The Commissioner Of Income Tax - Ii, Pune v. M/S.patni Computer Systems Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2177 OF 2010 The Commissioner of Income Tax - II, Pune..Appellant. Versus M/s.Patni Computer Systems Limited..Respondent. Mr.Vimal Gupta for the appellant.Mr.S.N. Inamdar with Mr.Mihir Maniwadekar for the respondent. CORAM : J.P. Devadhar & Smt.R.P. Sondurbaldota, JJ. P.C. : DATE : 1[st] July, 2011. 1.Following questions of law have been raised by the Revenue in this appeal. i)Whether on the facts and in the circumstances of the case and i law, the ITAT did not err in directing the Assessing Officer to allow set off of the 10A unit losses against its business profits ignoring the specific provisions of sub-section (6) of section 10A which provides for set off of such losses only after the expiry of the last of the relevant assessment year ?ITAT did not err in directing the Assessing Officer to allow set off of the 10A unit losses against its business profits ignoring the specific provisions of sub-section (6) of section 10A which provides for set off of such losses only after the expiry of the last of the relevant assessment year ? ii) Whether on the facts and in the circumstances of the case and i law, the ITAT did not err in directing the AO to allow set off of the 10A unit losses against its business profits even though the assessee had not exercised the option under sub-section (8) of section 10A not to avail the benefit of Section 10A? the ITAT did not err in directing the AO to allow set off of the 10A unit losses against its business profits even though the assessee had not exercised the option under sub-section (8) of section 10A not to avail the benefit of Section 10A? iii) Whether on the facts and in the circumstances of the case and i law, the ITAT did not err in allowing the assessee's claim on account of write the ITAT did not err in allowing the assessee's claim on account of write off of loans given to the employees by holding that the same had been given in the ordinary course of business, when the loans so advanced were not in the nature of debts within the meaning of section 36(1)(vii) read with section 36(2) and also when the assessee's business was not in the nature of banking or money-lending ? iv) Whether on the facts and in the circumstances of the case and i law, the ITAT did not err in directing the AO to compute the assessee's interest liabilities under Section 234B and 234C after taking into account DTA tax credit ?the ITAT did not err in directing the AO to compute the assessee's interest liabilities under Section 234B and 234C after taking into account DTA tax credit ? v) Whether on the facts and in the circumstances of the case and i law, the ITAT did not err in holding that the amendment to Explanation 1 to section 234B and 234C brought in by the Finance Act, 2006, whereby relief of tax allowed u/s.90 or 90A or any tax deduction allowed u/s.91 came to be considered for the purpose of computing interest u/s.234B & 234C, only made explicit what was already implicit and thus was no more than clarificatory in nature ?the ITAT did not err in holding that the amendment to Explanation 1 to section 234B and 234C brought in by the Finance Act, 2006, whereby relief of tax allowed u/s.90 or 90A or any tax deduction allowed u/s.91 came to be considered for the purpose of computing interest u/s.234B & 234C, only made explicit what was already implicit and thus was no more than clarificatory in nature ? 2.As regards question (i) and (ii) are concerned, the issue is squarely covered against the Revenue by the judgment of this Court in the case of Hindustan Unilever Limited V/s. Deputy Commissioner of Income Tax reported in [2010] 325 ITR 102 (Bom) (para-29 thereof). Accordingly, first two questions cannot be entertained. 3.As regards question (iv) and (v) are concerned, similar questions 2.As regards question (i) and (ii) are concerned, the issue is squarely covered against the Revenue by the judgment of this Court in the case of Hindustan Unilever Limited V/s. Deputy Commissioner of Income Tax reported in [2010] 325 ITR 102 (Bom) (para-29 thereof). Accordingly, first two questions cannot be entertained. 3.As regards question (iv) and (v) are concerned, similar questions raised by the Revenue in the assessee's own case, being Income Tax Appeal No.4278 of 2009 have been rejected by this Court on 11th January 2011. For the reasons stated therein, question (iv) and (v) cannot be entertained. 4.As regards question (iii) is concerned, the finding of fact recorded by the Tribunal is that the assessee had advanced loans to its employees in the ordinary course of business. the Tribunal has recorded a finding of fact that it is not the case of the Revenue that the loans were in deviation from normal employment practices. There is also no dispute that these losses have become unrecoverable and the persons concerned are no longer in employment of the assessee company. 5.In our opinion, the decision of the Tribunal is based on finding of fact. No substantial question of law arises from the order of the Tribunal. The appeal is accordingly dismissed with no order as to costs. (Smt.R.P. Sondurbaldota, J.) (J.P. Devadhar, J.)