TMI Blog1998 (7) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/93 Taxman 310, which considered the provisions of section 115J of the Income-tax Act, 1961. After considering those decisions this Tribunal while deciding the appeals in the assessee's case on 29-4-1997 did not follow its earlier decision rendered in the case of Shriram Investments Ltd. A Misc. petition has been filed by the assessee for rectification of the order dated 29-4-1997 of the Tribunal. 3.1 It is argued by the assessee's counsel in the present proceedings that the assessee's appeal should have been allowed following the decision rendered in the case of Shriram Investments Ltd. It is further argued that the order of the Hyderabad Bench of the Tribunal reported in Pennar Steels Ltd.'s case and the Andhra Pradesh High Court's decision reported in Suryalatha Spg. Mills Ltd.'s case relied upon by the Tribunal in rejecting the assessee's claim were not put to the notice of the assessee's counsel thereby denying opportunity to the assessee's counsel to make submissions in respect of those decisions and to come to a conscious conclusion that to the extent of difference between depreciation debited in the books of account and depreciation to which the assessee is actually enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xceptions. Account to the ld. counsel for the assessee, the decision of the Madras High Court in L.G. Ramamurthi case has not only not been overruled by the Supreme Court but it is in conformity with the Supreme Court's decisions in Raghavamma v. Chenchamma AIR 1962 SC 136 and ACED v. V. Devaki Ammal [1995] 212 ITR 395. The ld. counsel also referred to the decision of the Supreme Court in the case of CIT v. Posetty Co. [1996] 220 ITR 216 and the decision of the Patna High Court in Gajendra Narain v. CIT [1997] 225 ITR 932/[1996] 89 Taxman 202. Our attention was also invited to the specific provision contained in the Civil Rules of Practice. 3.3 It is further argued by the ld. counsel that since the decision the A.P. High Court in Suryalatha Spg. Mills Ltd.'s case was not brought to his notice, the order passed by the Tribunal on 29-4-1997 in the present assessee's case is an ex parte order denying opportunity to him to make submissions in respect of the said judgment of the A.P. High Court as also the decision of the Hyderabad Bench of the Tribunal in Pennar Steels Ltd.'s case. It is further submitted that in the instant case the decision of the Tribunal to follow the A.P. High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Madras High Court in the case of L.G. Ramamurthi and pointed out that in that case the Tribunal gave a finding in assessment year 1958-59 that the so called gifts were not really gifts and interest on gifted amount was included in the hands of the donor. Such a finding of the Tribunal was confirmed by the Hon'ble Madras High Court. Those findings were controverted by the Tribunal in subsequent years 1961-62 and 1962-63. The issue involved in that case was whether the gifts were real or sham which was only question of fact. In the assessment year 1958-59 the Tribunal had held that gifts were sham, but subsequently in the assessment years 1961-62 and 1962-63 the Tribunal on the same facts came to the conclusion that gifts were real. It was in this background that the Hon'ble High Court observed that no Tribunal of fact has any right or jurisdiction to come to a conclusion entirely contrary to the one reached by another Bench of the same Tribunal on the same facts. According to the ld. D.R., the Andhra Pradesh High Court in the aforesaid case - Suryalatha Spg Mills Ltd. has referred to facts by interpreting the provisions of section 115J(1) and (2). The ld. D.R. also point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh High Court's decision in Suryalatha Spg. Mills Ltd.'s case. The ld. D.R. stated that the Tribunal has considered the fresh issues in the case of the assessee which were not considered by the earlier Bench in the case of Shriram Investments Ltd. and reasons for arriving at the conclusion have been given by the Tribunal. Even if the Andhra Pradesh High Court's decision was not argued there is no mistake in the Tribunal's order which could be rectified now. 5.1 The ld. counsel for the assessee, in reply, stated that the decision of the Madras High Court in L. G. Ramamurthi's case is binding and the observations of the Tribunal that latter Bench of the Tribunal should follow the decision of earlier Bench on an identical issue is the very ratio decidendi in that case. He relied on the Supreme Court's decision in the case of V. Devaki Ammal and contended that the matter is settled by the said decision. Reliance was also placed on the decision of the Supreme Court in B. Posetty Co.'s case. It was further stressed that the A.P. High Court's decision in Suryalatha Spg. Mills Ltd.'s case was not called upon to decide the issue considered in the case of Shriram Investments Ltd. It is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the minor children these transactions amounted to indirect transfer