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income-tax Officer Vs. Western India Bakers (P.) Ltd. - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Mumbai
Decided On
Judge
Reported in(1983)3ITD675(Mum.)
Appellantincome-tax Officer
RespondentWestern India Bakers (P.) Ltd.
Excerpt:
.....finance (no. 2) act, 1980 was under the consideration of supreme court and so the matter should be decided in accordance with the final decision of the supreme court. the commissioner (appeals) agreed with the contention of the assessee and set aside the decision of the ito on the point with a direction to compute the relief under section 80j in accordance with the final decision of the supreme court, which was expected very shortly.5. shri d.r. chawla, the learned representative for the department, urged that the commissioner (appeals) erred in his decision. according to him, the commissioner (appeals) should have decided the matter in accordance with the law as it exists today without waiting for decision of the supreme court to be delivered in future. shri subhash s. shetty, the.....
Judgment:
1. This appeal has been filed by the department against the order dated 17-2-1981 of the Commissioner (Appeals) relating to the assessment year 1978-79, the previous year of which ended on 31-3-1978.

2. The only ground taken in this appeal states that the Commissioner (Appeals) erred in setting aside the ITO's order granting relief under Section 80J of the Income-tax Act, 1961 ('the Act') and directing the ITO to recompute the relief in the light of the Supreme Court decision to be delivered in future.

3. The assessee is a private limited company. It was entitled to relief under Section 80J. It claimed to calculate such relief on the gross assets without deducting the liabilities as was held in the case of Century Enka Ltd. v. ITO [1977] 107 ITR 909 (Cal.). The ITO did not agree. He referred to the recent amendment of Section 80J with retrospective effect and calculated the relief on the net assets after deducting the liabilities to third parties. The ITO completed the assessment accordingly.

4. The assessee appealed to the Commissioner (Appeals) and contended that the validity of the retrospective operation of the recent amendment to Section 80J as per the Finance (No. 2) Act, 1980 was under the consideration of Supreme Court and so the matter should be decided in accordance with the final decision of the Supreme Court. The Commissioner (Appeals) agreed with the contention of the assessee and set aside the decision of the ITO on the point with a direction to compute the relief under Section 80J in accordance with the final decision of the Supreme Court, which was expected very shortly.

5. Shri D.R. Chawla, the learned representative for the department, urged that the Commissioner (Appeals) erred in his decision. According to him, the Commissioner (Appeals) should have decided the matter in accordance with the law as it exists today without waiting for decision of the Supreme Court to be delivered in future. Shri Subhash S. Shetty, the learned representative for the assessee, on the other hand, supported the order of the Commissioner (Appeals). He pointed out that the different Benches of the Tribunal have been taking the view similar to the one adopted by the Commissioner (Appeals) in this case.

6. We have considered the contentions of both the parties as well as the facts on record. It is true that the different Benches of the Tribunal have been taking the view similar to the one taken by the Commissioner (Appeals) in this case. As the validity of the retrospective amendment is under the consideration of the Supreme Court, it cannot be said that the said law has become settled as yet.

We, therefore, do not see anything improper or irregular in the order of the Commissioner'(Appeals). In the recent judgment dated 9-9-1981 in the case of Shoorji Vallabhdas (P.) Ltd. [IT Reference No. 67 of 1972], the Bombay High Court has repelled an argument raised by the revenue similar to the one now raised before us by the learned departmental representative. The Bombay High Court, in that case, has directed that the matter should be decided in accordance with the final decision of the Supreme Court. Respectfully following the aforesaid judgment of the Bombay High Court, we uphold the order of the Commissioner (Appeals).


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