D.b. Income Tax Appeal v. M/S Kansara Modler Ltd

(1) D.B. INCOME TAX APPEAL NO. 23/2007. Commissioner of Income Tax-I Vs. M/s Kansara Modler Ltd. .. (2) D.B. INCOME TAX APPEAL NO. 129/2007. Commissioner of Income Tax-IVs.M/s Kansara Modler Ltd. ... Date of Judgment :: 20[th] September 2011. HON'BLE MR. JUSTICE DINESH MAHESHWARIHON'BLE MR. JUSTICE KAILASH CHANDRA JOSHI Mr. K.K. Bissa, for the appellant.Mr. Anjay Kothari, for the respondent. <><> BY THE COURT: These two income-tax appeals under Section 260-A of theIncome Tax, 1961 preferred by the Revenue against the differentorders passed by the Income Tax Appellate Tribunal, JodhpurBench, Jodhpur for different assessment years but in relation to thesame assessee and involving identical questions of law, have beenconsidered together; and are taken up for disposal by this commonjudgment. These appeals were admitted on the following identicalquestions of law:- “(1) Whether on the facts and in the circumstances of the case,the learned tribunal was legally justified in holding that thereceipts in question by way of interest were incidental to the mainbusiness of the assessee and the receipts are to be taken ascapital receipts and not income of the assessee from anyindependent source despite assessee’s failure to adduce anyevidence in this regard?the learned tribunal was legally justified in holding that thereceipts in question by way of interest were incidental to the mainbusiness of the assessee and the receipts are to be taken ascapital receipts and not income of the assessee from anyindependent source despite assessee’s failure to adduce anyevidence in this regard? (2) Whether on the facts and in the circumstances of the case, thelearned tribunal was legally justified in not applying the decision ofHon’ble Supreme Court given in the case of Tuticorin AlkaliChemical and Fertilizers Ltd. v. CIT reported in 227 ITR 172despite the same being fully applicable to the facts of the presentcase?”learned tribunal was legally justified in not applying the decision ofHon’ble Supreme Court given in the case of Tuticorin AlkaliChemical and Fertilizers Ltd. v. CIT reported in 227 ITR 172despite the same being fully applicable to the facts of the presentcase?” The learned counsel for the parties have frankly pointed outthat in relation to the same assessee, the above questions had beenthe subject of consideration in D.B. Income Tax Appeal No. 79/2005,decided on 25.04.2008; and have placed for perusal the copy of thesaid judgment dated 25.04.2008. In the said judgment dated 25.04.2008, a co-ordinate Bench ofthis Court has taken note of the ratio in the case of Tuticorin AlkaliChemical and Fertilizers Ltd. Vs. CIT: [(1997) 227 ITR 172 (SC)]and also in the cases of CIT Vs. Karnal Co-operative Sugar MillsLtd.: [(2000) 243 ITR 2 (SC)] and CIT Vs. Bokaro Steel Ltd.: [(1999)236 ITR 315 (SC)] and has observed that when the Tribunal foundKarnal Co-operative Sugar Mills Ltd.’s case to be the nearest andlatest and applicable on facts, it cannot be said that the Tribunal waswholly wrong in adopting this course or was legally not justified indoing so simply because it might have been possible, or might bemore appropriate to follow the other set of judgments by followingthe other line of reasoning. The Court, however, made it clear that itwas not being decided as to whether in such circumstances, thequestioned receipts would be revenue receipts or capital asset. The relevant operative part of the judgment reads as under:- relevant operative part of the judgment reads as under:- “13.In that view of the matter, what we are required to consideris, as to whether the Tribunal was legally justified in not applyingthe judgment rendered in Tuticorin's case (supra), or that, theTribunal was justified in applying the judgments given in BokaroSteel, and Karnal Cooperative Sugar Mill's case. If this questionwere to come originally before us, perhaps we might have taken atask of undertaking the exercise, as to which of the views isrequired to be followed, and may be, that we might have come toany