The Commissioner of Income Tax- V, vs. Dr. M.Venkataramana,

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON & THE HONOURABLE MR.JUSTICE N.ANIL KUMAR WEDNESDAY, THE 13TH DAY OF MARCH 2019 / 22ND PHALGUNA, 1940 ITA.No. 259 of 2010 AGAINST THE ORDER IN ITA 23/2004 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 18-08-2009 APPELLANT/RESPONDENT: THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADVS. SRI.JOSE JOSEPH, SC, FOR INCOME TAX SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT RESPONDENT/APPELLANT: M/S. APOLLO TYRES LTD KOCHI 6TH FLOOR, CHERUPUSHPAM BUILDINGS,, SHANMUGHAM ROAD, KOCHI-31. BY ADVS.SRI.JOSEPH MARKOS (SR.) SRI.V.ABRAHAM MARKOS SRI.ABRAHAM JOSEPH MARKOS SRI.GOVIND VIJAYAKUMARAN NAIR SRI.HARAN THOMAS GEORGE SRI.ISAAC THOMAS SRI.NOBY THOMAS CYRIAC THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 13.03.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA.259/10 2 JUDGMENT P.R. Ramachandra Menon, J. This appeal is at the instance of the Revenue. Challenge is against Annexure-C order passed by the Income Tax Appellate Tribunal, Cochin Bench. The assessment is in respect of the assessment year 1996-97. 2. The respondent Assessee Company is engaged in the manufacture and sale of automotive tyres, tubes, etc. Return was filed by the company on 28.11.1996, which was followed by a revised return. Finally, the assessment was completed in terms of Section 143(3) of the Income Tax Act by the Assessing Officer as per order dated 10.01.2002, assessing a total income of Rs.5,79,77,070/- and fixing the tax liability accordingly. This is sought to be challenged by the Assessee by filing appeal before the Commissioner of Income Tax. After considering the plus and minus points, the appeal was finalised, whereby some points were

ITA.259/10 3 answered in favour of the Assessee while some additions were made in favour of the Revenue. This was challenged by both the Assessee and the Revenue before the Income Tax Appellate Tribunal. After hearing the matter in detail, along with some other cases, a common verdict was passed on 18.08.2009, whereby the grievance projected by the Assessee was redressed under some of the relevant heads. The Assessee filed 'Annexure A' Miscellaneous Application stating that some mistakes have crept in the above order and hence it was sought to be considered/corrected. The Tribunal considered 'Annexure A' and passed 'Annexure B' order on 08.01.2010, granting relief to the Assessee, which is stated as detrimental to the interest of the Revenue and hence the challenge in the appeal filed by the Revenue. 3. Heard Mr.Joseph Markose, the learned Sr.Counsel for the assessee as well as Mr. Christopher Abraham, the learned Standing Counsel for the Department, at length.

ITA.259/10 4 4. This appeal preferred by the Revenue is still to be admitted, despite the pendency for more than nine years and no substantial question of law has been raised. The question raised by the appellant Revenue, suggesting involvement of some substantial questions of law, are in the following terms: 1. Whether on the facts and in the circumstances of the case- (a) the Club expenses being personal expenditure, the assessee is entitled to claim expenses under the Income Tax Act? (b) since the question being contested by the Revenue for the asst. years 1994-95 and 1995-96 and the same is pending consideration before this Hon'ble Court, the Tribunal is right in law (vide Sec.268A and 304 ITR 61) in declining to consider the question for the reason stated in the order? (c) Whether, on the facts and in the circumstances of the case and in the light of Sec.268A and 304 ITR 61 is not the Tribunal bound to consider the question regarding club expense on merits? 2. Whether, on the facts and in the circumstances of the case-

ITA.259/10 5 (i) is not disallowance of depreciation on the enhanced cost of equipment due to foreign exchange fluctuations in accordance with law? (ii) is not increase in the liability only notional and not real and hence the Tribunal is right in law in interfering with the disallowance of depreciation on account of variation in foreign exchange? 3. Whether, on the facts and in the circumstances of the case- a) The Tribunal is justified and right in law in interfering with the disallowance made by the Assessing Officer invoking section 14A of the Income Tax Act? b) Does not the issue involved in disallowance under Sec.14A and the view of the Tribunal amount to replacing the words “such expenditure” by “such investment”? c) Is not the order of the Tribunal on the issues involved vitiated and perverse in the light of the grounds urged in the case?

ITA.259/10 6 favour of the Asssessee as per the verdict passed by us in ITA No.1347/2009. Similarly, the second issue with regard to the 'Foreign exchange fluctuation' and the loss sustained in this regard is also covered by ITA No.1347/2009. The third issue with respect to Section 14A of the Act also stands covered by ITA No.973/2009. 6. In the above circumstance, all the three issues raised by the Revenue stand already answered by this Court and nothing remains to be considered as involving any substantial question of law envisaged under Section 260A of the I.T.Act. Appeal fails and it is dismissed accordingly. Sd/- P.R.RAMACHANDRA MENON JUDGE Sd/- N.ANIL KUMAR okb JUDGE //True copy// P.S. to Judge