Itr/20/1997 Of The Commr. Of Income Tax,Ernakulam v. The Kerala Shipping Corpn.ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR MONDAY, THE 11TH FEBRUARY 2008 / 22ND MAGHA 1929 ITR.No. 20 of 1997() -------------------- AGAINST THE ORDER DATED 21/10/1994 IN RA 318C/91 IN ITA.590/COCH/1988 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPLICANT: ----------- COMMISSIONER OF INCOME TAX, ERNAKULAM. BY ADV. SRI.GEORGE K. GEORGE, SC FOR IT SRI.P.K.R.MENON(SR.),SC FOR IT RESPONDENTS: ------------- THE KERALA SHIPPING CORPORATION LTD.,COCHIN. BY ADV. SRI.K.P.DANDAPANI THIS TAX REFERENCE HAVING BEEN FINALLY HEARD ON 11/02/2008, ALONG WITH ITR NO. 21 OF 1997, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &T.R.RAMACHANDRAN NAIR, JJ. .................................................................... ....................................................................Dated this the 11th day of February, 2008. JUDGMENT C.N.Ramachandran Nair, J. In the reference application filed by the Department, notice sent by the Registry got returned with the endorsement that "not known". We findthat notices sent on several occasions were returned with the sameendorsement. The assessee appears to be a shipping company promoted bythe Government of Kerala. The company became defunct after the onlyvessel it had drowned several years back. It is seen from the two assessmentorders produced in this court that the assessee was sustaining heavy losses.The unabsorbed business loss, depreciation, S.80J benefits etc. allowed tobe carried forward to subsequent years are in lakhs of rupees. The onlyissue raised in these cases is whether the tax paid by the assessee on foreignearnings were to be allowed as a deduction in the computation of income.While the case of the assessee is that only net income received from abroadis assessable, the department's case is tax paid abroad forms part of incomeand should also be added to the total income. We are of the view that theissue has become academic because even if decision goes in favour of the Revenue, Revenue is not going to get single rupee towards tax as carried forward losses are enough to absorb any amount of income. The totalamount involved in both the years together is less than Rs.3 lakhs andconsidering the eligible losses and depreciation available for set off againstincome and since the company is defunct, we feel pursuing the matter in thiscourt by the Revenue is only waste of time for this court. We, therefore,decline to answer the questions referred. The I.T.Rs. are accordinglyclosed. A copy of this judgment under the seal of the High Court andsignature of the Registrar shall be forwarded to the Income Tax AppellateTribunal, Cochin Bench, Cochin. C.N.RAMACHANDRAN NAIRJudge pms T.R.RAMACHANDRAN NAIRJudge