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TAXAP/14520/2001 3/ 5 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 145 of 2001
For
Approval and Signature:
HONOURABLE
MR.JUSTICE K.A.PUJ Sd/-
HONOURABLE
MR.JUSTICE R.H.SHUKLA
Sd/-
====================================
1.
Whether
Reporters of Local Papers may be allowed to see the judgment ?
YES
2.
To
be referred to the Reporter or not ?
NO
3.
Whether
their Lordships wish to see the fair copy of the judgment ?
NO
4.
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
NO
5.
Whether
it is to be circulated to the civil judge ?
NO
====================================
DY.
C.I.T. (ASSTT.) - Appellant
Versus
MADHUSUDAN
INDUSTRIES LTD. - Opponent
====================================
Appearance
:
MR MAUNA M. BHATT for Appellant.
MR
RK PATEL for Opponent.
====================================
CORAM
:
HONOURABLE
MR.JUSTICE K.A.PUJ
and
HONOURABLE
MR.JUSTICE R.H.SHUKLA
Date
: 18/07/2008
ORAL JUDGMENT
(Per
: HONOURABLE MR.JUSTICE K.A.PUJ)
The
revenue has filed this Tax Appeal under Section 260-A of the Income
Tax Act, 1961 for assessement year 1989 90. The appeal was
admitted by this Court on 18.06.2001 and following substantial
question of law was formulated by the Court :-
Whether
the Appellate Tribunal is right in law and on facts in holding that
interest under Section 234B is not chargeable when income is computed
under Section 115J of the Act ?
Heard
Mrs. Mauna M. Bhatt, learned Standing Counsel appearing for the
revenue and Mr. R. K. Patel, learned advocate appearing for the
assessee.
Though
the Court has directed this tax appeal to be heard along with Tax
Appeal No. 390 of 1999, since there are several other issues
involved in the said tax appeal, we are taking up this tax appeal
for final hearing separately.
While
allowing this issue in favour of the assessee, the Tribunal has
followed the decision of the Karnataka High Court in the case of
Kwality Biscuits Limited V/s. Commissioner of Income-Tax, 243 ITR
519. An appeal filed against this judgment by the revenue before
the Apex Court has been dismissed and the said decision is reported
in (2006) 284 IRT 434. It is reported therein that from the
decision of the Karnataka High Court to the effect, inter alia,
that interest is not leviable under Sections 234B and 234C of the
Income-tax Act, 1961, in the case of an assessment of a Company on
the basis of book profits under Section 115J, since the entire
exercise of computing income under Section 115J can only be done at
the end of the financial year, and the provisions of Sections 207,
208, 209 and 210 cannot be made applicable until and unless the
accounts are audited and the balance-sheet prepared. The department
preferred appeals to the Hon’ble Supreme Court and the Hon’ble
Supreme Court dismissed the appeals.
Since
the Tribunal has followed the judgment of the Karnataka High Court
and the said decision has been approved by the Hon’ble Supreme
Court, we decide this question in favour of the assessee and against
the revenue. We are of the view that the Tribunal has correctly
decided the issue and held that interest under Section 234B is not
chargeable when income is computed under Section 115J of the Act.
This
appeal is accordingly dismissed.
After
the above order is dictated, Sheristedar has pointed out that in
this matter, appearance of one of us (Coram :- K. A. Puj, J.) was
filed way back on 21.07.2001. Thereafter, appearance of Mr. R. K.
Patel is filed. This Bench was not inclined to take up the matter.
However, the learned advocate appearing for the assessee as well as
learned Standing Counsel appearing for the revenue submits that
since this bench is not deciding any fresh issue and only the
judgment of the Hon’ble Supreme Court is followed in the matter,
there would not be objection for taking up this matter by this
Bench. Accordingly, this Bench has thought it fit not to change the
decision taken by the Court.
Sd/- Sd/-
[K. A. PUJ, J.] [R.H.
SHUKLA, J.]
Savariya
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