Pr. Commissioner Of Income Tax, Jaipur-Ii, Jaipur v. The Appellant Has Framed The Following Four Substantial

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 5/2018 Pr. Commissioner Of Income Tax, Jaipur-Ii, Jaipur. ----Appellant Versus M/s. Modern Threads I Ltd., A-4, Vijay Path, Tilak Nagar, Jaipur----Respondent For Appellant(s) : Mr. Prateek Kedavat for Mr. RB MathurFor Respondent(s): Mr. Sanjay Jhanwar HON'BLE MR. JUSTICE ALOK SHARMA HON'BLE MR. JUSTICE NARENDRA SINGH DHADDHAJudgment 25/04/2019 The appellant has framed the following four substantial questions of law which he asserts arise in this appeal: “1.Whether in the facts and circumstances ofthe case, the Tribunal was justified in deletingthe additions of Rs.39195608/- made by theAssessing Officer on account of remission ofPrincipal amount of loan?2.Whether in the facts of the present caseremission of principal amount of loan obtainedfrom financial institution and banks constitutesa benefit or perquisite arising from businessand would fall within the ambit of section28(iv) of the Act?3.Whether in the facts and circumstances ofthe case and in law, the ITAT was justified indeleting the additions of Rs. 990079/- madeu/s 145A on account of excise duty leviable onclosing stock? 4.Whether in the facts and circumstances ofthe case and in law the ITAT was justified inholding that employees’ contribution to PF andESI governed by the provision of section 43Band not by section 36(1)(va) r.w.s. 2(24)(x) ofthe IT Act? The appeal coming up before this Court on 16.1.2018, it was dismissed with the court recording by a detailed order that the substantial question of law propagated were not made out by judgments earlier rendered by the Apex Court and High Court. A D.B. Civil Misc. Application No. 178/2018 against the judgment dated 16.1.2018 then came to be filed. The Court on the submission made noted that the judgment dated 16.1.2018 indeed did not address the third substantial question of law as agitated in the appeal and it was left unaddressed quite apparently by an oversight. Hence the Court found vide order dated 12.12.2018 that there was error apparent on the face of the record of the judgment dated 16.1.2018 warranting and justifyingits review. The appeal has now consequently come up before us. Counsel for the appellant does not put to question the Division Bench’s conclusion under its judgment dated 16.1.2018 that no substantial question of law as set up under question No. 1, 2 and 4 was made out. Counsel has fairly stated that whattherefore remains is consideration of the third substantial questionof law as propagated in this appeal. Mr. Sanjay Jhanwar appearing for the respondent- assessee on that aspect at the outset submitted that the third question of law set up by the revenue in the appeal in question is also no longer res-integra in view of the judgment of this Court in the case of Commissioner of Income Tax Versus Rajasthan State Ganganagar Sugar Mills Ltd. & Ors. (D.B. Income Tax Appeal Nos. 99, 212, 539 of 2009, 95, 655, 98 of 2011, 244, 120 of2012, 99 of 2014 and 66 of 2015; decided on 26.5.2016) – MANU / HR / 1550 / 2016. He pointed out that the substantial question of law in the said D.B. Income Tax Appeals before the Court was: “Whether in the facts and circumstances ofthe case, the Tribunal was justified in law in holdingthat the excise duty is not leviable as the goods arenot transferred and as such the same cannot beadded in closing stock contrary to provisions ofSection 145A of the Act? He submitted that dealing with the said substantial question of law, the Court relying on the judgment of the Apex Court in the case of Wallace Flour Mills Co. Ltd. Versus Collector of Central Excise 1989 SCC (4) page 592 held in para 39 as under: “In so far as the second question aboutexcise duty is concerned, in our opinion, the liabilityto excise arises when goods are removed from the question of law in the said D.B. Income Tax Appeals before the Court was: “Whether in the facts and circumstances ofthe case, the Tribunal was justified in law in holdingthat the excise duty is not leviable as the goods arenot transferred and as such the same cannot beadded in closing stock contrary to provisions ofSection 145A of the Act? He submitted that dealing with the said substantial question of law, the Court relying on the judgment of the Apex Court in the case of Wallace Flour Mills Co. Ltd. Versus Collector of Central Excise 1989 SCC (4) page 592 held in para 39 as under: “In so far as the second question aboutexcise duty is concerned, in our opinion, the liabilityto excise arises when goods are removed from the factory / bonded warehouse. The taxable event ismanufacture / production but the liability to pay theduty is postponed till the time of removal under rule9A. In our view, under Section 145A only the tax duty,cess or fees actually paid or incurred by the assesseeto bring the goods to its place of location forms partvalue of stock. Unpaid excise duty on goods in stockthat have not left the premises / factory / bondedwarehouse, could not be added to the value of closingstock. We have taken into consideration the judgmentsof the apex court in the case of Wallace Flour Mills Co.Ltd. Versus Collector of Central Excise (supra) and CITV. Dynavision Ltd. to come to the aforesaid opinion. Infact, even the Revenue has relied upon the judgmentof Wallace Flour Mills Co. Ltd. V. Collector of CentralExcise (supra) but in our view, taking intoconsideration the view of the apex court that a taxableevent though is manufacture but the liability to payduty is postponed till the time of removal under rule9A of the said Rules an admittedly, there is a finding offact recorded by the authorities that the goods werelying in the bonded warehouse / factory, in our view,the judgment of the Wallace Flour Mills Co. Ltd. v.Collector of Central Excise (supra) supports thecontention of the assessee rather than of theRevenue.” Mr. Sanjay Jhanwar submitted that in this view of the matter, the third question of law agitated by the appellant in this appeal which no doubt was accidently overlooked by the Court under its judgment dated 16.1.2018 and which entailed the review of the said judgment vide order dated 12.12.2018 has earlier been decided to the benefit of an assessee similarly placed and hence can not be made out in this appeal. Mr. Prateek Kedawat appearing for Mr. R.B. Mathur for the appellant has not been able to proffer any argument contrary to the submissions of Mr. Sanjay Jhanwar. Consequently, we would hold reiterating the conclusions of substantial questions of law no. 1, 2 and 4 in the court’s order dated 16.1.2018 that none of the aforesaid four substantial questions of law framed in this appeal are made out. Resultantly, this appeal is dismissed. (NARENDRA SINGH DHADDHA),JDILIP KHANDELWAL (ALOK SHARMA),J