The Commissioner Of Income Tax – 7, Mumbai v. National Organic Chemical Industries Ltd., Mumbai

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.3025 OF 2009 The Commissioner of Income Tax – 7, Mumbai Versus National Organic Chemical Industries Ltd., Mumbai ..Appellant. ..Respondent. Mr.Suresh Kumar for the appellant.None for the respondent. CORAM : Dr.D.Y. Chandrachud & J.P. Devadhar, JJ. DATE : 6 July, 2010. P.C. : 1.Nine questions of law have been formulated by the Revenue in this appeal under Section 260A of the Income Tax Act, 1961. The appeal pertains to assessment year 1987-88. 2.As regards question (a), the Tribunal has noted its own earlier decision. Learned Counsel appearing on behalf of the Revenue has also drawn the attention of the Court to the fact that a Division Bench of this Court, in the case of the assessee (Income Tax Appeal No.670 of 2008) decided on 15 October 2008, has declined to entertain the appeal involving a similar question raised by the Revenue. In this view of the matter, the first question does not give rise to any substantial question. 3.As regards question (b), the Tribunal has given a finding of fact that the purchaser to whom the assessee had supplied goods had issued forged cheques and that amount had become irrecoverable. In view of the finding of fact, the second question will not give rise to any substantial question. 4.As regards question (c), the Tribunal has come to the conclusion that the change in the method of accounting was bona fide and had been followed consistently subsequently. The Tribunal has also noted that there was no finding by the Assessing Officer or by the Commissioner of Income Tax (Appeals) that a true picture of the profits and gains of business was not ascertainable from the method of accounting adopted by the assessee for the relevant assessment year. Having regard to this finding, no substantial question of law would arise. 5.As regards question (d), the Tribunal has followed its view on question (c) which raises a similar issue. For the reasons indicated earlier, no substantial question of law would arise. As regards question (e), the Tribunal has relied upon the 3 judgment of the Supreme Court in Venkat Satyanarayana Rice Mill Contractors Co. Vs. Commissioner of Income Tax.[1] Learned Counsel appearing on behalf of the Revenue is unable to establish that the judgment of the Supreme Court is distinguishable. The question as framed does not raise any substantial question of law. 7.As regards question (f), Counsel appearing on behalf of the Revenue has stated before the court that a similar issue was decided against the Revenue in the judgment dated 15 October 2008 in Income Tax Appeal No.670 of 2008 referred to earlier. In view of the statement made on behalf of the Revenue, no substantial question of law would arise on this question. 8.As regards question (g), by the earlier judgment of this Court dated 15 October 2008 (supra), a Division Bench has declined to entertain the appeal of the Revenue on a similar question. In that view of the matter, question (g) will not raise any substantial question of law. 9.As regards question (h), the Tribunal has followed the principle of law laid down in the judgment of the Supreme Court in Madras Industrial Investment Corporation Limited V/s. Commissioner of Income Tax.[2] No substantial question of law would consequently arise. 10.As regards question (i), the Tribunal has noted that the Commissioner had followed the decision of the Tribunal for earlier assessment years viz assessment years 1979-80 and 1980-81. Counsel for the Revenue has not produced before the Court any material to indicate that the earlier view has been disturbed or that the facts are different. No substantial question of law would arise. 11. The appeal is accordingly dismissed. There shall be no order as to costs. (J.P. Devadhar, J.) (Dr.D.Y. Chandrachud, J.)