Commissioner Of Income Tax Iii,Chennai v. M/S. Sriram Transport Finance Ltd.,Mookambika Complex,Iii Floor

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 15.11.2016 C O R A MTHE HON'BLE MR. JUSTICE NOOTY.RAMAMOHANA RAOANDTHE HON'BLE Dr. JUSTICE ANITA SUMANTH Tax Case Appeal No.1420 of 2010 Commissioner of Income Tax III,Chennai... Appellant Vs M/s. Sriram Transport Finance Ltd.,Mookambika Complex,III Floor, No.4 Lady Desika Road,Mylapore, Chennai 600 004... Respondent Prayer:- Appeal filed under Section 260A of the Income Tax,1961, against the Order of the Income Tax Appellate Tribunal,Chennai D Bench, dated 26.03.2010, in I.T.A.No.1610/Mds/2009.Against the order passed by Income Tax Appellate TribunalChennai Bench C Chennai made ITA.No.1610/MDS/09 for theassissment year 2005-2006 which was preferred against the orderpassed by the Commissioner of Income Tax (Appeals V 121, MahatmaGandhi Road, Chennai 600 034 made in ITA.No.332/2007-2008dt.24.12.2008. For Appellant : Mr. J.NarayanasamyFor Respondent : Mr. R.Sivaraman J U D G M E N T(Judgment of the Court was delivered by Anita Sumanth, J.,) The above Appeal is preferred by the Revenue under Section260A of the Income Tax Act, 1961, calling and questioning thecorrectness of the order, dated 26.03.2010, passed by the IncomeTaxAppellateTribunal,Chennai'D'Bench,inI.T.A.No.1610/Mds/2009. 2. The following five substantial questions of law, relatingto the assessment year 2005-06, have been raised forconsideration, at the instance of the Revenue:-“1. Whether on the facts and in the https://hcservices.ecourts.gov.in/hcservices/ circumstances of the case, the Income Tax AppellateTribunal was right in holding that the assessee wasentitled to account for only the “additional financecharges” on a cash basis, while it was otherwisefollowing the mercantile the system of accounting andalso accounting for the very same transaction on amercantile basis under the Company Law? 2. Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in holding that the assessee could be permittedto follow the mercantile system of accounting for thepurpose of Company Law and a Hybrid system for thepurposes of Income Tax? 3. Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in holding that additional finance chargescould be shown for Income Tax purposes on receiptbasis, though the assessee has accounted for the samein the regular accounts on accrual basis andtherefore were not includible in the taxable businessincome, ignoring the special provisions contained inSection 43 D of the Income Tax Act and Rules madethereunder, specifying the classes of assessees andcategories of bad and doubtful debts in respect ofwhich such exclusion could be made? 4. Whether on the fact and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in deleting the disallowance of Long TermCapital Loss of Rs.1,09,93,553/- on account of saleof shares to a sister concern without applying theratio of the Supreme Court's decision in the case ofAishini Least Finance P. Ltd., (309 I.T.R. 320)? 5. Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in holding that the provision for the bad debtscould not be added back while computing the bookprofits u/s 115JB in view of the retrospectiveamendment made by the Finance (2) Act, 2009 by theinsertion of clause (l) in the explanation 1 toSection 115 JB?" 3. We have dealt with identical questions of law, in TaxCase Appeal No.1421 of 2010, of even date, with detailed reasonsset-out therein, answering Question Nos.1 to 4 in favour of theassessee and against the Revenue and Question No.5 against theassessee and in favour of the Revenue. Hence, this Tax CaseAppeal is also disposed of, on the directions stated in TCANo.1421 of 2010. No costs. 5. Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in holding that the provision for the bad debtscould not be added back while computing the bookprofits u/s 115JB in view of the retrospectiveamendment made by the Finance (2) Act, 2009 by theinsertion of clause (l) in the explanation 1 toSection 115 JB?" 3. We have dealt with identical questions of law, in TaxCase Appeal No.1421 of 2010, of even date, with detailed reasonsset-out therein, answering Question Nos.1 to 4 in favour of theassessee and against the Revenue and Question No.5 against theassessee and in favour of the Revenue. Hence, this Tax CaseAppeal is also disposed of, on the directions stated in TCANo.1421 of 2010. No costs. Sd/- Assistant Registrar //True Copy// Sub Assistant RegistrarToThe Commissioner of Income Tax IIIChennai2 The Commissioner of Income TaxAppeal V 121 Mahatma Gandhi Road,Chennai 600 0343 The Income Tax Appellant TribunalChennai ssk(CO)md(30/12/2016)T.C.A.No.1420 of 2010