THE FERTILISERS AND THE CHEMICALS TRAVANCORE LTD., vs. COMMISSIONER OF INCOME TAX,

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ITA/8/2007HC KeralaKLHC01025002200702 November 2018Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR. JUSTICE ASHOK MENON3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held against the assessee on the issue. Following its previous judgment in ITA No. 43 of 2003, dated October 9, 2018, which dealt with the same appellant, the Court rejected the appeal. The question of law was answered in favour of the Revenue and against the assessee. The reasoning is based on the prior decision of the High Court on the identical issue. The operative direction is the dismissal of the appeal. No issue was expressly left undecided.

What were the facts?

The appeal is filed by The Fertilisers and Chemicals Travancore Ltd. (assessee) against the order of the Income Tax Appellate Tribunal, Cochin Bench, dated June 26, 2006. The Commissioner of Income Tax is the respondent (revenue). The assessment year(s) are not explicitly stated in this excerpt. The core of the dispute concerns the deductibility of foreseeable losses on contracts before their conclusion, considering liabilities ascertained at various stages. The High Court notes that it has already decided against the same appellant in ITA No. 43 of 2003 by a judgment dated October 9, 2018.

What were the issues?

1. Whether a foreseeable loss on a contract can be claimed as a deduction before the contract is concluded, considering the liability ascertained at various stages (question of law/mixed law and fact). Assessee's contention: The assessee contended that foreseeable losses on contracts could be claimed as deductions. The judgment does not explicitly detail the assessee's arguments or the authorities/precedents relied upon, other than the general nature of the claim. Revenue's contention: The revenue contended against the deductibility of such foreseeable losses. The judgment does not explicitly detail the revenue's arguments or the authorities/precedents relied upon.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON FRIDAY, THE 02ND DAY OF NOVEMBER 2018 / 11TH KARTHIKA, 1940 ITA. No.8 of 2007 AGAINST THE ORDER IN ITA NO.464/2005 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH DATED 26-06-2006 APPELLANT/APPELLANT: THE FERTILISERS AND THE CHEMICALS TRAVANCORE LTD., UDYOGAMANDAL. BY ADVS. SRI.ANIL D. NAIR SRI.E.K.NANDAKUMAR (SR.) RESPONDENT /RESPONDENT: COMMISSIONER OF INCOME TAX, KOCHI SRI PKR MENON SR FOR GOI TAXES THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 02.11.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA. No.8 of 2007

JUDGMENT K. Vinod Chandran, J. The only issue arising in the above appeal is as to whether the foreseeable loss in contract could be claimed as a deduction before the contract is concluded, considering the liability ascertained at the various stages. We have already held against the very same appellant in ITA No.43 of 2003 by judgment dated 09.10. 18. We hence follow the aforesaid judgment and reject the above appeal answering the question in favour of the Revenue and against the assessee. K. VINOD CHANDRAN JUDGE ASHOK MENON JUDGE sp/07/11/18 //P.A. To Judge

ITA. No.8 of 2007 APPENDIX OF ITA 8/2007 PETITIONER'S EXHIBITS: ANNEXURE-AOF THE ASSESSMENT ORDER FOR THE YEAR 1998-99 DATED 15/01/2004 PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE I, ALUVA. ANNEXURE-BOF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, DATED 06/12/2004 FOR THE ASSESSMENT YEAR 1998-99. ANNEXURE-C CERTIFIED COPY OF THE COMMON ORDER IN ITA NO.464/COCH/2005, DATED 26/06/2006 OF THE RESPONDENT FOR THE ASSESSMENT YEAR 1998-99.

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