Commissioner Of Income Tax, Alwar v. M/S. Vijay Solvex Ltd., Bhagwati Sadan, S.d. Marg, Alwar

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR. 1.DB INCOME TAX APPEAL NO.812/2008 Commissioner of Income Tax, Alwar.Versus M/s. Vijay Solvex Ltd., Bhagwati Sadan, S.D. Marg, Alwar. 2.DB INCOME TAX APPEAL NO.842/2008 Commissioner of Income Tax, Alwar. Versus M/s. Vijay Solvex Ltd., Bhagwati Sadan, S.D. Marg, Alwar. 3.DB INCOME TAX APPEAL NO.849/2008 Commissioner of Income Tax, Alwar.VersusVersus M/s. Vijay Solvex Ltd., Bhagwati Sadan, S.D. Marg, Alwar. 4.DB INCOME TAX APPEAL NO.879/2008 Commissioner of Income Tax, Alwar.VersusVersus M/s. Vijay Solvex Ltd., Bhagwati Sadan, S.D. Marg, Alwar. 5.DB INCOME TAX APPEAL NO.911/2008 Commissioner of Income Tax, Alwar.VersusVersus M/s. Vijay Solvex Ltd., Bhagwati Sadan, S.D. Marg, Alwar. DATE OF ORDER ::: 07.12.2016. HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE DINESH MEHTA Mrs. Parinitoo Jain, for the appellant. Mr. Anant Kasliwal & Mr. Vinod Pathak on behalf of Mr. Amol Vyas, for the respondent. 1.By way of these appeals, the department has challenged the judgment and order of the Tribunal whereby the Tribunal has partly allowed the appeals preferred by the assessee anddismissed the appeals of the department. 2.This Court while admitting the appeals framed thefollowing substantial questions of law: 1.DB INCOME TAX APPEAL NO.812/2008 "1.Whetheronthefactsandcircumstances of the case and in law, Hon'bleITAT was legally justified in holding that theprovisions of Section 80B(5) are notrestrictive to deduction allowable to theassessee u/s. 80HH & 80I of the I.T. Act,1961? 2. Whether on the facts and circumstancesof the case, and in law Hon'ble ITAT waslegally justified in directing to exclude currentyear's losses and depreciation for allowingdeduction u/s.80HH and 80I of the I.T. Actwhereas the Govt. allowed the carry forwardand set off of unabsorbed losses anddepreciation which only regulates withSection 72A and allowed in the manner laiddown u/s.72 of the I.T. Act, 1961 thereforethere is scope to exclude depreciationu/s.32(1) of amalgamating company or astake as loss? 2. DB INCOME TAX APPEAL NO.842/2008 "1.Whetheronthefactsandcircumstances of the case and in law, Hon'bleITAT was legally justified in holding that theprovisions of Section 80B(5) are notrestrictive to deduction allowable to theassessee u/s. 80HH & 80I of the I.T. Act,1961? 2.Whetheronthefactsandcircumstances of the case, and in law Hon'bleITAT was legally justified in entertaining theappeal of the assessee against the orderpassed u/s.72A(2)(ii) read with Section 154 ofthe I.T. Act, 1961 as the same is notappealable?" 3 3.DB INCOME TAX APPEAL NO.849/2008 "1.Whetheronthefactsandcircumstances of the case and in law, Hon'bleITAT was legally justified in directing to allowunabsorbed losses and depreciation afterallowing deduction u/s. 80HH & 80I? 2. Whether on the facts and circumstances ofthe case, and in law Hon'ble ITAT waslegally justified in directing to excludecurrent year's losses and depreciation forallowing deduction u/s.80HH and 80I of theI.T. Act whereas the Govt. allowed thecarry forward and set off of unabsorbedlosses and depreciation which onlyregulates with Section 72A and allowed inthe manner laid down u/s.72 of the I.T. Act,1961 therefore there is scope to excludedepreciation u/s.32(1) of amalgamatingcompany or as take as loss?the case, and in law Hon'ble ITAT waslegally justified in directing to excludecurrent year's losses and depreciation forallowing deduction u/s.80HH and 80I of theI.T. Act whereas the Govt. allowed thecarry forward and set off of unabsorbedlosses and depreciation which onlyregulates with Section 72A and allowed inthe manner laid down u/s.72 of the I.T. Act,1961 therefore there is scope to excludedepreciation u/s.32(1) of amalgamatingcompany or as take as loss? 3. Whether on the facts and circumstances ofthe case, and in law Hon'ble ITAT waslegally justified in entertaining the appeal ofthe assessee against the order passedu/s.72A(2)(ii) read with section 154 of theI.T. Act, 1961 as the same is notappealable?"the case, and in law Hon'ble ITAT waslegally justified in entertaining the appeal ofthe assessee against the order passedu/s.72A(2)(ii) read with section 154 of theI.T. Act, 1961 as the same is notappealable?" 4.DB INCOME TAX APPEAL NO.879/2008 "1.Whetheronthefactsandcircumstances of the case and in law, Hon'bleITAT was legally justified in holding that theprovisions of Section 80B(5) are notrestrictive to deduction allowable to theassessee u/s. 80HH & 80I of the I.T. Act,1961?2.Whetheronthefactsandcircumstances of the case, and in law Hon'bleITAT was legally justified in directing toexclude current year's losses anddepreciation for allowing deduction u/s.80HHand 80I of the I.T. Act whereas the Govt.allowed the carry forward and set off ofunabsorbed losses and depreciation whichonly regulates with Section 72A and allowedin the manner laid down u/s.72 of the I.T. Act,1961 therefore there is scope to excludedepreciation u/s.32(1) of amalgamatingcompany or as take as loss? 3.Whetheronthefactsandcircumstances of the case, and in law Hon'bleITAT was legally justified in entertaining theappeal of the assessee against the orderpassed u/s.72A(2)(ii) read with section 154 ofthe I.T. Act, 1961 as the same is notappealable?" 