Ita/259/2010 Of The Commissioner Of Income Tax v. M/S. Apollo Tyres Ltd Kochi

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON & THE HONOURABLE MR.JUSTICE N.ANIL KUMAR WEDNESDAY, THE 13TH DAY OF MARCH 2019 / 22ND PHALGUNA, 1940 ITA.No. 259 of 2010 AGAINST THE ORDER IN ITA 23/2004 of I.T.A.TRIBUNAL,COCHIN BENCHDATED 18-08-2009 APPELLANT/RESPONDENT: THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADVS.SRI.JOSE JOSEPH, SC, FOR INCOME TAXSRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENTSRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT RESPONDENT/APPELLANT: M/S. APOLLO TYRES LTD KOCHIKOCHI-31. 6TH FLOOR, CHERUPUSHPAM BUILDINGS,, SHANMUGHAM ROAD, BY ADVS.SRI.JOSEPH MARKOS (SR.)SRI.V.ABRAHAM MARKOSSRI.ABRAHAM JOSEPH MARKOSSRI.GOVIND VIJAYAKUMARAN NAIRSRI.HARAN THOMAS GEORGESRI.ISAAC THOMASSRI.NOBY THOMAS CYRIAC THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 13.03.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT P.R. Ramachandra Menon, J. This appeal is at the instance of the Revenue.Challenge is against Annexure-C order passed by theIncome Tax Appellate Tribunal, Cochin Bench. Theassessment is in respect of the assessment year1996-97. 2. The respondent Assessee Company is engagedin the manufacture and sale of automotive tyres,tubes, etc. Return was filed by the company on28.11.1996, which was followed by a revised return.Finally, the assessment was completed in terms ofSection 143(3) of the Income Tax Act by theAssessing Officer as per order dated 10.01.2002,assessing a total income of Rs.5,79,77,070/- andfixing the tax liability accordingly. This issought to be challenged by the Assessee by filingappeal before the Commissioner of Income Tax.After considering the plus and minus points, theappeal was finalised, whereby some points were answered in favour of the Assessee while someadditions were made in favour of the Revenue. Thiswas challenged by both the Assessee and the Revenuebefore the Income Tax Appellate Tribunal. Afterhearing the matter in detail, along with some othercases, a common verdict was passed on 18.08.2009,whereby the grievance projected by the Assessee wasredressed under some of the relevant heads. TheAssessee filed 'Annexure A' MiscellaneousApplication stating that some mistakes have creptin the above order and hence it was sought to beconsidered/corrected. The Tribunal considered'Annexure A' and passed 'Annexure B' order on08.01.2010, granting relief to the Assessee, whichis stated as detrimental to the interest of theRevenue and hence the challenge in the appeal filedby the Revenue. 3. Heard Mr.Joseph Markose, the learnedSr.Counsel for the assessee as well as Mr.Christopher Abraham, the learned Standing Counselfor the Department, at length. 4. This appeal preferred by the Revenue is still to be admitted, despite the pendency for morethan nine years and no substantial question of law has been raised. The question raised by the appellant Revenue, suggesting involvement of somesubstantial questions of law, are in the following terms: 1. Whether on the facts and in thecircumstances of the case- (a) the Club expenses being personalexpenditure, the assessee is entitled to claimexpenses under the Income Tax Act? (b) since the question being contested bythe Revenue for the asst. years 1994-95 and1995-96 and the same is pending considerationbefore this Hon'ble Court, the Tribunal isright in law (vide Sec.268A and 304 ITR 61) indeclining to consider the question for thereason stated in the order? (c) Whether, on the facts and in thecircumstances of the case and in the light ofSec.268A and 304 ITR 61 is not the Tribunalbound to consider the question regarding clubexpense on merits? 2. Whether, on the facts and in thecircumstances of the case- terms: 1. Whether on the facts and in thecircumstances of the case- (a) the Club expenses being personalexpenditure, the assessee is entitled to claimexpenses under the Income Tax Act? (b) since the question being contested bythe Revenue for the asst. years 1994-95 and1995-96 and the same is pending considerationbefore this Hon'ble Court, the Tribunal isright in law (vide Sec.268A and 304 ITR 61) indeclining to consider the question for thereason stated in the order? (c) Whether, on the facts and in thecircumstances of the case and in the light ofSec.268A and 304 ITR 61 is not the Tribunalbound to consider the question regarding clubexpense on merits? 2. Whether, on the facts and in thecircumstances of the case- (i) is not disallowance of depreciation onthe enhanced cost of equipment due to foreignexchange fluctuations in accordance with law?(ii) is not increase in the liability onlynotional and not real and hence the Tribunalis right in law in interfering with thedisallowance of depreciation on account ofvariation in foreign exchange? 3. Whether, on the facts and in thecircumstances of the case- a) The Tribunal is justified and right inlaw in interfering with the disallowance madeby the Assessing Officer invoking section 14Aof the Income Tax Act? b) Does not the issue involved indisallowance under Sec.14A and the view of theTribunal amount to replacing the words “suchexpenditure” by “such investment”? c) Is not the order of the Tribunal onthe issues involved vitiated and perverse inthe light of the grounds urged in the case? 5. The first question, with regard to the 'Clubexpenses' claimed by the Assessee as part of thebusiness expense (sought to be categorised by theRevenue as personal expenditure, stands answered in okb favour of the Asssessee as per the verdict passedby us inITA No.1347/2009. Similarly, the secondissue with regard to the 'Foreign exchangefluctuation' and the loss sustained in this regardis also covered by ITA No.1347/2009. The thirdissue with respect to Section 14A of the Act alsostands covered by ITA No.973/2009. 6. In the above circumstance, all the threeissues raised by the Revenue stand already answeredby this Court and nothing remains to be consideredas involving any substantial question of lawenvisaged under Section 260A of the I.T.Act.Appeal fails and it is dismissed accordingly. Sd/-P.R.RAMACHANDRA MENONJUDGE Sd/-N.ANIL KUMARJUDGE //True copy// P.S. to Judge