PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL -1, KOLKATA vs. M/S BINANI INDUSTRIES LIMITED

OD – 3 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (INCOME TAX) ORIGINAL SIDE ITA/70/2018 PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-I, KOLKATA VS. M/S. BINANI INDUSTRIES LIMITED BEFORE : THE HON’BLE JUSTICE T.S. SIVAGNANAM And THE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA Date : 24th August, 2022 Appearance : Ms. Smita Das De, Adv. ….for appellant Mr. Madhur Agarwal Adv. Mr. Pranit Bag, Adv. Mr. A.K. Dey, Adv. …for respondent The Court : This appeal filed by the revenue under Section 260A of the Income Tax Act, 1961 (the Act, for brevity) is directed against the order dated March 02, 2016, passed by the Income Tax Appellate Tribunal, “A” Bench, Kolkata in I.T.A. No.144/Kol/2013 for the assessment year 2009-10. The appeal was admitted on the following substantial question of law :- “Whether the amount of Rs.12,65,75,000/-, received by the assessee on account of forfeiture of shares would be added to the book profits of the

2 assessee for the purpose of taxation under section 115JB of the Income Tax Act, 1961?” We have heard Ms. Smita Das De, learned standing Counsel appearing for the appellant/revenue and Mr. Madhur Agarwal, learned Counsel appearing for the respondent/assessee. In our considered view, we need not decide the substantial question of law as has been framed by this Court on account of certain facts. The Deputy Commissioner of Income Tax (Central)-XXVIII, Kolkata (DCIT) has passed an order on 24th December, 2012 under Section 251/143(3) of the Act by giving effect to the order dated 26th November, 2012 passed by the Commissioner of Income Tax (Appeals), Central-1, Kolkata in the assessee’s appeal for the assessment year under consideration, A.Y. 2009-10. The following computation of the book profit as per the directions of the CIT was made in his order dated 26th November, 2012 :- Net profit as per Profit & Loss account Rs. 33,90,47,340 Less : Relief allowed in appeal as per Para 12 Rs. 12,65,75,000 Revised net profit for the purpose of section 115JB Rs. 21,24,72,340 Less : Relief allowed as per Para 9 of the order Rs. 2,18,09,000 Rs. 19,06,63,340 Less : Dividend income Rs. 33,16,28,269 (-) Rs. 14,09,64,929 Add : Disallowance made by the assessee u/s. 14A Rs. 1,37,12,550 Book Profit (-) Rs. 12,72,52,379 Tax thereon NIL Less : TDS Rs.30,51,616/- Refundable Rs.30,51,616/-

3 From the above computation, it is seen that the book profit is a negative balance. Therefore, even assuming that we are to take it for consideration the question of law which has been admitted and assuming such question is decided in favour of the revenue, the result would be the case where the revenue will be neutral. Therefore, we are of the view that no useful purpose would be served by taking up the question for adjudication and all that we can observe to leave the substantial question of law upon considering the factual situation in the assessee’s case. For the above reason, the substantial question of law as framed is left open and the appeal is dismissed on the ground that the book profit as computed under Section 115JB is a negative balance. (T.S. SIVAGNANAM, J.)

(HIRANMAY BHATTACHARYYA, J.) SN/S. Chandra