M/S.APOLLO TYERS LIMITED vs. THE DEPUTY COMMISSIONER OF INCOME TAX
What did the High Court hold?
The High Court held that the substantial questions of law raised in the instant appeal were similar or identical to substantial question no.(c) in ITA No. 249/2015. On August 26, 2021, question no.(c) in ITA No. 249/2015 was answered in favour of the Revenue and against the assessee. By adopting the reasons stated in that prior decision, the High Court answered the questions in the present appeal in favour of the Revenue and against the assessee. The observations made in ITA No. 249/2015 were applied to the instant assessment year. The operative direction was to follow the reasoning in the previous judgment, implying confirmation of the ITAT's order.
What were the facts?
M/s. Apollo Tyres Limited (the assessee) is the appellant, and the Deputy Commissioner of Income Tax, Circle-1(1), Ernakulam (the revenue) is the respondent. The assessee is challenging an order dated July 24, 2017, passed by the Income Tax Appellate Tribunal (ITAT), Cochin Bench, in ITA No. 35/2017. The appeal pertains to the assessment year 2012-13. The core of the dispute involves the disallowance of a year-end provision for commission payment amounting to Rs. 1,11,08,106/- as an unascertained liability.
What were the issues?
The Tribunal had to decide two substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the ITAT erred in confirming the disallowance of Rs. 1,11,08,106/- being year-end provision for payment of commission as an unascertained liability? 2. Whether, on the facts and in the circumstances of the case, there is any material or evidence on record to justify the finding of the Appellate Tribunal that the sum of Rs. 1,11,08,106/- cannot be allowed as deduction for the assessment year in question? The assessee contended that the provision for commission was a deductible expense. The revenue argued that it was an unascertained liability and therefore not deductible. The judgment notes that the substantial questions of law raised in this appeal are similar or identical to substantial question no.(c) in ITA No. 249/2015, which was decided on the same day.
Which sections of the Income-tax Act were involved?
None explicitly mentioned in the provided text, other than the general reference to the Income Tax Act in the context of the appeal.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
J U D G M E N T S.V. Bhatti, J. Heard learned Senior Counsel Mr Joseph Markos and learned Standing Counsel Mr Christopher Abraham for parties.
M/s. Apollo Tyres Ltd Kochi/Assessee is the appellant. The Assistant Commissioner of Income Tax, Circle- 1(1), Ernakulam/Revenue is the respondent.
1 The assessee assails the order dated 24.07.2017 of the Income Tax Appellate Tribunal (for short ‘Tribunal) Cochin Bench in ITA No.35/Coch/2017. The issues relate to the return filed by the assessee for the Assessment Year 2012-13. The appeal is admitted on the following substantial questions of law: “a) Whether on the facts and in the circumstances of the case the ITAT erred in confirming the disallowance of Rs. 1,11,08,106/- being year-end provision for payment of commission as an unascertained liability? b) Whether, on the facts and in the circumstances of the case, there is any material or evidence on record to justify the -3- finding of the Appellate Tribunal that the sum of Rs. 1.11.08,106/- cannot be allowed as deduction for the assessment year in question?
The learned Counsel appearing for the parties state that the substantial questions of law raised in the instant appeal are similar or identical to substantial question no.(c) in the appeal filed by the assessee in ITA No.249/2015. On 26.08.2021, in ITA No.249/2015, question no.(c) was answered in favour of the Revenue and against the assessee. By adopting the reasons stated therein the question is answered in favour of the Revenue and against the assessee, and the observations made therein shall apply to the instant Assessment Year as well. S.V.BHATTI JUDGE VIJU ABRAHAM JUDGE jjj -4-
Appendix — schedule of exhibits
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