The Commissioner Of Income Tax (Central), Pune v. Finolex Cables Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (L) NO.1369 OF 2012 The Commissioner of Income Tax (Central), Pune ..Appellant. Versus Finolex Cables Limited..Respondent. Mr.Vimal Gupta, Senior Advocate i/by Ms.Padma Divakar for the appellant.Mr.S.N. Inamdar, Senior Advocate with Mr.Mihir Naniwadekar for the respondent. CORAM : J.P. Devadhar &M.S. Sanklecha, JJ. DATE : 30[th] January 2013 P.C. : 1.In this appeal filed by the Revenue for assessment year 1998- 1999, following questions of law have been proposed for our consideration. a)Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified insetting aside the order of CIT (A) and direct the AO to allow the claim of the assessee for set off of loss of M/s.Finoram Sheets Limited as claimed in its revised return filed on 31-3-2000 ? b)Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in allowing relief to the assessee in computation of deduction under Section 80IA of the Act without appreciating the reasons mentioned by the assessing officer for reducing the said claim made by the assessee in its return of income ? c)Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in not appreciating the fact that Urse-II and Pimpri Unit-II was only expansion of existing ongoing industrial undertaking and was not a new industrial undertaking and hence do not qualify for separate deduction under Section 80IA of the Act ? d)Whether on the facts and in the circumstances of the case and in law, the Tribunal did not erred in holding Urse-II and Pimpri-II are independent units eligible for deduction under Section 80IA by not appreciating the findings of the assessing officer that Urse Unit – II and Pimpri Unit – II are mere extensions of the existing Urse Unit – I and Pimpri Unit – I ? e)Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that 90% of the income by way of lease rent need not be reduced as per Explanation (baa) to Section 80HHC from the business profit for the purpose of computation of deduction under Section 80HHC ? f)Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the loss on exchange fluctuation on account of Power Contracts was speculation loss in terms of Section 43(5) of the Act ? g)Whether on the facts and in the circumstances of the case and in law, the Tribunal erred in not allowing its own decision in the case of the assessee for Ays 1994-1995 and 1995-1996 on the issue of disallowance of depreciation on leased out assets and in setting aside the matter and restoring the issue back to the file of assessing officer in the year under consideration ? 2.As regards question (a) is concerned, counsel on both sides state that the said issue is concluded by the decision of this Court in the matter of Commissioner of Income Tax V/s. Swastik Rubber Products Limited reported in (1983) 140 ITR 304 (Bom). Mr.Gupta, learned Advocate appearing for the Revenue relied upon the decision of the Supreme Court in the matter of Marshall Sons and Co (India) Limited V/s. Income-tax Officer reported in (1997) 223 ITR 809, wherein the Court had observed that : “We, however, make it clear that we have not expressed any opinion on the plea of the learned counsel for the Revenue that the amalgamation itself is a device designed to evade the taxes legitimately payable by the subsidiary company. If the income-tax authorities think that they are entitled to raise this question in the proceedings under the income-tax Act, it is open to them to do so by way of separate proceedings according to law.” The aforesaid observations of the Supreme Court only enables the matter of Marshall Sons and Co (India) Limited V/s. Income-tax Officer reported in (1997) 223 ITR 809, wherein the Court had observed that : “We, however, make it clear that we have not expressed any opinion on the plea of the learned counsel for the Revenue that the amalgamation itself is a device designed to evade the taxes legitimately payable by the subsidiary company. If the income-tax authorities think that they are entitled to raise this question in the proceedings under the income-tax Act, it is open to them to do so by way of separate proceedings according to law.” The aforesaid observations of the Supreme Court only enables the Revenue to challenge the order of the Court sanctioning amalgamation in accordance with law. Once the Court has sanctioned the amalgamation, it is not open to the Revenue to disregard the same unless the same is varied by a competent Court. In view of above, question (a) cannot be entertained. 3.So far as questions (b), (c) and (d) are concerned, counsel on both sides state that the same are covered against the Revenue and in favour of the assessee by a decision of this Court in the assessee's own case in Income Tax Appeal No.129 of 2011 rendered on 1[st] March 2012. Accordingly, questions (b), (c) and (d) cannot be entertained. 4.So far as question (e) is concerned, counsel on both sides state that the said issue has been considered and not entertained by this Court in the assessee's own case in Income Tax Appeal No.162 of 2010 rendered on 1[st ] March 2012. For the reasons stated therein, question (e) cannot be entertained. 5.So far as question (f) is concerned, it is not in dispute that the issue raised therein stands covered by the decision of this Court in the matter of Commissioner of Income Tax V/s. Badridas Gauridu (P) Limited reported in (2003) 261 ITR 256 (Bom). In view thereof, question (f) cannot be entertained. 6.So far as question (g) is concerned, as the matter has been remanded back to the file of the assessing officer in the light of the order of this Court in the assessee's own case in Income Tax Appeal No.1106 of 2011 rendered on 1[st] March 2012, question (g) cannot be entertained. All contentions of both the parties are kept open 7.The appeal is accordingly disposed of in above terms with no order as to costs. (M.S. Sanklecha, J.) (J.P. Devadhar, J.)