CIVIL APPEAL 6262 of 2010 on 25 September 1987

1. Not on board. Taken up by consent of the parties.

2. The appeal is admitted on the following substantial questions of law.

“(A)Whether, on the facts and in the circumstances of the case and in law, the ITAT is right in deleting the disallowance made by A.O. u/s. 43B of sales tax (Rs.48,638) and deferred sales tax payable (Rs.18,36,350/-) on the strength of Circular dated 25/09/1987 which was issued after the end of the assessment year and in which no retrospective effect is expressly given?

(B) Whether on the facts and in the circumstances of the case and in law, the ITAT is right in allowing the terminal u/s. 32(1)(iii) of Rs.22,506/-?

(C) Whether, on the facts and in the circumstances of the case and in law, the ITAT is right in allowing the depreciation on jeep at 30% even though the jeep does not fall within the ambit of heavy vehicles?

(D)Whether, on the facts and in the circumstances of the case and in law, the ITAT is right in allowing the bad debt despite there being no evidence to establish that the debts had become bad?

(E)Whether, on the facts and in the circumstances of the case and in law, the ITAT is right in deleting the disallowance made u/s. 40A(5)?

(F)Whether, on the facts and in the circumstance of the case and in law, the ITAT is right in allowing the commission of Rs.15,64,000/- paid to Giian Rangwala ?”

3. The assessment year involved herein is A.Y. 1986-87.

4. As regards question (A) is concerned, the Counsel for the Revenue states that in view of Circular No.496 dated 25.9.1987 which is followed by the Gujarat High Court in the case of CIT vs. Bhagwati Autocast Ltd., reported in 261 ITR 481, the decision of the ITAT cannot be faulted. Accordingly, question (A) cannot be entertained.

5. As regards question (B) is concerned, the Tribunal has allowed the claim of the assessee by following its decision in the case of assessee for A.Y. 1984-85. Admittedly, the appeal filed by the Revenue against the order of the ITAT for A.Y. 1984-85 has been dismissed for want of non-removal of office objections. No steps have been taken to restore the Appeal – as a result whereof the order of the ITAT for A.Y. 1984-85 has attained finality. No case is made out to find fault with the decision of the ITAT for A.Y. 1984-85. In this view of the matter, question (B) raised by the Revenue cannot be entertained.

6. As regards question (C) is concerned, the ITAT has allowed the claim of the assessee by relying on the case of assessee for A.Y. 1985-86. Admittedly the decision of the ITAT for the A.Y. 1985-86 has been accepted by the Revenue. No case is made out for taking a contrary view. In this view of the matter, question (C) cannot be entertained.

7. As regards question (D) is concerned, the Counsel for the Revenue states that the said question is answered against the Revenue by the decision of this Court in the case of DIT vs. Oman International Bank Ltd., reported in 313 ITR 128. In this view of the matter, question (D) filed by the Revenue cannot be entertained.

8. As regards question (E) is concerned, Counsel for the Revenue states that the issue is covered against the Revenue by the decision of this Court in the case of Otis India Ltd., vs. CIT reported in 195 ITR 682. In this view of the matter, question (E) filed by the Revenue cannot be entertained.

Conclusion

9. As regards question (F) is concerned, the ITAT has allowed the provision for commission amounting to Rs.15,64,000/- by recording a finding that the provision made in A.Y. 1987-88 has been offered to tax. In this view of the matter, question (F) filed by the Revenue cannot be entertained.

10. In the result, the appeal is disposed of accordingly with no order as to costs.

(A. R. JOSHI, J.)

(J. P. DEVADHAR,J.)