Herdillia chemicals Limited v. The Commissioner of Income-tax, City-­III, Mumbai
[Citation -2017-LL-0929]

Citation 2017-LL-0929
Appellant Name Herdillia chemicals Limited
Respondent Name The Commissioner of Income-tax, City-­III, Mumbai
Court HIGH COURT OF BOMBAY
Relevant Act Income-tax
Date of Order 29/09/2017
Judgment View Judgment
Keyword Tags investment allowance • straight line method • statutory deduction • written down value • surtax liability • additional tax • excess amount • charge of tax
Bot Summary: Crediting the amount of depreciation into books of account, does not mean that the differential amount is credited to the reserves of the company. Rule 1 says that subject to other provisions contained in the schedule namely Second Schedule, the capital of a company shall be the aggregate of the amounts, as on the first day of the previous year relevant to the assessment year of and for that purpose we reproduce Rule 1 with clauses thereof : its paid up share capital; its reserves, if any, created under the proviso to clause of sub section of section 10 of the Indian Income Tax Act, 1922 or under sub section of Section 32A, or sub section of Section 34 of the Income tax Act, 1961; its other reserves as reduced by the amounts credited to such reserves as have been allowed as a deduction in computing the income of the company for the purposes of the Indian Income tax Act, 1922 or the Income tax Act, 1961. Where a company has not made any credit in any account in its books as on the first day of the previous year relevant to the assessment year which is of the nature of item or item under the heading Current Liabilities and Provisions' in the column relating to Liabilities' in the Form of Balance Sheet', given in Part I of Schedule VI to the Companies Act, 1956, or where the Income tax Officer is of opinion that the amount credited in such account falls short of the amount which should have reasonably been credited by it the amount of its capital as computed under rule I shall be reduced by the amount which has not been so credited or, as the case may be, the amount of such shortfall. Whether, on the facts and in the circumstances of the case, the entire difference between the depreciation actually allowed to the assessee for the assessment year 1964 65/1965 66, and actually provided in the accounts of the year concerned should be deducted from the respective general reserves' amounts of Rs.7,50,000/ and Rs.37,00,000/ and the balance amount should be taken into account in the capital computation base for the year concerned 3. As the assessee company provided lesser amount by way of depreciation than what was allowed in the computation of the income of the assessee company for purposes of the Income tax Act, 1961, the difference between the amount of depreciation actually allowed to the assessee and the amount actually provided in its books, was forming part of the general reserve. For computing its income for the purposes of the Income tax Act such larger amount of depreciation was allowed and the excess amount, i.e. the amount of difference between the amount of depreciation actually allowed for the purposes of the Income tax Act and the amount of depreciation actually provided in the books of the assessee company, was diverted as forming part of the general reserve and actually the amounts that were credited to the general reserve included within its item such difference between the amount of depreciation allowed for the purposes of Income tax Act and the amount of depreciation actually provided in the books. 2000 amount of depreciation allowed as deduction, was in excess of the amount of depreciation charged on the tax of amount of the assessee.


IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX REFERENCE NO.164 OF 2000 M/s.Herdillia chemicals Limited, 18th Floor, Air India Building, Nariman Point, Mumbai 400 021 Applicant versus Commissioner of Income Tax, City III, Mumbai Respondent Mr.Niraj Seth i/by Mr.Rajesh Shah for applicant. Mr.A.R.Malhotra with Mr.N.A.Kazi for respondent. CORAM : S.C.DHARMADHIKARI AND PRAKASH D. NAIK, JJ. DATE : 29th September 2017 ORAL JUDGMENT (Per : S.C.Dharmadhikari, J.) : 1. Income Tax Appellate Tribunal, Mumbai Bench `C', Mumbai, at instance of assessee, has forwarded following questions for opinion of this Court : 1. Whether on facts and in circumstances of case and in law Tribunal was justified in upholding deduction of amount of depreciation differential of Rs.2,43,11,321/ from capital ? 2. Whether on facts and in circumstances of case and in law, Tribunal was justified in applying devision of Supreme Court in case of Zenith Ltd. Vs. CIT (200 ITR 572 SC) without considering assessee's claim relating to deletion of depreciation differential consequent upon distribution of dividends from year to year ? ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 2 of 16 ITR.164.2000 3. Whether in upholding deduction of amount of depreciation differential from capital, Tribunal has omitted to consider relevant material ? 2. Mr.Seth appearing on behalf of assessee contended that matter must really go back to Tribunal. He would submit that Tribunal has not decided matter in accordance with provisions of law and which were pressed into service in backdrop of facts. He would submit that decision of this Court in case of Commissioner of Income Tax, Bombay City III Vs. Zenith Steel Pipes Limited reported in (1978) 112 ITR 215 (Bombay) was not concerned with that aspect of matter, which was highlighted by assessee. Division Bench while deciding Zenith Steel (supra) matter rested its conclusion on one aspect of matter and that is with regard to deduction for purposes of charge of Surtax. Mr.Seth inviting our attention to charging provision, would submit that Surtax Act states that subject to provisions contained therein, there shall be charged on every company for every assessment year commencing on and from 1 st April 1964 but before first day of April 1988, tax referred to as Surtax, in respect of so much of its chargeable profits of previous year or previous years, as case may be, as exceed statutory deduction, at rate specified in third schedule. After inviting our attention to definitions of term `Chargeable Profits' appearing in Section 2(5) and definition of term `Statutory Deduction' as defined in Section 2(8) of Surtax Act, it is submitted that second schedule is referable to Section 2(8) of Surtax Act. second schedule of Surtax Act prescribes rules for computing capital of company for purposes of Surtax. ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 3 of 16 ITR.164.2000 3. Mr.Seth would submit that capital of company shall be aggregate of amounts mentioned in Rule 1(i), (ii) and (iii) of Second Schedule of Surtax Act. As far as we are concerned, Rule 1(iii) would be applicable. Thus, other reserves as reduced by amounts credited to such reserves as have been allowed as deduction in computing income of company for purposes of Indian Income Tax Act, 1922 or Income Tax Act, 1961, would be capital of company. That is how definition of term `Statutory Deduction' would have to be understood. 4. Mr.Seth submitted that Tribunal erroneously held that judgment of this Court in Zenith Steel Pipes (supra) concludes issue. However, in case of Zenith Steel Pipes (supra), applicability of later part of Rule 1(iii) was not in issue. Therefore, other reserves as reduced by amounts credited to such reserves as have been allowed as deduction in computing income of company, would alone be part of aggregate and therefore, can be capital of company. In instant case, there has been no satisfaction of this part namely crediting of reserves of amount which have been allowed as deduction in computing income of company. Therefore, Tribunal should have accepted plea of rectification of mistake and then re heard matter. Sine that has not been done, we must grant his request is submission. 5. precise argument is that in present case there was depreciation claim. amount of depreciation is credited to books of accounts. However, that amount should be credited to ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 4 of 16 ITR.164.2000 reserves. Crediting amount of depreciation into books of account, does not mean that differential amount is credited to reserves of company. Alternatively, if amount, instead of crediting to reserves, is already spent on dividends, then, same will not form part of reserves within meaning of clause (iii) of Rule 1. Mr.Seth, therefore, attempted to distinguish judgment in case of Zenith Steel Pipes (supra). 6. On other hand, Mr.Malhotra, learned counsel appearing on behalf of revenue, would submit that matter stands concluded in favour of revenue and against assessee. If Mr.Seth's argument and request is accepted, that would mean adding something to provision or reading into it something which is expressly not there. If second schedule and rules therein and particularly Rule 1(iii) are read, there is no scope for accepting alternate argument of Mr.Seth as well. There is nothing in this rule which would unable assessee to argue that reserves, as depleted by payment of dividend, should be reduced. These are words read into by assessee and Legislature has not provided for anything other than words specifically inserted therein. For all these reasons he would submit that questions be answered against assessee and in favour of revenue. 