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Income Tax v. Tube Investments - TC.A.1123 of 2007  RD-TN 2800 (27 August 2007)
In the High Court of Judicature at Madras
The Honourable Mr.Justice K.RAVIRAJA PANDIAN
The Honourable Mrs.Justice CHITRA VENKATARAMAN
Tax Case (Appeal) No.1123 of 2007
The Commissioner of Income Tax
Chennai. .. Appellant Vs
Tube Investments of India Ltd.,
28, Rajaji Salai
Chennai 1. .. Respondent TAX CASE (APPEAL) under Section 260A of the Income Tax Act against the order of the Income Tax Appellate Tribunal Madras 'B' Bench dated 21.7.29006 made in I.T.A.No.1904/Mds/2000 for the assessment year 1996-97. For Appellant : Mr.J.Narayanasamy
JUDGMENT OF THE COURT WAS DELIVERED BY K.RAVIRAJA PANDIAN,J
The appeal is filed by the Revenue against the order of the Income Tax Appellate Tribunal Madras 'B' Bench made in I.T.A.No.1904/Mds/2000 dated 21.7.2006. The relevant assessment year is 1996-97.
2. The respondent assessee is a public limited company engaged in the manufacture of bicycles, cycle accessories etc. For the assessment year 1996-97, the return filed by the respondent was processed under Section 143(1)(a) and the same was taken for scrutiny by issuing notice under Section 143(2) of the Income Tax Act. The assessment was completed inter alia after making an addition on account of contingent liability of excise duty on closing stock; disallowing deduction under Section 43B, in respect of payments of PF, EPF and ESI made belatedly as also made an addition on reduced depreciation on account of reduction made from opening written down value (w.d.v) on the block of assets by the amount of insurance claim received in respect of machinery and building. Aggrieved by the order of the assessing officer, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who allowed the appeal. The Revenue in turn took the matter on appeal before the Income Tax Appellate Tribunal. The Tribunal dismissed the revenue's appeal on all the issues. In the present appeal, the following substantial questions of law have been reframed by the Revenue by filing additional memorandum of grounds:- "1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the omission of the 2nd proviso to Section 43B is deemed to have retrospective effect ?
2. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the payments made to the Provident Fund, ESI, are allowable as deduction when the payments were made beyond the close of the financial year relevant to the assessment year ?
3. Learned counsel for the Revenue argued that though the first question of law has not arisen out of the order of the Commissioner of Income Tax Appeals, the Tribunal has rendered a finding and hence the first question of law could be disposed of by saying that the issue does not arise for consideration in this case. Hence the first question of law is not taken up for consideration as it does not arise in the facts of the case.
4. In respect of the second question of law, it is fairly admitted that the issue is covered against the Revenue by the decision in COMMISSIOENR OF INCOME TAX VS. SALEM CO-OPERATIVE SPINNING MILLS LTD., (284 ITR 621). In that case, the Division Bench of this Court following the decision of this Court in the case of CIT Vs. SHRI GANAPATHY MILLS CO. LTD., (2000 (243) ITR 879) has held that payments towards provident fund and Employees' State Insurance, if paid within the grace time allowed or prescribed under the relevant statute, those amounts were required to be deducted in the computation of taxable income of the assessee. In the present case it is admitted the statutory dues have been paid within the grace period prescribed for such payment. In view of the statutory provision and in the light of the above judgment, the authorities below have correctly considered the question in favour of the assessee. Hence, it requires no reconsideration. No substantial question of law arises for consideration of the Court. ` 5. For the foregoing reasons , the appeal is dismissed. Consequently, M.P.No.1 of 2007 is closed. (K.R.P.,J.) (C.V.,J.) 27.08.2007 Index:Yes/No
K.RAVIRAJA PANDIAN,J AND CHITRA VENKATARAMANJ krr To
1.The Assistant Registrar, Income-Tax Appellate Tribunal, III Floor, Rajaji Bhavan, Besant Nagar, Madras 90 (with records five copies). 2.The Secretary, Central Board of Revenue, New Delhi (3 copies). 3. The Joint Commissioner of Income Tax, Special Range I, Chennai.
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