Calcutta H.C : On the facts and in the circumstances of the case, the Tribunal was wrong in directing the AO to consider the issue for asst. yr. 1986-87

High Court Of Calcutta

CIT vs. Ajay Forgings (P) Ltd.

Section 254(1)

Asst. Year 1985-86

Ajoy Nath Ray & Indira Banerjee, JJ.

IT Ref. No. 8 of 1998

9th July, 2002



The single question referred to us is as follows : “On the facts and in the circumstances of the case, the Tribunal was wrong in directing the AO to consider the issue for asst. yr. 1986-87”

The accounting year of the assessee was upto 30th June. The assessee received a debit note of Rs. 1,05,420 on the 15th July, 1984, but the assessee had claimed the deduction for the asst. yr. 1985-86, the previous year in respect whereof ended on 30th June, 1984. The extra gap of one year from 1984-85, i.e., between the accounting year and the assessment year occurred because the assessee’s accounting year did not end with the 31st of March.

The Tribunal opined that the debit note being received 15 days after the end of the accounting year, it could not be claimed on a mercantile basis in respect of that previous year; its reason was that there cannot be a debt unless it is made known.

We are quite in agreement with that line of reasoning and the Department also has not raised any issue about it. The Department is aggrieved by one sentence which is at the end of para 5 of the Tribunal’s order dt. 16th March, 1996. That sentence is as follows : “However, as the date of receipt falls in the accounting year relevant for the asst. yr. 1986-87, we direct the AO to consider the claim of the assessee in the asst. yr. 1986-87.”

The Department submits that as the Tribunal was considering the claim of the assessee for the asst. yr. 1985-86, the Tribunal could either allow or disallow the claim for that assessment year, and it had jurisdiction to decide either way. But when dealing with the case for that assessment year it could not pass any remark or give any direction upon the AO for quite another assessment year, viz., 1986-87.

We find from the direction given by the Tribunal that it did not order the AO to allow the claim in regard to the debit note for the asst. yr. 1986-87. It only directed a consideration of the matter by the AO in that assessment year.

In view of the reasoning of the Tribunal’s judgment given in regard to the debit note two points clearly emerge : (i) That the debit note could not be claimed for the asst. yr. 1985-86, and (ii) that the debit note fell appropriately for consideration in the asst. yr. 1986-87, whether it be actually allowed in that year or not. Saying both these things in the order of the Tribunal it did nothing more than rendering completeness to its order. If nothing had been said about the falling of the debit note appropriately into the asst. yr. 1986-87, the result of the Tribunal’s order would still be the same but it would be just a little more vague and just a little less certain. We are of the opinion that no judicial authority exceeds its jurisdiction by merely clarifying and stating succinctly what its decision is, provided the decision is substantially within jurisdiction.

The question is accordingly answered in favour of the assessee and in the negative.

[Citation : 257 ITR 572]

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