Commissioner Of Income Taxchennai v. M/S.union Company Motors Limited18, Anna Salaichennai-2

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 13.2.2007 Coram The Honourable Mr.Justice P.D.DINAKARANandThe Honourable Mrs.Justice CHITRA VENKATARAMAN Tax Case (Appeal) No.73 of 2007 Commissioner of Income TaxChennai ...Appellant -vs- M/s.Union Company Motors Limited18, Anna SalaiChennai-2. ...Respondent Tax Case Appeal filed under Section 260(A) of the Income TaxAct, 1961, against the order of the Income Tax Appellate Tribunal Madras'B' Bench dated 26.7.2006 in ITA No.2362/Mds/92 - Assessment Year 1989-90. (ITA.No. 199/92-93 dated 10.7.92m on the file of the commissioner ofIncome tAx (A) V Madras 34 against G.I.No.1-U, P.a.No. 47-004-C4-7453,dated 31.3.92 against the file of the Deputy Commissioner of income tax,Special Range-I Madras-34. For Appellant:Mrs.Pushya SitaramanSenior Standing Counsel forIncome TaxFor Respondent:Mr.R.Vijayaraghavanfor M/s.Subbraya Aiyar JUDGMENT (The judgment of the Court was delivered by CHITRA VENKATARAMAN,J) The above appeal is by the Revenue relating to the AssessmentYear 1989-90. 2. The issue raised herein relates to the rectification ofassessment under Section 143(1)(a). It is seen that the assessingauthority went in for rectification of the assessment under Section 154in respect of sale consideration of land and building not credited tothe profit and loss but directly taken to the General Reserve Account,apart from provisions for bad and doubtful debts, provision fordepreciation and investments and provision for sales tax, considered forthe purposes of applying the provisions of Section 115J. TheCommissioner of Income Tax (Appeals) allowed the assessee's appeal,https://hcservices.ecourts.gov.in/hcservices/taking the view that the issues involved were debatable issues whichcould not be the subject matter of the adjustment under Section 143(1) (a) of the Act, consequently, not amenable to Section 154 of the Actalso. On the question of the assessee directly crediting the saleproceeds to the General Reserve Account, the appellate authority doubtedthe jurisdiction of the officer under Section 115J to work out theincome by varying the book profits shown in the Profit and Loss Account,which was approved by the shareholders. In the circumstances, theappellate authority held that the officer could not rectify the orderunder Section 154 as a mistake apparent on the face of the record. Hedirected the authority to reduce the income under Section 154 by Rs2.60crores. Thus, he allowed the appeal. 3. The Revenue went on appeal to the Tribunal. On a perusal ofthe factual details, the Tribunal came to the conclusion that the issuesinvolved were debatable issues. Hence, it confirmed the view of theCommissioner. The Revenue has come on appeal raising the followingquestions of law: 1. Whether in the facts and circumstances ofthe case, the Tribunal was right in holding that adecision on a debatable point of law is not a mistakeapparent from record to invoke Section 154 when thesame issues are well settled by the Hon'ble SupremeCourt? 2. Whether in the facts and circumstances ofthe case, the Tribunal was right in holding thatadjustment to book profits under Section 115J cannotbe done while rectifying an intimation under Section143(1)(a)? 4. Heard the Senior Standing Counsel for Income Tax. 5. In the light of the view that we have taken in T.C.No.11 of2004, following the decision of this Court in 273 ITR 350 (CIT v. NAMEELLEATHERS AND UPPERS), on the scope of Section 143(1)(a) with referenceto jurisdiction available under Section 154 of the Act, we do not findany justification in accepting the plea of the Revenue. Consequently,this appeal is dismissed on the ground that no substantial question oflaw arises for admitting this case. bg Sd/-Assistant Registrar, /true copy/ To Sub Assistant Registrar. 1. THE ASSISTANT REGISTRARINCOME TAX APPELLATE TRIBUNAL, RAJAJI BHAVAN III FLOOR, BESANT NAGAR, CHENNAI https://hcservices.ecourts.gov.in/hcservices/ 4. Heard the Senior Standing Counsel for Income Tax. 5. In the light of the view that we have taken in T.C.No.11 of2004, following the decision of this Court in 273 ITR 350 (CIT v. NAMEELLEATHERS AND UPPERS), on the scope of Section 143(1)(a) with referenceto jurisdiction available under Section 154 of the Act, we do not findany justification in accepting the plea of the Revenue. Consequently,this appeal is dismissed on the ground that no substantial question oflaw arises for admitting this case. bg Sd/-Assistant Registrar, /true copy/ To Sub Assistant Registrar. 1. THE ASSISTANT REGISTRARINCOME TAX APPELLATE TRIBUNAL, RAJAJI BHAVAN III FLOOR, BESANT NAGAR, CHENNAI https://hcservices.ecourts.gov.in/hcservices/ https://hcservices.ecourts.gov.in/hcservices/2. THE COMMISSIONER OF INCOME TAXSPECIAL RANGE I MADRAS 34.SPECIAL RANGE I MADRAS 34. 3.THE DEPUTY COMMISSIONER OF INCOME TAX SPECIAL RANGE I, MADRAS 34.SPECIAL RANGE I, MADRAS 34. 4.THE COMMISSIONER OF INCOME TAX, CHENNAI. CHENNAI. + One cc to M/s Pusya Sitaraman Advocate sR 8973MM (co)sg 16/3/07T.C.(A)No.73 of 2007 MM (co)sg 16/3/07T.C.(A)No.73 of 2007 13. 2.2007