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2016 (9) TMI 154 - HC - Income TaxLiability under MAT provisions - effect of insertion of clause (i) to explanation (1) of subsection( 2) of section 115JB of the Income Tax Act, 1961 with effect from 1.4.2001 - Held that:- Having gone through the judgement of the Supreme Court in case of Vijaya Bank (2010 (4) TMI 46 - SUPREME COURT ) and decisions of Karnataka High Court in cases of Kirloskar Systems Ltd. (2013 (12) TMI 9 - KARNATAKA HIGH COURT ) and Yokogawa India Ltd.(2011 (8) TMI 766 - KARNATAKA HIGH COURT ), we are of the opinion that irresolvable conflict has arisen between the two judgements of Division Benches of this Court which cannot be resolved by having resort to the decision of the Supreme Court in case of Vijaya Bank (supra). In the said decision Supreme Court interpreted explanation(1) to section 36(1)(viii) of the Act which provides that for the purposes of the said clause, any bad debt or part thereof written off as irrecoverable in the accounts of the assessee, shall not include any provision for bad and doubtful debts made in the account of the assessee. The Supreme Court held and observed that said explanation would not govern a situation where there was an actual write off by the assessee in his books in the manner explained in the judgement. Counsel for the assessee would therefore, contend that in the present case also the same legal philosophy would apply and clause(i) of explanation below subsection( 2) of section 115JB would not come into play. Undisputedly, the decision of the Supreme Court in case of Vijaya Bank (supra), was not rendered in context of newly inserted clause(i) of explanation(1) below subsection( 2) of section 115JB. In that sense it cannot be said that the decision of this Court in case of Deepak Nitrite Limited(supra) was rendered per incuriam though it is true that the said decision of the Supreme Court was available by the time judgement of High Court in case of Deepak Nitrite Limited(supra) was rendered, was not noticed. In view of the judgement of the Supreme Court in case of Vijaya Bank (supra), whether this Court would have taken a view as was adopted by Deepak Nitrite Limited(supra), is neither possible nor proper on our part to speculate upon. The situation therefore, has arisen where the decision in case of Deepak Nitrite Limited(supra) was rendered without the aid of Supreme Court judgement in case of Vijaya Bank (supra), which though may have some bearing on the interpretation of the relevant statutory provisions, would not render the decision in case of Deepak Nitrite Limited(supra) per incuria. Let there be a reference to the Larger Bench to consider the following question : “Whether in view of decision of the Supreme Court in case of Vijaya Bank (supra), judgement in case of Deepak Nitrite Limited (2011 (8) TMI 1209 - GUJARAT HIGH COURT ) was not correctly decided and, therefore, later judgement in case of Indian Petrochemicals Corporation Ltd. (2016 (9) TMI 110 - GUJARAT HIGH COURT) lays down the correct law?
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