conclusion, either ways. In such circumstances, when thelearned Tribunal, after examining all the three judgments, inTuticorin's case(supra), Karnal Cooperative Sugar Mill’s case(supra), and Bokaro Steel's case(supra), has examined thequestion, and found Karnal Cooperative’s case (supra) to be thenearest, and latest case, on facts, in our view, it cannot be said,that the Tribunal was wholly wrong in adopting this course. Itwould have been equally the same situation, if the learnedis, as to whether the Tribunal was legally justified in not applyingthe judgment rendered in Tuticorin's case (supra), or that, theTribunal was justified in applying the judgments given in BokaroSteel, and Karnal Cooperative Sugar Mill's case. If this questionwere to come originally before us, perhaps we might have taken atask of undertaking the exercise, as to which of the views isrequired to be followed, and may be, that we might have come toany conclusion, either ways. In such circumstances, when thelearned Tribunal, after examining all the three judgments, inTuticorin's case(supra), Karnal Cooperative Sugar Mill’s case(supra), and Bokaro Steel's case(supra), has examined thequestion, and found Karnal Cooperative’s case (supra) to be thenearest, and latest case, on facts, in our view, it cannot be said,that the Tribunal was wholly wrong in adopting this course. Itwould have been equally the same situation, if the learned //Mohan// Tribunal would have adopted the other line of reasoning,following the judgment in Tuticorin's case (supra). 14.Therefore, when there are two sets of judgments ofHon'ble Supreme Court, proceeding on different lines ofreasonings, and both stand on their own logical footing, and inthat event, if the learned Tribunal has accepted one line ofreasoning, supported by one set of judgments, it cannot be said,that the learned Tribunal was legally not justified in following thedecision, as followed by it, simply because it might have beenpossible, or might be more appropriate to follow the other set ofjudgment, by following the other line of reasoning. 15.We may make it clear here, that we should not beunderstood to be deciding the question of law, as to whether, insuch circumstances, the receipt would be revenue receipt orcapital asset. In that view of the matter, the questions, as framed, arealso decided in favour of the assessee, and against revenue, andthe appeal is dismissed.” The decision rendered in the similar appeal involving identicalquestions, obviously, covers the questions formulated in the presentappeals too and there appears no reason for taking any viewdifferent from the one taken by the co-ordinate Bench. Accordingly, and as a result of the aforesaid, the questions asformulated in the present appeals are answered against theRevenue and in favour of the assessee; and the appeals aredismissed following the said judgment dated 25.04.2008 in D.B.Income Tax Appeal No. 79/2005 and in the same terms. (KAILASH CHANDRA JOSHI), J. (DINESH MAHESHWARI), J. //Mohan// D.B. INCOME TAX APPEAL NO. 129/2007. Commissioner of Income Tax-IVs.M/s Kansara Modler Ltd. ... Date of Judgment :: 20[th] September 2011. HON'BLE MR. JUSTICE DINESH MAHESHWARIHON'BLE MR. JUSTICE KAILASH CHANDRA JOSHI Accordingly, and as a result of the aforesaid, the questions asformulated in the present appeals are answered against theRevenue and in favour of the assessee; and the appeals aredismissed following the said judgment dated 25.04.2008 in D.B.Income Tax Appeal No. 79/2005 and in the same terms. (KAILASH CHANDRA JOSHI), J. (DINESH MAHESHWARI), J. //Mohan// D.B. INCOME TAX APPEAL NO. 129/2007. Commissioner of Income Tax-IVs.M/s Kansara Modler Ltd. ... Date of Judgment :: 20[th] September 2011. HON'BLE MR. JUSTICE DINESH MAHESHWARIHON'BLE MR. JUSTICE KAILASH CHANDRA JOSHI Mr. K.K. Bissa, for the appellant.Mr. Anjay Kothari, for the respondent. <><> The appeal is dismissed vide common judgment in D. B. Income Tax Appeal No. 23/2007: Commissioner of Income Tax-I Vs. M/s Kansara Modler Ltd. (KAILASH CHANDRA JOSHI), J. (DINESH MAHESHWARI), J.