JAY BHARAT MARUTI LTD V. DY CIT CIRLCE 4

W.P.(C)/1274/2011

AI Insights

The case involves Jay Bharat Maruti Limited, the petitioner, contesting an order by the Deputy Commissioner of Income Tax, Circle-4(1), regarding the assessment of excise duty under Section 43B of the Income Tax Act, 1961, for the assessment year 1995-96. The core issue was whether an amount of Rs.51,06,391, paid as excise duty, was correctly loaded on the closing stock and should not be deducted from the opening stock of the succeeding year to avoid double deduction. The Income Tax Appellate Tribunal had earlier remanded the issue to the Assessing Officer for verification. The High Court found that the Assessing Officer did not adequately address the petitioner's submissions and thus remanded the matter for a reasoned decision.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 746208 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 08-03-2011
• Assessment Year: misc
• Other Referred Cases: M/s Jay Bharat Maruti Limited vs. Commissioner of Income Tax, Berger Points India Ltd. vs. Commissioner of Income-tax, Calcutta
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: KAMAL SAWHNEY; AMI T SHRIVASTAVA
• Assessee Lawyers: R SANTHAN AM; A P SINGH
• Keywords: Assessment Year 1995-96; Double Deduction; Excise Duty; Income tax appellate tribunal
• Section: 143(2); 43B

Judgement Text

" WPC 1274/2011 Page 1 of 5 * IN THE HIGH COURT OF DELHI AT NEW DELHI + Writ Petition (C) No. 1274/2011 Jay Bharat Maruti Limited ....Petitioner Through Mr. R. Santhanam and Mr. A.P.Singh, Advocates. VERSUS Dy CIT, Circle-4(1) …..Respondent Through Mr. Kamal Sawhney, Sr. Standing Counsel & Mr.Amit Shrivastava, Adv. CORAM: HON’BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE SANJIV KHANNA ORDER % 08.03.2011 We have heard Mr. R. Santhanam and Mr. Kamal Sawhney, counsel for the petitioner and the respondent. 2. Having gone through the records, we find that a limited issue arises for consideration and the writ petition can be disposed of at this stage itself. This will curtail delay and expedite the proceedings. 3. By judgment dated 17th February, 2010, this Court in ITR No. 628/2009, M/s Jay Bharat Maruti Limited vs. Commissioner of Income Tax, upheld the order of the Income Tax Appellate Tribunal (Tribunal, for short) remanding the issue under Section 43B of Income Tax Act, WPC 1274/2011 Page 2 of 5 1961 (Act, for short) relating to the assessment year 1995-96, to the Assessing Officer. The Tribunal had held that in view of the order of the Hon’ble Supreme Court in Berger Points India Ltd. vs. Commissioner of Income-tax, Calcutta: 266 ITR 99, the contention of the petitioner regarding payment of Rs.51,06,391/- on account of excise duty paid was correct. However, the matter was remanded to the Assessing Officer to examine whether this amount of Rs.51,06,391/- was also loaded on the closing stock of the year in question, the opening stock of the succeeding year and therefore, has to be reduced so as to avoid double deduction. In the judgment dated 17th January, 2010, the High Court had observed as under:- “Now, before us, the learned counsel for the appellant/assessee submits that the finding of the Tribunal that the sum of Rs.51,06,391/- had been loaded on the closing stock is factually incorrect and, therefore, there was no need for deducting the said sum from the opening stock of the succeeding year. We feel that this aspect of the matter can be adequately addressed by directing the Assessing Officer to verify as to whether the said amount of excise duty paid during the year had been loaded on the closing stock or not. In case it was loaded, then the observations of the Tribunal would stand. However, if it was not so WPC 1274/2011 Page 3 of 5 loaded, then there would be no need for reducing the said amount from the opening stock of the succeeding year.” 4. Accordingly, the matter was taken up by the Assessing Officer after issue of notice to the assessee. The Assessing Officer has passed an order dated 27th December, 2010, in which he has held as under:- “03. Notice under Section 143(2) dated 25.10.2010 was issued to the assessee. The assessee company vide its submission dated 13.12.2010 submitted that the amount of Rs.51,06,391/- was loaded in the closing balance of stock. Thus, respectfully following the direction of Hon’ble ITAT as well as the Hon’ble High Court, no addition on this account is made in the current year. However, as per the direction of the Hon’ble High Court as well as the Hon’ble ITAT the same amount will be disallowed in the succeeding assessment year i.e. A.Y. 1996-97.” 5. This order dated 27th December, 2010, is impugned before us. Learned counsel for the petitioner has rightly submitted that the Assessing Officer has not dealt with the issue and contention as raised by the petitioner in their letter dated 13th December, 2010, the relevant portion of which reads as under:- WPC 1274/2011 Page 4 of 5 “Further during the A.Y. 1996-97 the closing balance of excise duty paid was Rs.68,31,211/- out of which after adjusting the opening balance of Rs.51,06,391/- the balance of Rs.17,24,820/- as a closing balance has been claimed u/s 43B and the same was allowed under the CIT (A) (copy of the order is enclosed). As the closing balance of A.Y. 1995-96 of Rs.51,06,391/- is already adjusted in the subsequent year (A.Y. 1996-97) there is no need for reducing the said amount from the opening balance of the succeeding year.” 6. The said contention is relevant and has to be dealt with by the Assessing Officer. It is not necessary for the Assessing Officer to accept the said contentions, but he must give reasons for the same. Accordingly, we quash the order dated 27th December, 2010 and remand the matter to the Assessing Officer to examine the contention of the petitioner in their letter dated 13th December, 2010 by a speaking and reasoned order. 7. As noted above, the matter pertains to the order for Assessment year 1995-96 and in the first round also the matter travelled to the High Court. We have interfered to cut delay and expedite the matter. We also find that principles of natural justice have not been observed as the WPC 1274/2011 Page 5 of 5 contention has not been examined and no reasons have been given. The petitioner will appear before the Assessing Officer on 28th March, 2011 at 2.30 PM when a date for hearing will be fixed. Thereafter the matter will be decided by the Assessing Officer as expeditiously as possible and preferably within one month thereafter. 8. The writ petition is accordingly disposed of without any orders as to costs. Dasti. SANJIV KHANNA, J. CHIEF JUSTICE March 8, 2011 kkb "