Lakshmi Automatic Loom Works Limited v. Directorate Of Income Tax (Recovery) & Anr

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI 14. + W.P.(C) 1568/2015 LAKSHMI AUTOMATIC LOOM WORKS LIMITED ..... Petitioner Through: Mr. Vivek Sibal, Ms. Pooja M. Saigal and Mr. Jitender Ratta, Advocates. versus DIRECTORATE OF INCOME TAX (RECOVERY) & ANR. ..... Respondents Through: Mr. D. R. Jain, Senior Standing counsel. CORAM: JUSTICE S. MURALIDHAR JUSTICE VIBHU BAKHRU O R D E R% 15.02.2016 W.P.(C) 1568/2015 & CM No. 2798/2015 (for stay) 1. On 27[th] November 2014, this Court passed the following order: "In this writ petition, the grievance which has been raised with regard to the order dated 29.11.2012 passed by the Joint Director of Income Tax (Recovery) is that the relief relating to capital gains tax under Section 45 on sale of assets has been disallowed on the basis of projected figures and not on the basis of actual figures. When the proposal was submitted by the petitioner to the respondents in 2008, the same was based on projections for the subsequent years. The order was ultimately passed in 2012 when the actuals were available. The actuals had been called for by the respondents and had been supplied by the petitioner. Yet, only the projections were taken into account and the actuals were ignored. The grievance of the petitioner is that the relief relating to capital gains tax ought to have been construed on the basis of actuals and not projections. The learned counsel for the respondents submits that these proposals are always considered on the basis of projections and if there is any difference between the projections and the actuals to the detriment of the proposer, the same would have been absorbed by the latter. The learned counsel for the respondents shall produce some materials/documents to substantiate this plea of his. Renotify on 15.02.2016.” 2. Learned counsel for the Respondents has not been able to substantiate the plea that if there is any difference between the projections and the actuals to the detriment of the proposer, that would have to be absorbed by the proposer. Learned counsel for the Respondents drew the attention of the Court to the order passed by the Appellate Authority for Industrial and Financial Reconstruction (‘AAIFR’). That order requires the Income Tax Department to accept or reject the plea for grant of a concession or relief in terms of the Scheme presented before the BIFR. The AAIFR observed that “the Department should have only considered the proposed concession and taken its own decision.” That order does not by any means suggest that when there are actual figures available at the time of the decision to be taken by the Department, reliance can be placed on the projections of the Petitioner which were submitted at the time of submission of the scheme before the BIFR. In any event, it does not support the plea of the Revenue that the difference between the actuals and the projected figures should be absorbed by the Petitioner. 3. Consequently, while setting aside the order dated 29[th] November 2012 Page 2 of 3 passed by the Directorate of Income Tax (‘DIT’) Recovery, the Court requires the DIT (Recovery) to once again consider the proposed scheme and the question of entitlement of the Petitioner to concession as sought for by the Petitioner. A fresh decision based on the actual figures submitted by the Petitioner will be taken. It is open to the Department to elicit all the necessary information that is required by from the Petitioner in a time bound manner and take a fresh decision not later than eight weeks from today. If the Petitioner makes a request in that regard, a hearing will also be afforded to the Petitioner before the decision is taken. 4. The petition and the application are disposed of in the above terms. Page 2 of 3 passed by the Directorate of Income Tax (‘DIT’) Recovery, the Court requires the DIT (Recovery) to once again consider the proposed scheme and the question of entitlement of the Petitioner to concession as sought for by the Petitioner. A fresh decision based on the actual figures submitted by the Petitioner will be taken. It is open to the Department to elicit all the necessary information that is required by from the Petitioner in a time bound manner and take a fresh decision not later than eight weeks from today. If the Petitioner makes a request in that regard, a hearing will also be afforded to the Petitioner before the decision is taken. 4. The petition and the application are disposed of in the above terms. 5. It is clarified that nothing stated in the present order or in the previous order of the Court should be construed as an expression by the Court of any opinion on the merits of the case and in particular the relief sought for by the Petitioner from the Department. 6. Order dasti. S. MURALIDHAR, J FEBRUARY 15, 2016 dn VIBHU BAKHRU, J W.P.(C) No. 1568/2015 Page 3 of 3