2012 (11) TMI 676 - HC - Income Tax

MAT - Whether the Tribunal was justified to hold that provision for wages of Rs. 48, 19, 00, 000/- should be set off against the income for assessment year 1989-90 for computation of taxable income for the assessment year 1990-91 for the purpose of section 115 J of the Income Tax Act? - held that - revenue could not satisfy that because of this decision of I.T.A.T. there will be any variation in the tax effect. - Therefore there is no need to answer this question and the appeal is liable to be dismissed because it is not affecting the revenue in any manner. - Decided against the revenue.

Summary

Issues:
1. Treatment of guest house expenditure as revenue expenditure under Section 37(4) of the Income Tax Act, 1961 for the assessment year 1990-91.
2. Relief granted to the assessee in respect of claim of guest house expenses for the assessment year 1990-91.
3. Set off provision for wages against income for assessment year 1989-90 for computation of taxable income for the assessment year 1990-91 under section 115 J of the Income Tax Act.
4. Allowance of relief to the assessee on the issue of depreciation on sale of assets/surveyed off assets for the assessment year 1990-91 under sections 43(6) and 50 of the Income Tax Act.

Analysis:

1. The appellant raised questions regarding the treatment of guest house expenditure as revenue expenditure under Section 37(4) of the Income Tax Act for the assessment year 1990-91. The Tribunal had previously addressed similar issues in a different case, and based on that decision, the questions raised by the appellant were considered already answered. Therefore, the appeal was decided in line with the previous decision.

2. The issue of granting relief to the assessee in relation to the claim of guest house expenses for the assessment year 1990-91 was also raised. However, it was noted that this issue had already been addressed in a prior case involving the same parties. As the matter had been previously settled, there was no need to revisit this question, and the appeal was decided accordingly.

3. The question concerning the provision for wages and its set off against the income for the assessment year 1989-90 was analyzed. The Tribunal found that the assessee had claimed the wage liability expenditure in the books of accounts for the assessment year 1989-90 and had not claimed it for the assessment year 1990-91. The Tribunal held that the assessee was not justified in claiming the expenditure for the latter year. As the revenue could not demonstrate any tax effect variation due to this decision, the appeal was dismissed as it did not impact the revenue.

4. Finally, the issue of allowing relief to the assessee on the depreciation of sale of assets/surveyed off assets for the assessment year 1990-91 under sections 43(6) and 50 of the Income Tax Act was discussed. However, as per the previous decision and the lack of impact on revenue demonstrated by the revenue's counsel, the appeal was dismissed without further consideration of this issue.

In conclusion, the High Court of Jharkhand addressed various issues raised by the appellant regarding income tax matters for the assessment year 1990-91. The court relied on previous decisions and assessments to resolve the issues and dismissed the appeal based on the findings and decisions made in prior cases involving the same parties.