Dismissed

The Commissioner of Income Tax - 8, v. M/S. Kec Holdings Ltd.,(Erstwhile Bespoke Finvest Ltd. at Present Known as Instant Holding Ltd.)

Bombay HC28 Nov 2014ITXA/1441/2012

Case brief

AI extract

What is this about?

The High Court held that the appeal did not raise any substantial question of law. The Bench convicted the questions as either fact-driven or covered by previous adjudications. The Tribunal’s order was not perverse, and the Revenue failed to demonstrate any error of law.

What did the court decide?

The appeal is dismissed. No costs.

The Commissioner of Income Tax - 8, Vs M/S. Kec Holdings… — Income Tax | Bombay HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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INCOME TAX APPEAL NO.1441 OF 2012

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The Commissioner of Income Tax 8 ... Appellant.

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V/s.

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M/s. KEC Holdings Ltd. ... Respondent.

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Mr. Arvind Pinto for the Appellant. Mr. Nitesh Joshi i/b Mr. Atul K. Jasani for the Respondent.

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CORAM: S.C. DHARMADHIKARI AND A.A. SAYED, JJ. DATED : 28 NOVEMBER, 2014.

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P.C. :

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1 This Appeal challenges the order passed by the Income Tax Appellate Tribunal dated 3^rd April, 2012 deleting certain additions.

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2 It is submitted that there are five substantial questions of law and they are to be found at pages 8 to 10 of the paper book.

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3 In relation to first two questions (a) and (b) it is fairly conceded that in the case of this very Assessee an Appeal was filed by the Revenue being Income Tax Appeal No.221 of 2012. That was for the Assessment Year 2003-04. The same was dismissed by this Court on

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11^th June, 2014. The two questions therefore, cannot be termed as substantial questions of law. The Appeal is dismissed.

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4 However, Mr. Pinto submits that questions (c), (d) and (e) are substantial questions of law though they may not be happily worded.

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5 In relation to question (c) that pertains to deletion of an addition of Rs.58.75 lakhs included in the total addition of Rs.104.97 lakhs.

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6 In regard to that we find that the Tribunal has examined these questions as ground nos.2 and 3 and which are part of the Assessee’s Income Tax Appeal No.3735/Mum/2009 for Assessment Year 20042005. The Assessee was aggrieved by the order of the Commissioner Income Tax (Appeals) – VIII, Mumbai dated 4^th March, 2009.

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7 The Tribunal’s attention was invited by the advocate appearing for the Assessee to the order passed in Income Tax Appeal No.3734/MUM/2009 for Assessment Year 2003-2004. The Mumbai Bench delivered this order and the Tribunal passed the same in the case of this very Assessee and for Assessment Year under question, the Tribunal followed it and applied it because it found that ground no.2 of the present Appeal is similar to ground no.4 of Income Tax Appeal

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No.3734/MUM//2009 for Assessment Year 2003-2004 though there is a difference in quantum. Ground no.3 of the Appeal Memo in Income Tax Appeal No.3735/Mum/2009 is identical to ground no.5 of Income Tax Appeal No.3734/MUM/2009 for prior Assessment Year. Thus, the Tribunal was of the opinion that its factual findings in relation to the same Assessee and for prior Assessment Year, raising identical questions and issues would bind it. It was of the opinion that rule of consistency required it to maintain and follow its earlier order. We find that the Assessing Officer and the Commissioner of the Income Tax both ignored the Tribunal’s orders in the case of this Assessee. May be it was not delivered or it was not available when they dealt with the proceedings. However, in such cases and if the issues are being raised from year to year but are identical on facts, then, the Officers ought to show some restraint and await the adjudication by the Tribunal. The attempt to hastily conclude the proceedings before it and by not making an appropriate endorsement so as to reserve the right to exercise the power at a later stage results in the Tribunal’s time being taken and essentially wasted. From paras 9 to 11 of the order of the Tribunal it has done nothing except applying its earlier view. The facts are also identical. Thus barring the difference in the ground number and the quantum everything was common and identical.

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8 The narration of facts in the Income Tax Commissioner’s and Assessing Officer’s would indicate that their conclusions are based on the understanding of the market by them and particularly by their perception of working of a Finance Company and Banking Companies. We do not see how such an exercise could have been undertaken unless they were of the firm belief that Assessee is attempting to contravene any mandatory provision of the Income Tax Act, 1961 or in the Rules. In the above circumstances, questions (c ) and (d) are not substantial questions of law.

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9 In relation to question (e) at page 10, we find that the Tribunal has set out the facts, the submissions and concluded that the entire aspect has not been verified by the Assessing Officer. The Tribunal, therefore, remitted the matter back to the Assessing Officer to consider and verify the year in which provisions, noted by it in paras 19 to 21, have been made and whether the same were added to the profit in the year of their creation. In such circumstances, the caution by the Tribunal to the Assessing Officer and to be exercised during the course of verification and scrutiny as is found in paras 23 and 24 does not raise any substantial question of law.

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10 More so, when Mr. Joshi appearing for the Assessee fairly states that the Tribunal was not required to observe anything of the nature to be found in para 30 of the order under challenge. In such circumstances, we clarify that while verifying and scrutinizing the claim in terms of the Tribunal’s directions, the Assessing Officer shall not be bound by the Tribunal’s observations in para 30 of the impugned order.

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11 With the above conclusion and clarification, we do not find that this Appeal deserves to be entertained. It does not raise any substantial question of law. It is nothing but a factual assertion of the Assessee which has been accepted and in the light of the materials produced. If the Tribunal was of the opinion that the facts and circumstances peculiar to the Assessee permit it to take a particular legal course, then, we do not find that the Tribunal’s conclusions can be assailed as perverse or vitiated by any error of law apparent on the face of the record. Consequently, the Appeal fails, it is dismissed. No costs.

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(A.A. SAYED, J.) (S.C. DHARMADHIKARI, J.)

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katkam

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The Commissioner of Income Tax - 8, v. M/S. Kec Holdings Ltd.,(Erstwhile Bespoke Finvest Ltd. at Present Known as Instant Holding Ltd.)

Case brief

What is this about?

What did the court decide?

The Commissioner of Income Tax - 8, v. M/S. Kec Holdings Ltd.,(Erstwhile Bespoke Finvest Ltd. at Present Known as Instant Holding Ltd.)

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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