Pr. Commissioner Of Income Tax-2 v. Bharat Petroleum Corporation Ltd.,Taxation Section

DDR IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1488 OF 2017 Pr. Commissioner of Income Tax-2. ..Appellant vs. Bharat Petroleum Corporation Ltd.,Taxation Section ..Respondent …........ Mr. Suresh Kumar for appellant.Mr. Jehangir Mistri, Senior Counsel a/w. Mr. Atul Jasani forrespondent. …........ CORAM : NITIN JAMDAR & M.S.KARNIK, JJ. DATE : 13 JANUARY 2020 P.C.:- Heard learned counsel for the parties. 2.By this Appeal the Appellant challenges the order dated 19October 2016 in Income Tax Appeal No. 2258/Mum/2011 passedby the Income Tax Appellate Tribunal. 3.The Appeal pertains to the Assessment Year 2003-2004. 4.The following questions have been raised by the Appellant –Revenue as the substantial questions of law :- “(A) Whether on the facts and in the circumstances of the case in law, the Income Tax Appellate Tribunal was justified in holding that bottling of the gas into gas cylinders as a production activity for the purpose of 80H, 80I and 80IA ignoring the fact that no new production comes into existence in this process ?case in law, the Income Tax Appellate Tribunal was justified in holding that bottling of the gas into gas cylinders as a production activity for the purpose of 80H, 80I and 80IA ignoring the fact that no new production comes into existence in this process ? (B) Whether on the facts and in the circumstances of the case in law, the Income Tax Appellate Tribunal was justified in holding that bottling of the gas into gas cylinders as a production activity for the purpose of 80H, 80I and 80IA relying on the decision of the jurisdictional High Court in the case of CIT Vs. HPCL where in fact the Revenue has not accepted thisdecision ?case in law, the Income Tax Appellate Tribunal was justified in holding that bottling of the gas into gas cylinders as a production activity for the purpose of 80H, 80I and 80IA relying on the decision of the jurisdictional High Court in the case of CIT Vs. HPCL where in fact the Revenue has not accepted thisdecision ? (C)On the facts and circumstances of the case and in law, the Income Tax Appellate Tribunal erred in restrictingthe disallowance under Section 14A of the Income Tax Act read with 8D made by the Assessing Officer without appreciating that it was correctly worked out as per the method of calculation prescribed in Rule 8D of the Income Tax Rules, 1962 ?the Income Tax Appellate Tribunal erred in restrictingthe disallowance under Section 14A of the Income Tax Act read with 8D made by the Assessing Officer without appreciating that it was correctly worked out as per the method of calculation prescribed in Rule 8D of the Income Tax Rules, 1962 ? (D)On the facts and circumstances of the case and in law, the Income Tax Appellate Tribunal erred in restrictingthe disallowance under Section 14A of the Income Tax Act read with 8D made by the Assessing Officer without appreciating that the method of working of disallowance is held as reasonable method by jurisdictional High Court in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. CIT 328 ITR 81 (Bom) ?”the Income Tax Appellate Tribunal erred in restrictingthe disallowance under Section 14A of the Income Tax Act read with 8D made by the Assessing Officer without appreciating that the method of working of disallowance is held as reasonable method by jurisdictional High Court in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. CIT 328 ITR 81 (Bom) ?” 45. itxa 1488-17.doc 5.As far as first questions No. A and B are concerned, thedecision of the Supreme Court in the case of Commissioner ofIncome Tax vs. Hindustan Petroleum Corporation Ltd. [2017]396 ITR 696 (SC) is placed on record. It is a common ground thatin view of this dicta of the Supreme Court, the substantialquestions of law as framed will have to be answered against theAppellant – Revenue. 45. itxa 1488-17.doc 5.As far as first questions No. A and B are concerned, thedecision of the Supreme Court in the case of Commissioner ofIncome Tax vs. Hindustan Petroleum Corporation Ltd. [2017]396 ITR 696 (SC) is placed on record. It is a common ground thatin view of this dicta of the Supreme Court, the substantialquestions of law as framed will have to be answered against theAppellant – Revenue. 6.As regard questions of law Nos.C and D are concerned, theyproceed on the basis that principle laid down under Rule 8D ofthe Income Tax Rules, 1962 ought to have taken intoconsideration and applied in the case of the Respondent –Assessee. The Assessment Year in question is 2003-04. The Rule8D is held to applicable from the assessment years 2008-09 in thecase of Commissioner of Income Tax vs. Essar Teleholdings Ltd.[2018] 401 ITR 445 (SC). 7.In view of the above position, the questions of law cannot beconsidered as substantial questions of law. The Appeal isaccordingly disposed of. (M.S.KARNIK, J.) (NITIN JAMDAR, J.)