with request to treat original return, revised to that extent. Under above mentioned circumstances CIT(A) has rightly directed Assessing Officer to recompute additional tax. Accordingly, no intereference is required from our side. 7. In view of aforesaid, we are in complete agreement with view taken by Tribunal. It appears that both authorities namely Commissioner of Income Tax as well as Tribunal have found that assessee had intimated Assessing Officer about wrong statement given by him at time of filing of return of income, but same was not considered by Assessing Officer. 8. In that view of matter, we are of considered opinion that view taken by Tribunal is just and proper and we do not find any reason to Page 5 of 6 HC-NIC Page 5 of 6 Created On Sat May 07 11:07:59 IST 2016 O/TAXAP/38/2001 JUDGMENT interfere with findings recorded by Tribunal. Apart from that, learned advocate for appellant revenue is not in position to show anything from record how findings of Tribunal is bad in law and on facts. Therefore, present appeal deserves to be dismissed and same is accordingly dismissed. question posed in this appeal is answered in favour of assessee and against revenue. (K.S.JHAVERI, J.) (K.J.THAKER, J) pawan Page 6 of 6 HC-NIC Page 6 of 6 Created On Sat May 07 11:07:59 IST 2016 Dy. C.I.T v. Jupiter Cement Ind. Ltd