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

ITA/582/2007

AI Insights

The case involves an appeal by the Commissioner of Income-Tax and the Joint Commissioner of Income-Tax against M/s. ICDS Limited, challenging the order of the Income Tax Appellate Tribunal (ITAT) which had allowed the assessee's claim regarding the non-addition of a lease equivalisation fund of Rs.11,09,04,763 to the book profits of the company for the assessment year 1999-2000. The Tribunal's decision was based on a precedent from an earlier case (ITA No.703/Bang/2000). However, this earlier decision was set aside and remanded by the High Court following the Supreme Court's judgment in the case of Apollo Tyres Ltd. vs. Commissioner of Income Tax. Consequently, the High Court in this appeal also set aside the ITAT's order and remanded the matter back for fresh consideration, citing the need to align with the Supreme Court's directives.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 700963 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 17-12-2013
• Assessment Year: misc
• Other Referred Cases: Appollo Tyres Ltd. vs. Commissioner of Income Tax
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: S
• Assessee Lawyers: E INDRAKUMAR
• Keywords: Assessment year 1999-2000; Book Profits; Income tax appeal; Lease Equivalisation Fund
• Section: 260-A; 115JA(2)

Judgement Text

" - 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.582 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/BNG/2004 FOR THE - 2 - ASSESSMENT YEAR 1999-2000, 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 of lease equivalisation of fund of Rs.11,09,04,763/- made by the assessee cannot be added to the book profits of the company as per the explanation to Section 115JA(2) of the Act for purposes of computing income under Section 115JA of the Act? - 3 - 2. whether the Tribunal is correct in not considering the explanation provided to clause (c) of the explanation to Section 115JA(2)? 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 for the same reasons. The matter is remanded back for fresh consideration in accordance with law. - 4 - 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 "