IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 10873 OF 2011 COMMISSIONER OF INCOME TAX, DELHI ... Appellant VERSUS M/s. SI GROUP INDIA LTD. ... Respondent WITH CIVIL APPEAL NO. 10874 OF 2011 O R D E R By impugned judgment dated 10.06.2010, Division Bench of Bombay High Court has decided following issue in favour of respondent-assessee herein: - Whether on facts and in circumstances of case and in law, Hon'ble High Court erred in holding that since assessee's payment to SICOM had not been accepted by Sales Tax Authorities, same cannot be held to be remission/cessation of liability u/s 41(1)(a), even though Maharashtra Sales Tax Tribunal had granted liberty to assessee to take credit for payment of sales tax after filing proper documents. aforesaid issue arose in following circumstances: assessee has set up unit at District Raigad in Maharashtra which is notified area. By virtue of packaged incentives scheme by Government of Maharashtra, assessee became entitled to collect sales tax from customers and defer Signature Not Verified its payments to State Government. Under Digitally signed by ASHWANI KUMAR Date: 2015.11.18 15:31:01 IST Reason: aforesaid scheme, assessee was entitled to pay sales tax so collected in five equal installments starting from C.A. No. 10873/2011 etc. 1 April 20, 2010. In return filed by assessee, deduction towards sales tax was claimed. Assessing Officer, however, disallowed same while applying provisions of Section 41(1)(a) of Income Tax Act, 1961 (hereinafter referred to as 'Act') on ground that said sales tax had not been remitted to State Government. appeals of assessee till stage of Income Tax Appellate Tribunal failed. However, decision of Income Tax Appellate Tribunal has been reversed by High Court by way of impugned judgment. We may note that main contention of respondent-assessee herein before High Court was that principal requirement for applicability of Section 41 of Act is that assessee must obtain benefit in respect of trading liability by way of remission or cessation thereof. He argued that in present case, there was no cessation of liability of assessee in respect of payment of sales tax dues and even if there was such cessation, no benefit was obtained by assessee. This contention was supported by fact that issue pertaining to sales tax liability was decided by Sales Tax Tribunal by its judgment dated 08.02.2008 and Tribunal has specifically upheld decision of assessing authorities declining to grant credit to assessee of payment which was made to State Industrial and Investment Corporation of Maharashtra Limited (SICOM) of Maharashtra. This contention is accepted by High Court C.A. No. 10873/2011 etc. 2 in following manner: - 10. net result of order of Sales Tax Tribunal dated 8th February 2008 is to uphold decision of assessing authority declining to grant credit of payment made by assessee to SICOM towards discharge of deferred sales tax liability. As matter of fact, on 22 nd July 2008 notice of demand was issued under Section 38 of Bombay Sales Tax Act of 1959 to assessee by Deputy Commissioner of Sales Tax, Navi Mumbai in total amount of Rs. 1,33,13,555/-. Having regard both to order passed by Sales Tax Tribunal on 8th February 2008 and notice of demand issued on 22nd July 2008, it is not possible for Court to accept contention that there was remission or cessation of liability. Since record before Court does not disclose that there was remission or cessation of liability, one of requirements spelt out for applicability of Section 41(1)(a) has not been fulfilled in facts of present case. In view of aforesaid facts, which clearly demonstrate that assessee had not been granted benefit of said cessation for Assessment Years in question, High Court has rightly held that one of requirements for applicability of Section 41(1)(a) of Act had not been fulfilled in present case. We, thus, do not find any error in order of High Court. appeals lack any merit and are, accordingly, dismissed. ......................., J. [ A.K. SIKRI ] ......................., J. [ ROHINTON FALI NARIMAN ] New Delhi; November 04, 2015. C.A. No. 10873/2011 etc. 3 ITEM NO.103 COURT NO.13 SECTION IIIA SUPREME COURT OF INDIA RECORD OF PROCEEDINGS Civil Appeal No. 10873/2011 C.I.T DELHI Appellant(s) VERSUS M/S SI GROUP INDIA LTD. Respondent(s) WITH C.A. No. 10874/2011 Date : 04/11/2015 These appeals were called on for hearing today. CORAM : HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN For Appellant(s) Mr. K. Radhakrishnan, Sr. Adv. Mr. Arijit Prasad, Adv. Ms. Sadhana Sandhu, Adv. Ms. Swarupama Chaturvedi, Adv. Ms. Natasha Vinayak, Adv. Mr. S. A. Haseeb, Adv. Ms. Anil Katiyar, Adv. Mr. B. V. Balaram Das, Adv. For Respondent(s) Mr. Jehangir D. Mistri, Sr. Adv. Mr. Niraj Sheth, Adv. Mr. Rustom B. Hathikhanawala, Adv. UPON hearing counsel Court made following O R D E R appeals are dismissed in terms of signed order. (Nidhi Ahuja) (Renu Diwan) COURT MASTER COURT MASTER [Signed order is placed on file.] C.A. No. 10873/2011 etc. 4 Commissioner of Income-tax, Delhi v. M/s. SI Group India Ltd