BHARAT SURYODAYA MILLS CO LTD vs. COMMISSIONER OF INCOME TAX

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ITR/291/1984HC GujaratGJHC24011956198419 January 2000Author: HONOURABLE DR. JUSTICE J.N.BHATT,HONOURABLE MR. JUSTICE C.K.BUCH2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that the reference was very old, dating back approximately 16 years. Despite notice being served on the assessee, no one appeared on its behalf to assist the Court. The Court expressed helplessness in dealing with the reference due to the absence of the assessee's appearance and assistance, attributing it to potential apathy or indifference. Consequently, the High Court decided that the reference deserved rejection in default. The reference was disposed of as not answered. No decision was made on the merits of the question of law referred.

What were the facts?

The assessee, Bharat Suryodaya Mills Co Ltd, had made a provision for bonus of Rs. 8,40,000 in its books of account. The Assessing Officer disallowed a part of this provision, amounting to Rs. 4,64,400, on the basis that it was not a legal liability on the closing date of the books of account. The assessee appealed this disallowance. The Income-tax Appellate Tribunal upheld the disallowance. The assessee then sought a reference to the High Court on a question of law. The High Court noted that the reference was very old and that the assessee, despite being served notice, did not appear to assist the Court.

What were the issues?

1. Whether, in the facts and circumstances of the case, the Tribunal was right in law in upholding the disallowance of part provision of Rs. 4,64,400 out of provisions of bonus Rs. 8,40,000 made in the books of account on the basis of the legal liabilities on the date of closing the books of accounts? Assessee's Contention: The assessee company sought the reference to the High Court, implying disagreement with the Tribunal's decision upholding the disallowance. However, the judgment does not record specific arguments made by the assessee before the High Court. Revenue's Contention: The revenue, represented by the Commissioner of Income Tax, was present through its counsel. The judgment does not record specific arguments made by the revenue before the High Court.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 291 of 1984

For Approval and Signature:

Hon'ble MR.JUSTICE J.N.BHATT and

MR.JUSTICE C.K.BUCH

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- BHARAT SURYODAYA MILLS CO LTD Versus COMMISSIONER OF INCOME TAX -------------------------------------------------------------- Appearance: NOTICE SERVED for Petitioner MR BB NAIK WITH MR MANISH R BHATT for Respondent No. 1

--------------------------------------------------------------

CORAM : MR.JUSTICE J.N.BHATT and MR.JUSTICE C.K.BUCH Date of decision: 19/01/2000

ORAL JUDGEMENT(Per J.N.Bhatt, J.) When the matter was called out, again, today, none

appeared for and on behalf of the applicant, whereas, learned counsel Mr B.B.Naik for the respondent was present. For our opinion, the following question has been referred by the Income-tax Appellate Tribunal, at the instance of the assessee company:

"Whether in the facts and circumstances of the case the Tribunal was right in law in upholding the disallowance of part provision of Rs.4,64,400/- out of provisions of bonus Rs.8,40,000/- made in the books of account on the basis of the legal liabilities on the date of closing the books of accounts ?"

It is reported by the Office that notice has already been served on the assessee. Despite that, it chose not to appear and assist the Court, presumably, because the assessee may not, now, be inquisitive to have a judicial opinion of this Court, upon the question referred to, at its instance.

Again, this reference is very old and is almost as old as 16 years. In the circumstances, this Court has to raise its hands in helplessness from dealing with the reference sent to us for our opinion in absence of the assessee's appearance and assistance, if not apathy or indifference.

In the result, the reference deserves the only fate of rejection in default. Accordingly, the reference shall stand disposed of as not answered.

....

(vjn)

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