THE PRINCIPAL COMMISSIONER OF INCOME TAX 2 vs. GUJARAT STATE FINANCE CORPORATION

Facts

The Principal Commissioner of Income Tax 2 (the appellant/revenue) has appealed against an order dated 16.7.2018 passed by the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench 'A'. The ITAT's order in ITA No.994/Ahd/2015 upheld the deletion of a disallowance of Rs.3,89,90,537/- made by the Assessing Officer. This disallowance was related to a provision for bad and doubtful debts made by the assessee, Gujarat State Finance Corporation. The revenue's appeal to the High Court is based on a proposed substantial question of law. The ITAT had relied on its own prior decision in the assessee's case for assessment year 2006-07. The revenue had appealed that earlier ITAT order to the High Court, which was dismissed.

Held

The High Court held that the appeal did not give rise to any question of law, much less a substantial question of law, warranting interference. The court noted that the controversy involved in the present appeal was concluded by the High Court's earlier decision dated 14.8.2018 in Tax Appeal No. 984 of 2018, which had dismissed the revenue's appeal against the ITAT's order in the assessee's own case for assessment year 2006-07. For the reasons recorded in that earlier order, the present appeal was summarily dismissed. The specific reasoning of the ITAT regarding the deletion of the disallowance was not detailed in this judgment, as the appeal was dismissed on the ground that no substantial question of law arose.

Key Issues

1. Whether the Appellate Tribunal has erred in law and on facts in upholding the decision of the CIT (A) of deletion of disallowance amounting to Rs.3,89,90,537/- made by the Assessing Officer on account of provision of bad and doubtful debts made by assessee? (Question of law and fact, concerning provisions related to bad and doubtful debts). Assessee's Contention: Not recorded in the judgment. Revenue's Contention: The revenue contended that the Appellate Tribunal erred in law and facts by upholding the deletion of the disallowance made by the Assessing Officer regarding the provision for bad and doubtful debts. The revenue relied on the fact that the ITAT's decision was based on its own prior ruling in the assessee's own case for assessment year 2006-07. The revenue had appealed that earlier decision to the High Court, which was dismissed.