Joint Commissioner Of Income Tax v. Shri Dinesh Mills Ltd.....opponent(S

O/TAXAP/522/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 522 of 2006 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ?the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ?to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ JOINT COMMISSIONER OF INCOME TAX....Appellant(s) Versus SHRI DINESH MILLS LTD.....Opponent(s) ================================================================ Appearance: MR KM PARIKH, ADVOCATE for the Appellant(s) No. 1 MR BS SOPARKAR WITH MRS SWATI SOPARKAR, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Date : 10/12/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench ‘D’ (hereinafter referred to as ITAT) dated 02.08.2005 in ITA No. 1732/Ahd/2000 for the Assessment Year 1993-94, the revenue has preferred the present Tax Appeal. 2.This appeal was admitted on 22.09.2006 for consideration of the following substantial question of law: “Whether, the Hon’ble CIT(A) as well as ITAT was right in law and on facts in deleting the disallowance of Rs. 2,63,658/- in respect of provision for interest payment on Excise Duty Refund holding that same does not fall within the purview of section 43B of the IT Act, 1961” 2.1During the assessment proceedings the Assessing Officer found that the assessee had received excise duty refund amounting to Rs. 1,97,154/- in 1982. The Central Excise Department preferred appeal before this Court whereby the assessee was directed to provide interest on refund till the finalisation of the case. The assessee accordingly made provision of Rs. 2,63,658/- on this account in its books of account. The assessing officer disallowed the same u/s 43B of the Act on the ground that the amount has not actually been paid and also considering it as a contingent liability. On appeal before the CIT(A), the CIT(A) deleted the addition made by Assessing Officer. 2.2Being aggrieved by the order of the first appellate authority, the revenue preferred appeal before the Tribunal and the Tribunal vide impugned order dismissed the appeal and confirmed the order passed by CIT(A). Being aggrieved by the said order, the present appeal is filed. 3. An identical issue had come up before this Court and this Court vide order dated 07.11.2014 passed in Income Tax Reference No. 2 of 2005, in the case of the same assessee held as under: “3.Insofar as question no.2 is concerned, the issue is already concluded by the decision of the Apex Court in the case of CIT v. Dinesh Mills Ltd., (2008) 302 ITR 164 (Guj), wherein, it is held that interest could not be treated as a statutory liability as the principal amount itself was a decretal amount and there was no question of the said amount having the characteristic of duty under the Central Excise and Salt Act, 1944. Thus, question no.2 is answered against the Revenue and in favour of the assessee. 3. An identical issue had come up before this Court and this Court vide order dated 07.11.2014 passed in Income Tax Reference No. 2 of 2005, in the case of the same assessee held as under: “3.Insofar as question no.2 is concerned, the issue is already concluded by the decision of the Apex Court in the case of CIT v. Dinesh Mills Ltd., (2008) 302 ITR 164 (Guj), wherein, it is held that interest could not be treated as a statutory liability as the principal amount itself was a decretal amount and there was no question of the said amount having the characteristic of duty under the Central Excise and Salt Act, 1944. Thus, question no.2 is answered against the Revenue and in favour of the assessee. 4.Insofar as question no.3 is concerned, while computing the book profits u/s.115-J, the A.O started with the net profit figure for the year at Rs.1,18,09,809/- made up of first period profit of Rs.1,12,76,452/- and second period profit of Rs.5,33,357/-. In arriving at this profit, only two items, namely, transfer of investment allowance reserve of Rs.87,00,000/- and provision for taxation of Rs.40,00,000/- were debited to Profit and Loss Account and they were rightly added to the book profit under clause (a) & (b) of the Explanation to Section 115-J of the Act. To this extent, the computation of the A.O is proper. However, the A.O also added a sum of Rs.3,56,712/- being the amount of provision no longer required and excess depreciation written back. 5.It appears from the record that the above amount of Rs.3,56,712/- had not been debited to the Profit and Loss Account in arriving at the profit figure of Rs.1,18,09,809/- and therefore, the question of increase in book profit by Rs.3,56,712/- u/s.115-J of the Act. Under these circumstances, the addition of Rs.3,56,712/- to the book profits computed u/s.115-J of the Act was not justified and was rightly deleted. Therefore, the question no.3 is answered against the Revenue and in favour of the assessee. ” 4. Having heard learned advocates for the parties and considering the question posed for consideration for us reproduced hereinabove and considering the decisions cited, the question which is raised in the present appeal is required to be answered in favour of the assessee. We are not giving any elaborate reasons for the same as this Court in the case of very same assessee has answered the very same question in favour of assessee. 5. In view of the above, the question raised in the present appeal is answered in favour of the assessee and consequently, the impugned judgment and order passed by the Tribunal is confirmed. Hence, the present Tax Appeal is dismissed. (K.S.JHAVERI, J.) divya O/TAXAP/522/2006 JUDGMENT (K.J.THAKER, J)