THE C.I.T.B. C-XI. vs. ROUSSEL PHARMACAUTICALS INDIA LTD.

ITR230.97

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX REFERENCE NO. 230 OF 1997 Commissioner of Income Tax, ] Bombay City-XI, Bombay. ] ... Applicant Vs Roussel Pharmaceuticals India Limited ] D. Shivsagar, Dr. Annie Beasant Road, ] Worli, Bombay – 400 018. ] ... Respondent Mr. Suresh Kumar for the Applicant. Mr. Sanjiv M. Shah for the Respondent. CORAM : S.J. VAZIFDAR, & M.S. SANKLECHA, JJ. FRIDAY, 7TH SEPTEMBER, 2012 JUDGMENT : [Per S.J. Vazifdar, J.] 1. The Income Tax Appellate Tribunal has referred the following question of law for the opinion of this Court :- “Whether on the facts and in the circumstances of the case, the Tribunal was right in fact and law in SRP                                                                                                                                                           1/5 CNR No : HCBM020034961997 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:34

ITR230.97 holding that section 201(1) read with section 192 of the Income Tax Act was not applicable in the instant case ?” 2. The Reference arises out of the order of the Tribunal dated 15th May, 1995 in ITA No.1938/Bom/1990 relating to assessment year 1987-88. 3. The Assessing Officer held that various payments such as driver's salary, servant's salary, car running expenses, house maintenance expenses, lunch expenses, electricity/gas expenses were not included in the salaries of the respondent-assessee's employees for the purpose of TDS. The Assessing Officer, accordingly, worked out the short deduction and proceeded under section 201. 4. The Commissioner of Income Tax (Appeals) directed the Assessing Officer to verify the respondent's claim after giving it an opportunity of being heard and of producing necessary evidence. He, inter-alia, held that the quantum of short deduction is to be worked SRP                                                                                                                                                           2/5 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:34

ITR230.97 out on actual basis and not on the basis of an estimate. He, therefore, directed the Assessing Officer to re-calculate the amount in certain respects. 5. The Tribunal held that where there is a fair estimate of the income of the employee while deducting TDS, section 201 cannot be applied. Paragraphs 5.1 and 6 of the order reads as under :- “5.1 …...............................................In our view, as the amount involved here is considerably high, the payments made by the employees in their assessment should be looked into by the A.O. and if it is found that the employees have already paid taxes on these amounts, then the employer would not be asked for the payment again in parlance of sec. 201 of the Act. We, therefore, restore the entire matter to the file of the A.O. to give opportunity to the assessee to produce evidence that the employees have already paid taxes on those amounts. It is not possible for us to form a opinion only on the basis of the statement given in the chart. In our view, the details supplied by the assessee's counsel at the time of hearing are not sufficient to establish that all the payments were made for the business purposes and estimated expenses for the personal use had added to the salary for the purpose of T.D.S. 6. In the result, the appeal is allowed for statistical purposes.” SRP                                                                                                                                                           3/5 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:34

ITR230.97 6. Whichever way the matter is looked at, we do not consider it necessary to answer the Reference. The question that is referred is whether the Tribunal was right in fact and in law in holding that section 201(1) read with section 192 of the Act was not applicable “in the instant case”. The instant case, however, can be assessed only in the event of the Assessing Officer making the enquiries that he has been directed to make by the Tribunal. This would include looking into the question whether the employees had already paid the taxes on these amounts. If, for instance, it is found that the taxes were not paid, the further question as to whether the estimates were bona fide or not would arise. This in turn, would depend, inter-alia, upon the extent of the shortfall. 7. The matter is, at this stage, academic. We keep all the contentions, including of law, open. The question whether in view of this lapse of time, the matter ought to be proceeded or not any further is also kept open. We do not consider it necessary to decide this aspect of the matter raised by Mr. Shah in this Reference. SRP                                                                                                                                                           4/5 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:34

ITR230.97 8. In the circumstances, the Reference is returned unanswered. M.S. SANKLECHA, J. S.J. VAZIFDAR, J. SRP                                                                                                                                                           5/5 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:34 Powered by TCPDF (www.tcpdf.org)