5.DBINCOMETAXAPPEALNO.911/2008 "2.Whetheronthefactsandcircumstances of the case and in law, Hon'bleITAT was legally justified in directing to allowunabsorbed losses and depreciation afterallowing deduction u/s. 80HH & 80I? 3.Whetheronthefactsandcircumstances of the case, and in law Hon'bleITAT was legally justified in directing toexclude current year's losses anddepreciation for allowing deduction u/s.80HHand 80I of the I.T. Act whereas the Govt.allowed the carry forward and set off ofunabsorbed losses and depreciation whichonly regulates with Section 72A and allowedin the manner laid down u/s.72 of the I.T. Act,1961 therefore there is scope to excludedepreciation u/s.32(1) of amalgamatingcompany or as take as loss? 5.Whetheronthefactsandcircumstances of the case, and in law Hon'bleITAT was legally justified in entertaining theappeal of the assessee against the orderpassed u/s.72A(2)(ii) read with section 154 ofthe I.T. Act, 1961 as the same is notappealable?" 3.However, in view of the subsequent decision of this Court, dated 24.02.2015 in DB Income Tax Appeal No.125/2004 incase of Vijay Solvex Ltd. Vs. Commissioner of Income Tax,Alwar and DB Income Tax Appeal No.185/2004 decided on06.01.2014 in case of Vijay Solvex Ltd. vs. Commissioner ofIncome Tax, Alwar, the issue is required to be answered infavour of the department and against the assessee. 5 4.However, Mr. Kasliwal contended that the issue is pendingbefore the Supreme Court in M/s Vijay Industries Vs.Commissioner of Income Tax, Civil Appeal Nos. 1581-1582 of2005 wherein the matter has been referred a Larger Bench inview of the observations made in para 7 & 8:- 7.The finding in paragraph 4 inMotilal Pesticides (supra) that the language ofSection 80-HH and Section 80-M is the sameis, with respect, prima facie, incorrect.Conceptually, “any income” and “profits andgains” are different under the Income Tax Act. (See Section 80-M read with Sections 80-AA& AB, Section 80-T which speak of “anyincome” and Section 28 which speaks of“income from profits and gains” showingthereby that conceptually the two expressionsare understood as distinct in law). 5 4.However, Mr. Kasliwal contended that the issue is pendingbefore the Supreme Court in M/s Vijay Industries Vs.Commissioner of Income Tax, Civil Appeal Nos. 1581-1582 of2005 wherein the matter has been referred a Larger Bench inview of the observations made in para 7 & 8:- 7.The finding in paragraph 4 inMotilal Pesticides (supra) that the language ofSection 80-HH and Section 80-M is the sameis, with respect, prima facie, incorrect.Conceptually, “any income” and “profits andgains” are different under the Income Tax Act. (See Section 80-M read with Sections 80-AA& AB, Section 80-T which speak of “anyincome” and Section 28 which speaks of“income from profits and gains” showingthereby that conceptually the two expressionsare understood as distinct in law). 8.In paragraph 5 of the judgment inMotilal Pesticides (supra), Shri Ramamurthi,learned senior counsel appearing for theappellant submitted that both Cloth Tradersand Distributors (Baroda) were cases whichpertained to Section 80-M only and this Courthad no occasion to consider the application ofSection 80-AB with reference to Section 80-HH of the Act. The Court in repelling thiscontention referred to another decision in H.H.Sir Rama Verma V.CIT (1994) Supra (1) SCC473, which judgment dealt with the then newlyenacted Section 80-AA and 80-AB. Both thesesections again are relatable to deductionsmade under Section 80-M; and Section 80-Twith which that judgment was concerned alsouses the expression “any income” as opposedto “profits and gains”. It will be clear,therefore, that prima facie Verma's case againhas very little to do with the concept of “profitsand gains” with which we are concerned here.For these reasons, the matters be placedbefore the Hon'ble Chief Justice of India toconstitute an appropriate Bench to considerthe correctness of the judgment in MotilalPesticides (supra). 6 5.We have heard both the sides. 6.Following the decision, the of this Court in case of thesame assessee, the issue is answered in favour of thedepartment and against the assessee. It is made clear that thedecision of Supreme Court in Civil Appeal No.1581-1582 of2005 will be binding on both the parties even for the years underconsideration. If the decision is passed in favour of theassessee, it will be open for him to produce the same decisionbefore the Assessing Officer and the same benefit will begranted to the assessee. 7. In that view of the matter, all issues are answered infavour of the department and against the assessee. 8.All the appeals stand dismissed. 9.A copy of this judgment be placed in each file. (DINESH MEHTA), J. (K.S. JHAVERI), J. Asheesh Kr. Yadav105-109