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TMI Blog1988 (8) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... leted by the ITO on11-10-1983, in accordance with the directions of the IAC u/s. 144B. The ITO had made additions for both the years in respect of cash assistance and duty drawback and had added interest under sections 139(8) and 217(1A). So far as the claim of weighted deduction is concerned, for the A. Y. 1981-82, the ITO did not accept the claims in regard to hidden defect charges and expenses on the maintenance of facilities for quality control and inspection of goods. For the A. Y. 1982-83, the claims in respect of the hidden defect charges and export promotion expenses were held to be not qualified for allowance of weighted deduction. However, weighted deduction was allowed by the ITO on the following items : ----------------------------------------------------------------------- Sl. Claim Amount allowed Amount allowed No. &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; ----------- ------------ 9,61,721.35 17,38,306.00 ----------- ------------ ----------------------------------------------------------------------- 3. The assessee went up in appeal before the CIT (A) and the CIT (A) vide his separate orders, both dated 13-3-1984 dismissed the assessee's appeals in regard to the additions of cash assistance, duty drawback and interest u/ss. 139(8) and 217(1A). No appeals were fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the removal of doubts and therefore, the amendment had retrospective effect. Shri Bajpai, therefore, argued that the decisions of the Special Bench of the Appellate Tribunal on which reliance had been placed on behalf of the assessee could no longer be pressed into service. In reply to a query from the Bench, he submitted that since the earlier Explanation had been substituted, and since the amendment referred to above was of a clarificatory nature, it was no longer relevant whether the said amendment was to a substantive provision or to a procedural provision. He particularly relied upon the decision of Bombay Bench 'C' of the Appellate Tribunal in the case of Agro Exports Ltd. v. ITO [1988] 25 ITD 46 wherein it was held that the Explanation to section 263(1) as inserted by the Taxation Laws (Amendment) Act, 1984 was of a clarificatory nature and was to have a retrospective operation though it was inserted with effect from 1-10-1984. 5. We have heard the learned representatives of both the sides. In reply, Shri Dinodia while reiterating the submissions, sought to differentiate the decision of the Bombay Bench of the Appellate Tribunal in the case of Agro Exports Ltd. and fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive and not merely procedural. It is only a procedural provision to which retrospectivity can be normally attracted. Another consideration which is very weighty in this respect arises from the reference by Shri Dinodia to the provisions of Explanation 2 to section 37(2A) which, though using the expression "For the removal of doubts, it is hereby declared...." occurs at no less than 18 different places in the Act. In the following 7 instances retrospectivity has been specifically mentioned in the Explanations inserted using the expression in question : ----------------------------------------------------------------------------- Sl. Provision Remarks No. ----------------------------------------------------------------------------- 1. Explanation to section 9(1)(ii) Inserted by Finance Act, 1983 with &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -4-1968. 6. Explanation 2 to section 37(2A) Inserted by the Finance Act, 1983 with retrospective effect from 1-4-1976. 7. Explanation 8 to section 43 Inserted by the Finance Act, 1986 with retrospective effect from 1-4-1974. ----------------------------------------------------------------------------- against these 7 instances there are 11 other instances including the one u/s. 263 where, though the same expression is used, there is no mention of retrospective effect having been given to it. Those instances are the following : ----------------------------------------------------------------------------- Sl. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 984of the learned CIT (A). This objection, therefore, raises the question whether it was a case of complete merger or partial merger. In this connection, reliance was placed by Shri Dinodia on the following decisions to say that there was a complete merger : (1) Oil India Ltd. v. CIT [1982] 138 ITR 836 (Cal.); (2) Shree Arbuda Mills Ltd. v. ITO [1983] 3 SOT 311 (Ahd.)(SB); (3) CIT v. Hindustan Aeronautics Ltd. [1986] 157 ITR 315 (Kar.)(FB); (4) Addl. CIT v. Vijayalakshmi Lorry Service [1986] 157 ITR 327 (Kar.); (5) General Beopar Co. (P.) Ltd. v. CIT [1987] 167 ITR 86 (Cal.); and (6) CIT v. P. Muncherji & Co. [1987] 167 ITR 671 (Bom.). On the other hand, Shri O. S. Bajpai, the learned departmental representative submitted that there was only a partial merger of the order of the ITO with the order of the learned CIT (A) since the claim deduction u/s. 35B was not the subject-matter of appeal before the learned Commissioner of Income-tax (Appeals). In this connection, reference was made by him to the following decisions : (1) CIT v. Tejaji Farasram Kharawala [1953] 23 ITR 412 (Bom.); (2) State ofMadrasv. Madurai Mills Co. Ltd. AIR 1967 SC 681; (3) Karsandas Bhagwandas Patel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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