2014 (9) TMI 1211 - HC - Income Tax

MAT Computation - provision towards unidentified motor third party claim - whether an ascertained liablity to be deducted while computing the book profit under section 115JB as held by tribunal ? - HELD THAT - Since we find that the learned advocate for the appellant/revenue has no instruction whether for the assessment years 1997-98,1998- 99,1999-2000 and 2001-2002 any appeal has been preferred on the same point and since it is well settled that it is not open to the revenue to challenge the correctness of the earlier assessment years without a just cause and as there is no substantial ground before us to differ from the position of law for the earlier assessment years in question, we are of the view that so far as the first question is concerned, it is not a substantial question of law. Disallowance u/s 14A - HELD THAT - since it is admitted by the learned advocate for the revenue that it stands covered by the order M/S. RR. SEN BROTHERS (P) LTD. 2013 (7) TMI 260 - CALCUTTA HIGH COURT against the revenue, the said question is answered in the negative and in favour of the assessee.

Summary

Issues:
1. Whether provision for unidentified motor third party claim is an ascertained liability to be deducted while computing the book profit under section 115JB of the Income Tax Act, 1961.
2. Whether deleting a sum made by the assessing officer under section 14A read with 8D of the Income Tax Rule 1962 is justified.

Issue 1: Provision for unidentified motor third party claim

The appellant/revenue filed an appeal under section 260A of the Income Tax Act against the order of the Income Tax Appellate Tribunal regarding the provision for an unidentified motor third party claim. The appellant argued that the issue was not challenged in previous assessment years and thus should be admitted. The respondent/assessee relied on various judgments to support their case, emphasizing the importance of consistency in tax assessments. The Court referred to precedents set by the Supreme Court and the Calcutta High Court, highlighting the significance of maintaining decisions across assessment years unless there is a material change in facts or law. The Court found that the issue was covered by previous decisions in favor of the assessee and dismissed the appeal, stating that there was no substantial ground to differ from the previous position of law.

Issue 2: Deletion of sum under section 14A read with 8D

The second issue involved the deletion of a sum made by the assessing officer under section 14A read with 8D of the Income Tax Rule 1962. The appellant conceded that this issue was covered by a previous order against the revenue. The Court, considering the previous decision, answered this question in the negative and in favor of the assessee. Consequently, the Court dismissed the application and appeal, directing the provision of an urgent certified copy of the order to the parties upon request.

In conclusion, the judgment by the Calcutta High Court addressed two main issues related to income tax assessments. The Court emphasized the importance of consistency in tax assessments based on previous decisions and legal principles established by higher courts. The judgment provided detailed analysis and referenced relevant legal precedents to support the decisions made on each issue, ultimately dismissing the appeal and application in favor of the assessee based on the application of established legal principles.