High Court Of Gujarat
CIT vs. Gujarat State Co-Op. Marketing Federation Ltd.
Section 143(1A)
Asst. Year 1990-91
R.S. Garg & M.R. Shah, JJ.
IT Ref. No. 120 of 1997
31st August, 2006
Counsel Appeared
Mrs. Mona M. Bhatt, for the Applicant : None, for the Respondent
JUDGMENT
R.S. GARG, J. :
At the instance of the Revenue, Tribunal, Ahmedabad Bench “B” in the matter of ITA No. 1290/Ahd/1992 relating to asst. yr. 1990-91 has referred the following question for the opinion of this Court. “Whether the Tribunal is right in law and in facts in confirming the order passed by the CIT(A) deleting additional income-tax of Rs. 22,42,320 leviable under s. 143(1A) of the Act on the ground that there is loss, additional tax cannot be imposed ?”
The short facts for disposal of the present reference are that, the assessee filed return for the current year 1990-91 on 23rd Oct., 1990 declaring loss of Rs. 22,92,36,633, the return was processed under s. 143(1)(a) and as per the adjustment explanatory sheet, the total income was computed at Rs. 3,58,822 and additional tax was calculated on prima facie additions of Rs. 2,63,24,652. The assessee claimed deduction under s. 80P for Rs. 2,58,21,400 on account of the profits from members. The AO made certain adjustments and observed that the net income for tax would be Rs. 2,59,62,784 and the assessee would be liable to pay additional tax at the rate of 20 per cent. The matter ultimately went to the Tribunal, which, after placing its reliance on the judgment of Delhi High Court in the case of Modi Cement Ltd. vs. Union of India (1991) 100 CTR (Del) 48 : (1992) 193 ITR 91 (Del), held that the assessee was entitled to the deductions and the additional income-tax could not be levied.
The Supreme Court heard the said matter along with the appeal filed by the Asstt. CIT vs. J.K. Synthetics Ltd. (2001) 166 CTR (SC) 498 : (2001) 251 ITR 200 (SC). The Supreme Court has observed that s. 143(1)(a) provided certain benefit, but after sub-s. (1A) was amended by the Finance Act, 1993 w.e.f. 1st April, 1989, which was the date upon which sub-s. (1A) has been introduced into the Act, it would be clear from the substituted sub-s. (1A) that even where loss declared by an assessee had been reduced by reason of adjustments made under sub-s. (1)(a), the provisions of sub-s. (1A) would apply. The Court further observed that it being a retrospective amendment, they could cover the controversy in the appeal and, therefore, the appeal had to be decided in favour of the Revenue.
The judgment in the matter of Modi Cement Ltd. (supra), on which the Tribunal had placed its reliance had been overruled by the larger Bench of the Supreme Court.
In view of the judgment of the Supreme Court in the matter of Asstt. CIT vs. J.K. Synthetics Ltd. (supra), the order passed by the Tribunal is set aside and the reference is decided in favour of the Revenue and against the assessee. The reference stands disposed of. No costs.
[Citation : 290 ITR 160]
