Op/9951/1996 Of Commr. Of Income Tax v. Bee Vee Liquors

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE K.T.SANKARAN THURSDAY, THE 26TH JULY 2007 / 4TH SRAVANA 1929 OP.No. 9951 of 1996(S) ---------------------- AGAINST THE ORDER IN RA.226(COCH)/1994 IN ITA 211//COCH/92 of I.NCOME TAX APPELLATE .TRIBUNAL,COCHIN BENCH .................... PETITIONER: ------------ THE COMMISSIONER OF INCOME TAX, COCHIN. BY STANDING COUSNEL, GOVERNMENT OF INDIA (TAXES) SRI.P.K.RAVINDRANATHA MENON(SR.) SRI.GEORGE K. GEORGE. RESPONDENT: ------------- M/S. BEE VEE LIQUORS, NAYARAMBALAM, ERNAKULAM. THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 26/07/2007, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: H.L. DATTU, C.J. & K.T. SANKARAN, J. ---------------------------------------------------------- O.P.No.9951 of 1996 ----------------------------------------------------------- Dated, this the 26[th] day of July, 2007 JUDGMENT H.L. DATTU, CJ. This is a petition filed by the Revenue under section 256(2) of the IncomeTax Act, 1961, hereinafter for the sake of brevity referred to as the Act. 2. The assessee was before the Income Tax Appellate Tribunal, CochinBench in I.T.A. No.211/1992 for the assessment year 1981-82. The Tribunal hasallowed the assessee's appeal and thereby has set aside the orders passed bythe Commissioner of Income-tax (Appeals), Cochin, dated 31.12.1991. 3. The Revenue had filed an application under section 256(1) of theIncome Tax Act inter alia requesting the Tribunal to state the case and refer thequestions of law for consideration and decision of this court. The Tribunal hasrejected the said application/petition. That is how the Revenue is before us in thispetition filed under section 256(2) of the Act. 4. The Revenue has raised the following questions of law. They are asunder: “1. Whether, on the facts and in the circumstances of the caseand also in the light of the assessee's letter dated 29.9.1990 andthe income and expenditure account, was the assesseefollowing mercantile system of accounting? 2. Whether, on the facts and in the circusmtances of thecase and also in the light of the papers and documentsreferred to in question No.1, is not the understanding of the direction in the order of the Tribunal by the Revenue andthe consequential implementation correct and valid? 3. Whether, on the facts and in the circumstances of the case,the assessee is entitled to claim the kist amount on accruedbasis? 4. Whether, on the facts and in the circumstances of thecase and in view of the observation of the Tribunal inparagraph 6 of is order: “In law, if the mercantile system ofaccounting has been followed by the assessee” and hencethe Tribunal not finding the system of accounting by theassessee as regards the expenditure as mercantile, theTribunal is right in law and fact in holding that the kistamount of Rs.8,63,406/- has accrued due and the samewhether paid or not should be considered as eligible fordeduction? 5. Whether, on the facts and in the circumstances of the case,the assessee is entitled to claim deduction of the sum ofRs.8,63,406/- in the computation of income? 6. Whether, on the facts and in the circumstances of the case,the interpretation put on the earlier order of the Tribunal issustainable in law and fact? 5. After going through the orders passed by the Tribunal and afterperusing the questions of law framed by the Revenue, we are of the opinion thatthe questions of law raised by the Revenue requires consideration and decision by this court. Therefore we pass the following: Order i) The petition is allowed. ii) A direction is issued to the Income Tax Appellate Tribunal, Cochin Bench to state the case and refer the questions of law arising out of the orderpassed in ITA No.211/1992 for the assessment year 1981-82 as expeditiously aspossible. Ordered accordingly. H.L. DATTU, CHIEF JUSTICE. mt/ 6. Whether, on the facts and in the circumstances of the case,the interpretation put on the earlier order of the Tribunal issustainable in law and fact? 5. After going through the orders passed by the Tribunal and afterperusing the questions of law framed by the Revenue, we are of the opinion thatthe questions of law raised by the Revenue requires consideration and decision by this court. Therefore we pass the following: Order i) The petition is allowed. ii) A direction is issued to the Income Tax Appellate Tribunal, Cochin Bench to state the case and refer the questions of law arising out of the orderpassed in ITA No.211/1992 for the assessment year 1981-82 as expeditiously aspossible. Ordered accordingly. H.L. DATTU, CHIEF JUSTICE. mt/ K.T. SANKARAN, JUDGE. OP 9951/1996. H.L.DATTU, C.J. &K.T.SANKARAN, J. OP 9951 OF 1996 JUDGMENT 26.7.2007