Ita/69/2010 Of The Commissioner Of Income Tax, Cochin v. M/S.appollo 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. 69 of 2010 AGAINST THE ORDER IN ITA 23/COCH/2005 of I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S: THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADVS.SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENTSRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT RESPONDENT/S: M/S.APPOLLO TYRES LTD., KOCHI6TH FLOOR, CHERUPUSHPAM BUILDINGS, SHANMUGHAM ROAD, KOCHI-31. BY ADVS.SRI.BINU MATHEWSRI.B.J.JOHN PRAKASHSRI.JOSEPH KODIANTHARA (SR.)SRI.MATHEWS K.UTHUPPACHANSRI.TERRY V.JAMESSRI.TOM THOMAS (KAKKUZHIYIL)SRI.V.ABRAHAM MARKOS OTHER PRESENT: BY SRI.JOSEPH MARKOS(SR) 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 years1996-97 and 1997-98. 2.The respondent Assessee company is engaged inthe manufacture and sale of automotive tyres, tubes,etc. Return was filed by the Assessee 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 the AssessingOfficer as per Annexure A order dated 10.01.2002,assessing a total income of Rs.6,01,26,850/- andfixing the tax liability accordingly. This wassought to be challenged by the Assessee by filingappeal before the Commissioner of Income Tax. Afterconsidering the plus and minus points, the appeal wasfinalised as per Annexure-B order, whereby some points were answered in favour of the Assessee, whilesome additions were made in favour of the Revenue.This was challenged both by the Assessee and theRevenue before the Income Tax Appellate Tribunal.After hearing the matter in detail, along with someother cases, a common verdict was passed as perAnnexure-C order dated 18.08.2009, whereby thegrievance projected by the Assessee was redressedunder some of the relevant heads, which are stated asdetrimental to the interest of the Revenue and hencethe challenge in the appeal filed by the Revenue. 3. Heard Mr.Joseph Markose, the learned Sr.Counselfor the assessee as well as Mr. Christopher Abraham, thelearned Standing Counsel for the Department, at length.4. At the very outset, it is to be noted thatthe appeal is still to be admitted and no substantialquestion of law has been raised by this Court.'Notice on admission' alone was ordered on 27.9.2010and the matter was pending consideration for morethan nine years. The Revenue has pointed out some questions, as involving the substantial questions of law, which are in the following terms: (1)(a) Whether, on the facts and in thecircumstances of the case and also for thereasons stated in the grounds of appeal is notthe loss of Rs.61,30,191/- on sale of IRFC bondsa capital loss and an impermissible deductionunder the I.T.Act? (b) Is not the decision reported in 255 ITRinapplicable to the facts of the case for thereasons stated in the grounds of appeal? (2)(a) Whether, on the facts and in thecircumstances of the case and also in view of thefact that the Welfare Trust created by theassessee is in respect of transportation of theemployees, the assessee is entitled to claimdeduction of the contribution of Rs.22,66,580/-made to the trust? (b) Whether, on the facts and in thecircumstances of the case and in the light ofSec.40A(9) read with Sec.36(1)(iv)(v) rad withground (F) the assessee is entitled to deductionunder Sec.37? (b) Is not the decision reported in 255 ITRinapplicable to the facts of the case for thereasons stated in the grounds of appeal? (2)(a) Whether, on the facts and in thecircumstances of the case and also in view of thefact that the Welfare Trust created by theassessee is in respect of transportation of theemployees, the assessee is entitled to claimdeduction of the contribution of Rs.22,66,580/-made to the trust? (b) Whether, on the facts and in thecircumstances of the case and in the light ofSec.40A(9) read with Sec.36(1)(iv)(v) rad withground (F) the assessee is entitled to deductionunder Sec.37? (3) Whether, on the facts and in thecircumstances of the case and when Section 43A ofthe I.T.Act provides for adjustment of actualcost of capital asset only on settlement of theliability, that is, on actual payment, theassessee is entitled to claim the deduction ofRs.11,31,385/-duetoforeignexchangefluctuation? 5. This Court is at loss to understand how these questions could be raised by the Revenue, repeatedly in this appeal as well, notwithstanding similar questions raised in respect of the very sameassessment year in I.T.A.Nos.47/2010, 204/2010, 259/2010 and 196/2011. The very same figures havebeen given in respect of the very same cause ofaction and the appeal is sought to be sustained as ifit involves some substantial questions of law. 6. The learned Standing Counsel for the appellant fairly concedes that some inadvertent mistakes had been crept in, while moulding the caseand framing the questions. 7. This Court finds that the very same questionin respect of the loss sustained by Assessee,pursuant to sale of IRFC Bonds, showing it as abusiness loss and not as a capital loss, as sought to be painted by the Revenue, was considered by us andanswered in favour of the assessee as per thejudgment dated 13.3.2019 in ITA No.60/2010. 8. With regard to the payment effected by the Assessee to the Welfare Trust, the Revenue contendedthat it was diversion of funds; whereas the Assessee's stand was that it was part oftransportation expenses, which otherwise would haveto be arranged by the Assessee itself, had theWelfare Trust not undertaken the said task. Thisquestion was sought to be considered and answered bythis Court in I.T.A.No.60/2010 and hence no furtherscrutiny does require in respect of the said questionas well. 9. The last question raised is with regard tothe invocation of Section 43A of the Income Tax Actin respect of the relevant transaction. The issue wasconsidered quite elaborately by this Court and afterplacing reliance on the verdict passed by the ApexCourt in Oil and Natural Gas Corporation Limited, Dehradoon, through the Managing Director v.Commissioner of Income Tax, Dehradoon (322 ITR 180),the question was answered in favour of the Assesseeand against the Revenue, as per the judgment dated12.03.2019 in ITA No.1347/2009. In the above circumstances, we find that no substantial question of law is involved herein so asto invoke the power and jurisdiction of this Courtas envisaged under Section 260A of the Income TaxAct. The appeal fails and the same is dismissedaccordingly. Sd/- P.R.RAMACHANDRA MENONJUDGE okb Sd/- N.ANIL KUMARJUDGE //True copy// P.S. to Judge