7. For properly appreciating rival contentions, we must note facts. assessee before us is public limited company. accounting year for surtax assessment is 1986 87. Under Surtax Act, capital of assessee as on first day of accounting year namely 1 st July 1984 was to be computed. capital was computed by taking into consideration fact that ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 5 of 16 ITR.164.2000 assessee charges depreciation in its books of account under straight line method, which is permitted under Companies Act, 1956. However, under provisions of Income Tax Act, 1961, assessee is required to claim deduction for depreciation only on basis of written down value and in income tax assessment, depreciation is allowed on written down value basis. As consequence of two different methods of computing depreciation, there was difference in quantum of depreciation as per books of account and depreciation as per income tax assessment. This also resulted into diminished value under straight line method exceeding corresponding diminished value under written down value basis, over years. position on 1 st July 1984 was noted and difference was worked out at Rs.2,43,11,321/ . In spite of objection of assessee, assessing officer reduced this amount from capital. This exercise of assessing officer was confirmed in appeal by Commissioner (Appeals) by relying on decision of this Court in Zenith Steel Pipes (supra). 8. Before Tribunal argument was that this decision is distinguishable on facts, particularly because in instant case entire differential which would have swelled reserve, had been depleted by amount of dividend declared over years. Tribunal did not agree. assessee moved miscellaneous application seeking to rectify mistake and then relying upon order passed by Tribunal's coordinate Bench at Madras. coordinate Bench of Tribunal distinguished view taken by this Court in Zenith Steel Pipes (supra). That is how Mr.Seth would submit that once coordinate Bench of Tribunal at Madras had taken different view, then, interest of justice and fairness ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 6 of 16 ITR.164.2000 demanded that Tribunal should have re heard matter and re considered issue. When that request was even refused, then he would submit that we must remand case. 9. We are unable to agree with Mr.Seth for more than one reason. charge of tax appearing in Section 4 means as under : 4. Charge of tax Subject to provisions contained in this Act,there shall be charged on every company for every assessment year commencing on and from first day of April, 1964 (but before first day of April, 1988), tax (in this Act referred to as surtax) in respect of so much of its chargeable profits of previous year or previous years, as case may be, as exceed statutory deduction, at rate or rates specified in third Schedule. Thus, there shall be charged on every company for every assessment year commencing on and from 1 st April 1964 but before 1st April 1988 tax which is referred to as Surtax, in respect of so much of its chargeable profits of previous year or previous years, as case may be, as exceed statutory deduction, at rate or rates specified in third schedule. definitions are contained in Section 2 and we are concerned with terms `chargeable profits' and `statutory deductions'. term `chargeable profits' is defined in Section 2(5) to mean that total income of assessee computed under Income Tax Act, 1961 (43 of 1961) for any previous year or years, as case may be, and adjusted in accordance with provisions of First Schedule. term `statutory deduction' is defined in Section 2(8) to mean : amount equal to fifteen per cent of capital of company as computed in accordance with provisions of Second Schedule, or amount of two hundred thousand rupees, whichever is greater : ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 7 of 16 ITR.164.2000 Provided that where previous year is longer or shorter than period of twelve months, aforesaid amount of fifteen per cent or, as case may be, of two hundred thousand rupees shall be increased or decreased proportionately : Provided further that where company has different previous years in respect of its income, profits and gains, aforesaid increase or decrease, as case may be, shall be calculated with reference to length of previous year of longest duration; and (9) all other words and expressions used herein but not defined and defined in Income Tax Act shall have meanings respectively assigned to them in that Act. 10. perusal of this definition would indicate that statutory deduction means amount equal to 15% of capital of company as computed in accordance with provisions of Second Schedule, or amount of Rs.2,00,000/ , whichever is greater. Once charging section says that this tax is in respect of so much of its chargeable profits of previous year or previous years, as case may be, as exceed statutory deduction, at rate or rates specified in Third Schedule, and chargeable profits means total income of assessee computed under Income Tax Act for any previous year and years, and adjusted in accordance with provisions of First Schedule, we cannot rest our opinion only by reading these two provisions namely Section 4 and Section 2(5), because tax is in respect of so much of its chargeable profits of previous year or previous years, as case may be, as exceed statutory deduction. Therefore, we reproduced Section 2(8) and which defines term `statutory deduction'. ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 8 of 16 ITR.164.2000 11. Now, rules in Second Schedule for computing capital of company for purpose of Surtax have to be referred. Rule 1 says that subject to other provisions contained in schedule namely Second Schedule, capital of company shall be aggregate of amounts, as on first day of previous year relevant to assessment year of and for that purpose we reproduce Rule 1 with clauses thereof : (i) its paid up share capital; (ii) its reserves, if any, created under proviso (b) to clause (vib) of sub section (2) of section 10 of Indian Income Tax Act, 1922 (11 of 1922) or under sub section (4) of Section 32A, or sub section (3) of Section 34 of Income tax Act, 1961 (43 of 1961); (iii) its other reserves as reduced by amounts credited to such reserves as have been allowed as deduction in computing income of company for purposes of Indian Income tax Act, 1922 or Income tax Act, 1961. (1A) Where company has not made any credit in any account in its books as on first day of previous year relevant to assessment year which is of nature of item (8) or item (9) under heading `Current Liabilities and Provisions' in column relating to `Liabilities' in `Form of Balance Sheet', given in Part I of Schedule VI to Companies Act, 1956, or where Income tax Officer is of opinion that amount credited in such account falls short of amount which should have reasonably been credited by it amount of its capital as computed under rule I shall be reduced by amount which has not been so credited or, as case may be, amount of such shortfall. Explanation For purposes of this rule, amount of credit which should have reasonably been made by ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 9 of 16 ITR.164.2000 company in relation to any account of nature of item (9) aforesaid, means amount of dividend declared or paid by company, on or after first day of previous year relevant to assessment year, for previous year immediately preceding first mentioned previous year. 12. argument is that aggregate of paid up share capital, reserves, other reserves would mean capital of company. However, other reserves have to be reduced by amounts credited to such reserves as have been allowed as deductions in computing income of company for purpose of income tax. 13. In Zenith Steel Pipes (supra), this Court was required to answer three questions placed for its opinion. All questions are relevant for our purposes and we reproduce them hereinbelow : 1. Whether, on facts and in circumstances of case, sums of Rs.4,20,000/ and Rs.5,59,756/ being dividend recommended by board of directors of assessee for respective years ended 30th April, 1963, and 30th April, 1964, were to be treated as part of `other reserves' for purpose of computation of capital base for year concerned ? 2. Whether, on facts and in circumstances of case, entire difference between depreciation actually allowed to assessee for assessment year 1964 65/1965 66, and actually provided in accounts of year concerned should be deducted from respective `general reserves' amounts of Rs.7,50,000/ and Rs.37,00,000/ and balance amount should be taken into account in capital computation base for year concerned ? 3. Whether, on facts and in circumstances of case, for purpose of computation of `other reserves' under rule 1(iii) of Second Schedule to ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 10 of 16 ITR.164.2000 Companies (Profits) Surtax Act, 1964, deduction for depreciation under Income tax Act for assessment years 1964 65 and 1965 66 could be said to have been allowed to assessee as on respective first day of previous year concerned, even though, factually, its income tax assessments for said assessment years were completed after respective first day of previous year ? 14. Hon'ble Division Bench noted relevant facts. It held that two questions arise out of Surtax liability for A.Y.1965 66 and 1966 67. balance sheet and profit and loss account as prepared by company in manner noted by Bench, were ultimately approved by shareholders. depreciation was worked out by same method namely straight line method. Income Tax Officer held that company ought to have provided sum of Rs.17,39,255/ by way of depreciation and what has been actually provided was lesser than that which ought to have been provided. He took view that whole of sum which was transferred to general reserve was not liable to be taken into account in computation of capital as on 1st May 1963. This was view also for A.Y.1966 67. However, appellate authority which was approached, had to decide two contentions, one of which was that conditions in clause (iii) of Rule 1 of Second Schedule have to be satisfied. Mr.Seth relies upon these conditions but would read something further in them. Division Bench held as under : ... two questions which are for our consideration, one at instance of revenue and other at instance of assessee, depend upon interpretation of provisions contained in clause (iii) of rule 1 of Second Schedule to Act. Under section 4, which is charging section of Act, surtax is leviable in respect of so much of chargeable profits of ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 11 of 16 ITR.164.2000 company of previous