CIT ROHTAK vs. M/S G.K.MEDICINE CENTRE JAGADH
What did the High Court hold?
The High Court held that the question referred to it was covered by its own previous decisions in the assessee's own case for earlier assessment years. The Court had previously allowed the claim for leave with wages, relying on the Supreme Court's decision in Bharat Earth Movers V. Commissioner of Income-tax, (2000) 245 ITR 428, and its own subsequent decision in Commissioner of Income-tax V. Oswal Woollen Mills Ltd., (2002) 254 ITR 666. Since the revenue's counsel could not present any contrary arguments or distinguish the present case from the earlier ones, the Court answered the question in favour of the assessee and against the revenue. The reference was disposed of accordingly.
What were the facts?
The Commissioner of Income Tax (Central), Ludhiana (Revenue) has filed an Income Tax Reference (ITR) No. 11 of 1996 before the High Court of Punjab and Haryana at Chandigarh. The reference arises from an order dated 22.11.1995 passed by the Income Tax Appellate Tribunal, Chandigarh Bench, in I.T.A. No. 1149/Chandi/90. The assessment year in question is 1987-88. The dispute concerns the allowability of the assessee's (M/s Oswal Woollen Mills Ltd., Ludhiana) claim for leave with wages.
What were the issues?
1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing the assessee's claim for leave with wages, ignoring the fact that this was not an ascertained liability but a contingent liability and hence not allowable under the law? (Question of law) Assessee's Contention: The assessee's counsel pointed out that this identical issue for assessment years 1983-84, 1984-85, and 1986-87 has been decided by this Court in their favour. The Court had relied on the Supreme Court judgment in Bharat Earth Movers V. Commissioner of Income-tax, (2000) 245 ITR 428, which was also followed in the assessee's own case in Commissioner of Income-tax V. Oswal Woollen Mills Ltd., (2002) 254 ITR 666. Revenue's Contention: The learned counsel for the revenue was not able to dispute the statement made by the assessee's counsel regarding the earlier decisions.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh Bench Chandigarh arising out of its order dated 22.11.1995 passed in I.T.A.No.1149/Chandi/90, in respect of the assessment year 1987-88:- “Whether, on the facts and in the circumstance of the case, the Appellate Tribunal was right in law in allowing the assessee's claim for leave with wages, ignoring the fact that this was not an ascertained liability but a contingent liability and hence not allowable under the law?” Learned counsel for the assessee points out that in case of the assessee for the assessment years 1983-84, 1984-85 and 1986- 87, the same question has been decided by this Court vide orders dated 26.4.2006 in ITR Nos.192 to 194 of 1995 and ITR No.409 of 1995. In ITR Nos.192 to 194 of 1995 (Commissioner of Income-tax (Central) Ludhiana Vs. M/S Oswal Woollen Mills Ltd., G.T.Road, Sherpur, Ludhiana) dealing with the question, this Court
I.T.R No.11
of 1996
-2- *** observed:- “Learned counsel for the assessee points out that first question in respect of assessment year 1983-84 (ITA No.1226/Chandi/87) as well as in respect of assessment year 1984-85 (ITA No.133/Chandi/88) stands covered by judgment of Hon'ble the Supreme Court in Bharat Earth Movers V. Commissioner of Income-tax, (2000) 245 ITR 428, which was followed even in assessee's own case in Commissioner of Income-tax V. Oswal Woollen Mills Ltd., (2002) 254 ITR 666. No contrary view has been shown on behalf of the Revenue. Accordingly, following the said judgment, we answer this question in favour of the assessee and against the revenue.” Learned counsel for the revenue has not been able to dispute the above statement. Accordingly, following orders of this Court in case of the assessee for the earlier years, the question referred is answered against the revenue and in favour of the asseseee. The reference is disposed of. (Adarsh Kumar Goel) Judge November 22,2006 (Rajesh Bindal) Pka Judge
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