THE COMMISSIONER OF INCOME TAX vs. M/S ICDS LIMITED

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ITA/581/2007HC KarnatakaKAHC01040593200717 December 2013Bench: N.KUMAR,RATHNAKALA4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, following a previous judgment of its own and a Supreme Court decision, set aside the Tribunal's order. The matter was remanded back to the assessing authority for fresh consideration.

What were the facts?

The Revenue appealed against the Tribunal's order concerning the assessment year 1999-2000. The core issue was whether a provision for non-performing assets could be added to the book profits for computing income under Section 115JA.

What were the issues?

Whether a provision for non-performing assets is to be added to book profits under Section 115JA, and whether it's a provision for an asset or a liability.

Which sections of the Income-tax Act were involved?

Section 115JA

AI-generated summary — verify with the full judgment below

- 1 - IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 17TH DAY OF DECEMBER 2013 P R E S E N T THE HON’BLE MR. JUSTICE N. KUMAR A N D THE HON’BLE MRS. JUSTICE RATHNAKALA INCOME TAX APPEAL NO.581 OF 2007

BETWEEN:

1.

THE COMMISSIONER OF INCOME-TAX, C.R. BUILDING, ATTAVARA, MANGALORE.

2.

THE JOINT COMMISSIONER OF INCOME-TAX, ASSESSMENT, SPECIAL RANGE, C.R. BUILDING, ATTAVARA, MANGALORE.

...APPELLANTS

(BY SRI. E. SANMATHI INDRAKUMAR, ADV.)

AND:

M/S. ICDS LIMITED, SYNDICATE HOUSE, MANIPAL – 576 119.

...RESPONDENT

(BY SRI S. PARTHASARATHI, ADV.)

THIS ITA IS FILED UNDER SEC.260-A OF I.T. ACT, 1961 ARISING OUT OF ORDER DATED 19-02- 2007 PASSED IN ITA NO.1448/BANG/2004 FOR THE

- 2 - ASSESSMENT YEAR 1999-00, PRAYING THAT THIS HON'BLE COURT MAY BE PLEASED TO:

I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN,

II. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BANGALORE BENCH-A IN ITA NO.1448/BANG/2004 DATED 19-02-2007 & CONFIRM THE ORDER PASSED BY THE JOINT COMMISSIONER OF INCOME TAX, SPECIAL RANGE, MANGALORE, IN THE INTEREST OF JUSTICE AND EQUITY.

THIS APPEAL IS COMING ON FOR HEARING THIS DAY, N. KUMAR, J., DELIVERED THE FOLLOWING: -

JUDGMENT

This appeal is preferred by the revenue challenging the order passed by the Tribunal pertaining to the assessment year 1999 – 2000.

2.

The substantial questions of law which arise for consideration in this appeal are as under:

1.

Whether the Appellate Tribunal is correct in holding that provision for non- performing assets of Rs.5,88,29,114/- made by the assessee cannot be added to the book profits of the company as per the explanation

(c) to Section 115JA(2) of the Act for purposes of computing income under Section 115JA of the Act?

- 3 - 2. Whether non-performing asset is a provision made towards asset or can it be considered as provision made for meeting the liability more particularly when nomenclature itself suggests it as an asset?

3.

The tribunal following the earlier judgment of the tribunal in ITA No.703/Bang/2000 for the assessment year 1997 – 98 allowed the assessee’s claim and dismissed the appeal preferred by the revenue. It is against the said order, this appeal is filed.

4.

The order passed by the tribunal in ITA No.703/Bang/2000, was the subject matter of the appeal in ITA No.343/2001. This Court by order dated 31.10.2007, following the judgment of the Apex Court in the case of APPOLLO TYRES LTD., VS. COMMISSIONER OF INCOME TAX REPORTED IN 255 ITR PAGE 273, has set aside the said order and remanded the matter back to the assessing authority for fresh consideration. For the reasons set out in the said order, the impugned order also requires to be set aside

- 4 - for the same reasons. The matter is remanded back for fresh consideration in accordance with law.

5.

In the light of the aforesaid judgment as well as the judgment of the Apex Court the following order is passed: ORDER a. The appeal is allowed. b. The impugned order is set aside. c. The entire matter is remanded back to the assessing authority for fresh consideration in accordance with law.

In that view of the matter, we have declined to answer the substantial questions of law.

Sd/- JUDGE

Sd/- JUDGE

nvj

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