Madras H.C : The assessee filed a return of income claiming expenditure of Rs. 56,42,74,000 on account of voluntary separation scheme, out of which Rs. 6,47,55,000 was towards replenishment of gratuity fund. The AO, inter alia, allowed only a sum of Rs. 6,47,55,000, and the balance amount was disallowed for the purpose of MAT because it was in the nature of provision only

High Court Of Madras

CIT vs. Areva T & D India Ltd.

Section 143(2), 147, 115JA, 234D

Asst. Year 1999-2000

K. Raviraja Pandian & P.P.S. Janarthana Raja, JJ.

Tax Case (Appeal) Nos. 1064 and 1065 of 2008 and Misc. Petn. No. 1 of 2008

6th August, 2008

JUDGMENT

K. Raviraja Pandian, J. :

These appeals are at the instance of the Revenue against the order of the Tribunal “A” Bench, Chennai dt. 21st July, 2006, passed in ITA Nos. 2236/Mad/2005 and 526/Mad/2006 respectively.

The relevant assessment year is 1999-2000. The assessee filed a return of income claiming expenditure of Rs. 56,42,74,000 on account of voluntary separation scheme, out of which Rs. 6,47,55,000 was towards replenishment of gratuity fund. The AO, inter alia, allowed only a sum of Rs. 6,47,55,000, and the balance amount was disallowed for the purpose of MAT because it was in the nature of provision only. The AO while giving effect to the order levied interest under s. 234D. Aggrieved by the order of the AO the assessee filed an appeal before the CIT(A), who allowed the appeal in favour of the assessee holding that the assessee had made a provision towards ascertained liability and deleted the addition and also held that interest under s. 234D is leviable in the present case as the assessment was completed after the introduction of the section. The Revenue filed an appeal before the Tribunal on the issue of deletion of the addition towards provision for voluntary separation scheme for the purpose of calculating profits under s. 115JA and the assessee filed a cross-objection on the issue of levy of interest under s. 234D. The Tribunal with regard to the Revenue’s appeal upheld the order of the CIT(A) and allowed the appeal in favour of the assessee, with regard to the interest under s. 234D following the decision of the Delhi Bench in the case of Glaxo Smithkline Asia (P) Ltd. vs. Asstt. CIT in ITA No. 2823/Del/2004 and 819/Del/2005 [reported at (2005) 97 TTJ (Del) 108—Ed.]decided the issue in favour of the assessee. The assessee filed an appeal under s. 260A to this Court against the part of the order which was against it. This Court found that the notice issued cannot be treated as notice under s. 143(2) and remanded the matter to the AO, leaving all issues open, to decide the issue afresh after issue of notice and opportunity to the assessee. This appeal is being filed against that part of the order of the Tribunal which was against the Revenue.

In view of the order of this Court in the assessee’s own case reported Areva T&D India Ltd. vs. Asstt. CIT (2007) 207 CTR (Mad) 497 : (2007) 294 ITR 233 (Mad) wherein the order of the Tribunal as well as the authorities below have been set aside and liberty was given to the AO to frame the assessment after considering the matter afresh with reference to the objections given by the assessee for reopening and issuing notice under s. 143(2) of the Act and giving an opportunity to the assessee to raise all contentions relating to reopening of assessment as well as the merits of the case, nothing survives in these appeals and the Revenue cannot contend that this issue has to be considered separately. At the risk of repetition, we say that the order of the Tribunal as well as the CIT(A) and the AO have been set aside and the matter is directed to be reconsidered afresh and the question of law now raised for maintaining the appeal no longer exists. Hence, the appeals are dismissed. Consequently, the connected Misc. Petn. No. 1 of 2008 is also dismissed.

[Citation : 327 ITR 183]