DCIT, Bangalore V. M/s Karnataka Soaps & Detergents Ltd., Bangalore

ITA 1101/BANG/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5234 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-04-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 19-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KARNATAKA SOAPS
• Keywords: Retrospective amendment; Bad and doubtful debts; Tax effect; Set aside
• Section: 115JB

Judgement Text

PAGE 1 OF 3 ITA NO.1101/BANG/2009 & C.O.NO.11/BANG/2009 1 IN THE INOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE DR. O K NARAYANAN, VICE PRESIDENT AND SMT. P MADHAVI DEVI, J.M. ITA NO.1101/BANG/2009 (ASST. YEAR 2003-04) THE DEPUTY COMMISSIONER OF INCOME-TAX, LTU, BANGALORE-85. - APPELLANT VS KARNATAKA SOAPS & DETERGENTS LIMITED, BANGALORE PUNE HIGHWAY, BANGALORE. - RESPONDENT C.O.NO.11/BANG/2009 (ASST. YEAR 2003-04) (BY ASSESSEE) KARNATAKA SOAPS & DETERGENTS LIMITED, BANGALORE PUNE HIGHWAY, BANGALORE. -APPELLANT VS THE DEPUTY COMMISSIONER OF INCOME-TAX, LTU, BANGALORE-85. - RESPONDENT REVENUE BY : SMT. PREETI GARG ASSESSEE BY : SHRI S R R K SHARMA O R D E R PER P MADHAVI DEVI : THE REVENUE HAS FILED THIS APPEAL AGAINST THE OR DER OF THE CIT(A)-II DATED 23.3.2009. PAGE 2 OF 3 ITA NO.1101/BANG/2009 & C.O.NO.11/BANG/2009 2 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- I) THE DECISION OF THE CIT(A) IS THAT THE LEARNED CIT(A) HAS HELD THAT THE PROVISIONS FOR BAD AND DOUBTFUL DEBTS CANNOT BE ADDED BACK IN THE COMPUTATION OF INCOME U/S 115JB. AS THE DECISION OF THE CIT(A) WAS BASED ON THE JUDGEMENT OF THE APEX COURT IN THE CASE OF HCL COMNET SYSTEMS & SERVICES LTD. 305 ITR 409, THIS MATTER WAS NOT PURSUED BY THE DEPARTMENT BEFORE THE TRIBUNAL. SUBSEQUENTLY, FINANCE (NO.2) ACT, 2009 HAS AMENDED SECTION 115JB INSERTING CLAUSE (I), WHICH SAYS THAT THE AMOUNT SET ASIDE AS PROVISION FOR DOMINATION IN THE VALUE OF ANY ASSET SHALL BE ADDED TO THE BOOK PROFITS. THE AMENDMENT IS WITH RETROSPECTIVE EFFECT FROM 1.4.2001. IN VIEW OF THE SUBSEQUENT AMENDMENT, THE ORDER OF THE APEX COURT BECOMES INEFFECTIVE. CONSEQUENTLY, THE ORDER OF THE CIT(A) BECOMES UNACCEPTABLE. THEREFORE, THE CIT(A) ORDER CAN BE PURSUED BEFORE ITAT. II) TAX EFFECT ON THE ISSUE IS OF RS.64,17,812/-. 3. THE ASSESSEE ON THE OTHER HAND, IN THE CROSS OB JECTION, HAS STATED AS UNDER:- I) THE CIT(A) IN THE APPELLATE ORDER HAS ALLOWED THE RELIEF OF PROVISION FOR DEBTS SUOMOTO AS ENVISAGED IN THE JUDGEMENT OF THE APEX COURT IN THE CASE OF HCL COMENT SYSTEMS AND SERVICES LTD. (305 ITR 409). II) THIS RELIEF HAS NOT BEEN GIVEN EFFECT BY THE APPELLANT. THEREFORE, THE QUESTION OF TAX EFFECT ON THIS ISSUE OF RS.64,17,812/- WILL NOT ARISE. III) THE CROSS-OBJECTOR HAS ALREADY ADDED BACK THE PROVISION FOR BAD AND DOUBTFUL DEBT IN MAT CALCULATIONS U/S 115JB. THUS, THE QUESTION OF PAGE 3 OF 3 ITA NO.1101/BANG/2009 & C.O.NO.11/BANG/2009 3 FURTHER INTERFERING WITH THE MAT CALCULATION SUBMITTED IS NOT REQUIRED AND DUE TO THE FACT THAT THIS RELIEF HAS NOT BEEN GIVEN EFFECT TO BY THE APPELLANT. 4. AFTER GOING THROUGH THE GROUNDS OF APPEAL RAISE D BY THE REVENUE AND ALSO THE CROSS OBJECTIONS FILED BY THE ASSESSEE, IT IS FOUND THAT THE RELIEF GIVEN BY THE CIT(A) HAS NOT B EEN GIVEN EFFECT TO BY THE ASSESSEE AND THE ASSESSEE HAS ALREADY ADD ED BACK THE PROVISION FOR BAD AND DOUBTFUL DEBT IN MAT CALCULAT ION U/S 115JB. THEREFORE, THE GRIEVANCE OF THE REVENUE NEEDS NO AD JUDICATION. 5. IN THE RESULT, THE APPEAL OF THE REVENUE AS WEL L AS THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. THE ORDER PRONOUNCED ON 21ST .. DAY OF MAY, 2010 A T BANGALORE. SD/- SD/- (DR. O K NARAYANAN) (P MADHAVI DE VI) VICE PRESIDENT JUDICIAL MEMBER COPY TO : 1) THE ASSESSEE (2) THE REVENUE (3) TH E CIT(A) CONCERNED. (4) THE CIT CONCERNED. (5) THE DR (6) GUARD FILE. (7) GUARD FILE, NEW DELHI. MSP/20.5 BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.