year or previous years, as case may be, as exceed statutory deduction, at rate or rates specified in Third Schedule. expression statutory deduction is defined in section 2(8) as meaning amount equal to ten per cent of capital of company as computed in accordance with provisions of Second Schedule or amount of two hundred thousand rupees, whichever is greater. There are two provisions to this definition but they are not relevant for present purpose. Second Schedule lays down rules for computation of capital of company for purpose of surtax. We are concerned in present case with provisions of clause (iii) of rule 1 and its provisions are as under : 1. Subject to other provisions contained in this Schedule, capital of company shall be aggregate of amounts, as on first day of previous year relevant to assessment year, of (i) its paid up share capital; (ii) its reserves, if any, created under proviso (b) to clause (vib) of sub section (2) of section 10 of Indian Income tax Act, 1922, or under sub section (3) of section 34 of Income tax Act, 1961; (iii) its other reserves as reduced by amounts credited to such reserves as have been allowed as deduction in computing income of company for purposes of Indian Income tax Act, 1922, or Income tax Act, 1961 ...' sum of Rs.7,50,000 which stands to credit of general reserve as on May 1, 1963, and sum of Rs.37,00,000 which stands to credit of general reserve as on May 1, 1964, are other reserves within meaning of clause (iii). short question that we have to consider is whether in computation of capital entire amount of other reserves is to be included or any deduction has to be made therefrom for two respective years in view of provisions contained in clause (iii). If regard be had to very plain language used in clause ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 12 of 16 ITR.164.2000 (iii), it is very clear that entire amount of other reserves is not to be included in computation of capital but it is balance of amount of other reserves as subjected to deductions therein provided which is to be included. reduction has to be made by amounts credited to such reserves as have been allowed as deduction in computing income of company for purposes of Indian Income tax Act, 1922, or Income tax Act, 1961. It is common ground and it cannot be disputed having regard to facts determined by taxing authorities and Tribunal that assessee, as it was following straight line method of depreciation, provided depreciation at amount lesser than that was permitted to it in its assessment under Indian Income tax Act. For year ending April 30, 1963, it merely provided sum of Rs.4,86,298 as and by way of depreciation while Appellate Assistant Commissioner found as fact that assessee company was entitled to provide Rs.10,54,410 by way of depreciation in respect of its profits for period ending April 30, 1963. Similarly, aggregate depreciation provided as on April 30, 1964, in books of assessee company was Rs.12,72,908 while Appellate Assistant Commissioner allowed by way of depreciation up to that year sum of Rs.27,59,923. Thus for year ending April 30, 1963, sum of Rs.5,68,112 was allowed as depreciation in addition to sum provided in books of assessee company, while for year ending April 30, 1964, sum of Rs.12,52,957 was allowed as depreciation in excess of what was provided by assessee company in its books. questions which are raised are in relation to these amounts and whether any part thereof is liable to be deducted merely on ground that they are credited to other reserves , i.e. general reserves in present case. As assessee company provided lesser amount by way of depreciation than what was allowed in computation of income of assessee company for purposes of Income tax Act, 1961, difference between amount of depreciation actually allowed to assessee and amount actually provided in its books, was forming part of general reserve. It is, ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 13 of 16 ITR.164.2000 therefore, quite apparent that assessee company when it asked for deduction of depreciation for purposes of income tax was conscious of fact that depreciation provided for was insufficient as per provisions of Income tax Act and, in fact, contention of assessee company was accepted because depreciation in its books of account was provided on footing of straight line method while in fact depreciation to be calculated in accordance with provisions of Income tax Act was much larger. For computing its income for purposes of Income tax Act such larger amount of depreciation was allowed and excess amount, i.e. amount of difference between amount of depreciation actually allowed for purposes of Income tax Act and amount of depreciation actually provided in books of assessee company, was diverted as forming part of general reserve and actually amounts that were credited to general reserve included within its item such difference between amount of depreciation allowed for purposes of Income tax Act and amount of depreciation actually provided in books. Thus, on plain interpretation of language used in clause (iii) of rule 1 of Second Schedule to Act, it is quite apparent that if amount of depreciation provided in books of assessee company for particular year is less than amount of depreciation actually allowed by Income tax Officer for computation of income, then difference between these two amounts has to be deducted from amount standing to credit of other reserves , namely, general reserve, so far as facts of this case are concerned. Thus, Appellate Assistant Commissioner was right in taking view that for first year sum of Rs.5,68,112 ought to be deducted from amount of general reserve of Rs.7,50,000 and sum of Rs.12,52,957 ought to have been deducted from amount of general reserve of Rs.37,00,000 for second year. What is required to be considered having regard to language of clause (iii) of rule 1 of Second Schedule to Act as well as circular referred to by Mr.Toprani is when for ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 14 of 16 ITR.164.2000 purposes of surtax capital has to be computed as required by Second Schedule to Act whether depreciation has been allowed under Income tax Act for relevant year, and if it is so allowed, then if provisions of clause (iii) of rule 1 are attracted, they are to be given effect to. 15. Mr.Malhotra is right in his contention that merely because coordinate Bench has distinguished judgment of this Court in Zenith Steel Pipes (supra), we must not remit questions back to Tribunal. Firstly he would submit that coordinate Bench was sitting at Madras. Tribunal's coordinate Bench at Madras was bound by judgment and order of jurisdictional High Court. jurisdictional High Court for that Tribunal is not this Court, but High Court of Madras, at Madras. Secondly, in that case, Tribunal found on facts that issue of Companies (Profits) Surtax Act, 1964 levying additional tax on total income of company in manner stipulated by Act, was brought in issue by assessee. assessee argued that Surtax is charged over and above statutory deductions. First Schedule to Act contains rules for computing chargeable profits and Second Schedule contains rules for computing capital base of company. assessee raised for consideration question whether investment allowance granted to assessee under Section 32(1) of Act could be treated as income, profits and gains not includible in total income. Tribunal held that neither in law nor in logic is there any warrant for treating said allowance as income not includible in total income of assessee. Tribunal then considered in one set of appeals issue with which we are not concerned. However, as per interpretation of Rule 1(iii) of Second Schedule is concerned, it found that case of assessee there was that ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 15 of 16 ITR.164.2000 amount of depreciation allowed as deduction, was in excess of amount of depreciation charged on tax of amount of assessee. argument of assessee was that Rule 1 of Second Schedule does not contemplate any adjustments as regards paid up capital. Therefore, even on footing that aggregate differential went to augment general reserve, as long as amount capitalised out of general reserve is more than amount represented by aggregate differential, department cannot insist on tracing aggregate differential to general reserve alone. alternate argument was that part of general reserve might well have been declared as dividend. In such case also assessee could attribute such payments to aggregate differential. Tribunal then went on to refer to law and equally to all other aspects but what it found that conditions and three in number as enumerated in Rule 1(iii) would have to be satisfied. Firstly there should be reserve; secondly amount should have been credited to such reserve, by conscious overt act on part of Board of Directors. Thirdly, amount credited to reserve must have been allowed as deduction in computing income of company for purposes of income tax. Tribunal found that in case before it, these conditions have not been satisfied. In case before Tribunal in respect of differential, there is no reserve credited by board of directors through conscious overt act, nor is there any crediting of amount to any reserve by conscious overt act on part of board of directors. Of course, large amount has been allowed in income tax proceedings as and by way of depreciation. But other two conditions were not satisfied. That is why Tribunal found that there was no need to reduce capital base by differential. ::: Uploaded on - 09/10/2017 ::: Downloaded on - 10/10/2017 09:45:44 ::: 16 of 16 ITR.164.2000 16. It is these facts of matter which enabled coordinate Bench of Tribunal at Madras to observe that true it is that in case of Zenith Steel Pipes (supra) this Court has taken view which supports revenue, but contentions advanced before Tribunal's coordinate Bench at Madras and considered by it, were not advanced before Bombay High Court. It is in these circumstances that coordinate Bench of Tribunal distinguished it. We do not see how in abstract and de hors factual backdrop Mr.Seth can rely upon view of coordinate Bench of Tribunal. 17. As far as Income Tax Appellate Tribunal, Mumbai Bench is concerned, it was bound by judgment of this Court in Zenith Steel Pipes (supra) and when it applies with full force to facts also. 18. In our view, therefore, none of contentions of Mr.Seth can be accepted. questions which have been forwarded for our opinion by Tribunal are answered against assessee and in favour of revenue. Moreso, when there is no scope for reading anything further in provision namely Rule 1(iii) after conditions set out therein are satisfied. reference is thus disposed off. (PRAKASH D. NAIK, J.) (S.C.DHARMADHIKARI, J.) MST HerdilliachemicalsLimited v. TheCommissionerofIncome-tax, City-III,Mumbai
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