THE COMMISSIONER OF INCOME TAX vs M/S UNITED BREWEIES LTD

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 5th DAY OF JUNE, 2015

PRESENT

THE HON’BLE MR.JUSTICE MOHAN M. SHANTANAGOUDAR

AND

THE HON’BLE MR.JUSTICE ARAVIND KUMAR

I.T.A. NO.476/2009

BETWEEN :

The Commissioner of Income-Tax C.R. Building Queens Road Bangalore

The Dy. Commissioner of Income-Tax Central Circle-2(3) C.R. Building Queens Road Bangalore

..Appellants (By Sri K.V. Aravind, Adv.,)

AND :

M/s. United Breweries Ltd., UB Towers, Level-4, UB City 24, Vittal Malya Road Bangalore

..Respondent (By Sri S. Parthasarathi, Adv.,)

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This appeal is filed under Section 260-A of Income Tax Act, 1961 arising out of order dated 01.04.2009 passed in ITA No.705/Bang/2008 for the assessment year 2004-05, praying to formulate the substantial questions of law stated therein, allow the appeal and set aside the order passed by the Income-Tax Appellant Tribunal, Bangalore.

This appeal coming on for hearing, this day, MOHAN M. SHANTANAGOUDAR, J., delivered the following:-

J U D G M E N T

Revenue has preferred this appeal against the order dated 1.4.2009 passed in ITA.No.705/Bang/2008 in respect of the assessment year 2004-05.

While admitting the appeal the following questions of law were framed on 6.10.2009:-

i) Whether the provision for idle assets of Rs.33,54,367/- was correctly added back by the Assessing Officer when computing profits under Section

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115JB of the Act Income Tax Act, 1961 (‘Act’ for short) as was done by the assessee when computing the regular profits under the Act?

ii) Whether the provisions for doubtful debts of Rs.51,93,861/- and provision for doubtful advances of Rs.35,52,387/- was correctly added back by the Assessing Officer when computing profits under Section 115JB of the Act as was done by the assessee when computing the regular profits under the Act?

iii) Whether the amendment by Finance Act of 2009 with retrospective effect from 1.4.2001 by insertion of Explanation to Clause (g) to sub- Section (2) of Section 115JB of the Act, the judgment of the Apex Court in CIT Vs. HCL Comment Systems - 305 ITR 409, would not be applicable to the current assessment year 2004- 05 and the additions made by the

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Assessing Officer in computing profits under Section 115JB of the Act would be correct?

Learned counsel appearing on behalf of the Revenue submitted that Section 115JA of the Act, has been amended vide Finance Act, 2009 w.e.f. 1.4.1998 and the amendment may have some bearing on the decision of the issues framed in this appeal. In view of the retrospective amendment to Section 115JA of the Act, the Tribunal has to reconsider the matter afresh.

Learned counsel appearing for the respondent- assessee does not dispute the statement made by the learned counsel for the Revenue and he also agreed for remanding the matter to the Tribunal for decision on the issue referred to above, in the light of retrospective amendment to Section 115JA of the Act.

In the circumstances, we pass the following order:-

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The order dated 1.4.2009 passed in ITA.No.705/Bang/2008 in respect of the assessment year 2004-05 is set aside. The matter is remitted to the Tribunal. The Tribunal shall consider the matter afresh and pass order on merits in accordance with law, as expeditiously as possible and preferably within a period of six months from the date of receipt of a copy of this order. All contentions of the parties are kept open.

Appeal is disposed of accordingly.

Sd/- JUDGE

*ck/-

THE COMMISSIONER OF INCOME TAX vs. M/S UNITED BREWEIES LTD