The Commissioner Of Income Tax-16 v. M/S. M. Ambalal And Co

IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. INCOME TAX APPEAL NO.2606 OF 2009 The Commissioner of Income Tax-16Vs.M/s. M. Ambalal and Co. .... Ms. Suchitra Kamble for the Appellant.Mr. Atul K. Jasani for the Respondent. ..... ..Appellant. ..Respondent. CORAM : DR.D.Y.CHANDRACHUD & J.P.DEVADHAR, JJ. P.C. : 15 June 2010. 1.The appeal is admitted on the following substantial question of law : “Whether on the facts and circumstances of the case and in law, the ITAT is right in law in holding that the sum of Rs.79,18,597/- cannot be assessed to income tax during the A.Y. 2001-02 under Section 41(1) of the Income Tax Act, 1961;” 2.In these proceedings under Section 260-A of the Income Tax Act, 1961 the Revenue is in appeal against an order passed by the Tribunal deleting an addition made by the Assessing Officer in the amount of Rs.79,18,597/- under Section 41(1) of the Act. An affidavit has been filed by the Assessing Officer on 5 March 2010 in which it has been stated that the same amount has also been added for Assessment Year 2007-08. However, it has been stated that the revenue would wish to pursue the addition made for Assessment Year 2001-02 (out of which the present appeal has arisen) and in the event that the present appeal is allowed, the addition shall be deleted for Assessment Year 2007-08. Counsel appearing on behalf of the Revenue has, on seeking instructions today from the Assessing Officer, once again reiterated this position. 3.Counsel appearing on behalf of the assessee has stated that with a view to resolving the entire issue the assessee accepts the addition which has been made by the Assessing Officer for Assessment Year 2001-02 reserving the right of the assessee to contest the issue as regards the imposition of a penalty under Section 271(1)(c) in the event an appeal is filed by the Revenue against the deletion of the penalty. In the event of such an appeal being filed, it has been stated that the concession which has been made in the present appeal should not foreclose the assessee from urging all contentions on merits. In the circumstances, in view of the statement which has been made on behalf of the assessee, the impugned order of the Tribunal is set aside to the aforesaid extent by answering the question of law in the negative and in favour of the Revenue. The Appeal shall stand disposed of in the aforesaid terms. There shall be no order as to costs. (Dr. D.Y.Chandrachud, J.) (J.P. Devadhar, J.)