The Commissioner Of Income Tax-2,Mumbai v. Raymond Ltd

srk IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1558 OF 2010 The Commissioner of Income Tax-2,Mumbai ...Appellant Versus Raymond Ltd. ...Respondent Mr.Suresh Kumar for appellant. Mr.Percy J. Pardiwala, Senior Advocate with Mr.Mohan Salian, Ms.Vaijayanta Shete and Mr.Jainuddin Khan i/b. Gagrats for respondents. CORAM: DR.D.Y. CHANDRACHUD & M.S.SANKLECHA, JJ. March 21, 2012. P.C. 1.This appeal by the Revenue arises from a decision of the Income Tax Appellate Tribunal dated 1 May 2009; the Assessment Year to which the appeal relates being AY 2000-2001. The following questions of law are raised on behalf of the Revenue: (i)Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in deleting the addition made by disallowing VRS expenditure of Rs.90.82 lakhs, which was treated as capital in nature; (ii)Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in deleting to withdraw the depreciation in relation to preoperative expenses, which were treated as capital in nature; (iii)Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in deleting the addition made on account of prior period expenditure under Section 115JA since the said expenditure was not on account of ascertained liability; (iv)Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in upholding the CIT(A)’s order that the entire exempt income credited to the P & L account had to be reduced while computing the book profit under Section 115JA? 2.Counsel appearing on behalf of the Revenue and the counsel appearing on behalf of the assessee are agreed and state that the following questions will stand covered in following terms: 1. Question (i) would stand covered in favour of the assessee and against the Revenue by the judgment rendered today in companion Income Tax Appeal No.1559 of 2010 pertaining to Assessment Year 1999-2000.against the Revenue by the judgment rendered today in companion Income Tax Appeal No.1559 of 2010 pertaining to Assessment Year 1999-2000. 2. Question (iii) would stand covered in favour of the assessee by the decision rendered in companion Income Tax Appeal No.1556 of 2010 on 20 March 2012.decision rendered in companion Income Tax Appeal No.1556 of 2010 on 20 March 2012. 3. As regards question (ii), the Tribunal has come to the conclusion that since the preoperative expenses were allowed as revenue expenditure, the depreciation which had been allowed thereon would have to be withdrawn. This possibly cannot give rise to a substantial question of law, much less a question of law at the behest of the Revenue.that since the preoperative expenses were allowed as revenue expenditure, the depreciation which had been allowed thereon would have to be withdrawn. This possibly cannot give rise to a substantial question of law, much less a question of law at the behest of the Revenue. 3.The appeal is admitted on question (iv) and is taken up for hearing and final disposal by consent at this stage. 4.Counsel appearing on behalf of the Revenue and the counsel appearing on behalf of the assessee are agreed that this question would be governed by the decision rendered today in companion Income Tax Appeal No.1559 of 2010 pertaining to AY 1999-2000 and the issue may be restored to the file of the Tribunal for its decision afresh. Ordered accordingly. Hence it is not necessary for the Court to answer question (iv). 5.The appeal shall accordingly stand disposed of. There shall be no order as to costs. (DR.D.Y. CHANDRACHUD,J.) (M.S.SANKLECHA, J.)