within the meaning of the said expression in section 16(3)(a)(iv) of the Indian Income-tax Act, 1922. He, therefore, included the interest on the sum of Rs. 50,000 (credited in the name of each donee) in the respective assessments of the three persons who figured as donors. In appeal, the AAC held that the process of gifting had been so devised as to circumvent the provisions of section 16(3)(a)(iv) of the 1922 Act and that the inclusion was justified. In assessee's further appeal, the Tribunal also affirmed the inclusion. When the matter was taken up to the Hon'ble Madras High Court on a reference by L.G. Balakrishnan, in their judgment reported in L.G. Balakrishnan v. CIT [1963] 49 ITR 102 the Hon'ble Madras High Court observed at page 106 as under: "The finding of the department as well as of the Tribunal is that there was an indirect transfer of assets by L.G. Balakrishnan to his minor son, Vijayakumar. This is certainly based on the evidence on record and it seems to us that this finding is fully justified and warranted." 6.2 Subsequently, two other debit and credit entries of Rs. 75,000 and Rs. 1,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal. It is the correctness of this conclusion of the Tribunal that was challenged by the Revenue in the form of the questions extracted at page 455 of 110 ITR. First question relates to the issue whether the income attributable to cross-gifts is not assessable in the hands of the donors? Second issue was whether the Tribunal was right in refusing to entertain and adjudicate upon the contention of the Department that alleged gifts were void in law. The issue, therefore, before their Lordships was whether the income attributable to cross-gifts was not assessable in the hands of the donor; and whether, the Tribunal was right in refusing to entertain and adjudicate upon the contention of the Department that the alleged gifts were void in law. 6.5 The Tribunal had already held in respect of the assessment years 1961-62 and 1962-63 that gifts were sham and not real. The matter was brought to the Hon'ble Madras High Court in the form of a reference application L. G. Ramamurthy v. CIT [1970] 1 ITJ 740 (Mad.). It was observed by the Hon'ble Madras High Court in L.G. Ramamurthy's case that funnelling back of the assets into the joint family, though ostensibly through the minor, is absolute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their Lordships of the Supreme Court held as under at page 320 of 198 ITR: "It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the fight of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out the words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings...." 6.7 The Apex Court in the case of Sun Engg. Works (P.) Ltd. has already held that it is neither desirable nor permissible to pick out a word or sentences from the judgment of the Court divorced from the context of the question under consideration and treat it to be the complete law declared by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the gifts were genuine, for the assessment years 1945-46 and 1946-47, and ultimately the Supreme Court refused to interfere with that finding - Kanhaiyalal Lohia v. CIT [1962] 44 ITR 405. In the assessment years 1947-48 to 1951-52, considerable additional evidence was adduced and the Tribunal, after taking into consideration the decision rendered in the earlier proceedings, came to the conclusion that the gifts were genuine. The various circumstances mentioned in this case - Brij Lal Lohia Mahabir Prasad Khemka were taken into consideration by the Tribunal subsequently which were not before it in earlier proceedings. The Hon'ble Supreme Court held that the circumstances taken into consideration by the Tribunal subsequently could not be said to be irrelevant and the finding of the Tribunal was not perverse. The finding being one of fact it is not open to the High Court or Supreme Court to interfere with it. The Supreme Court further held that the fact that in earlier proceedings the Tribunal took a different view of the two gifts was not a conclusive circumstances; the decision of the Tribunal reached in those proceedings did not operate as res judicata, there was a great deal m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illegality and had escaped from the clutches of law, similar persons cannot plead, nor the court can countenant that benefit had from infraction of law and must be allowed to be retained. Can one illegality be compounded by permitting similar illegal or illegitimate or ultra vires acts ? Answer is obviously no." The Apex Court in the well-known case of Yadu Nandan Garg. v. State of Rajasthan [1996] 1 SCC 334 at page 356 has observed that: "The wrong exemption under wrong action taken by the authorities will not clothe others to get the same benefit nor can Article 14 be pressed into service on the ground of invidious discrimination." On the same lines were the observations of their Lordships of the Supreme Court in the case of Chandigarh Administration v. Jagjit Singh [1995] 1 SCC 745. In Coromandel Fertilisers Ltd. v. Union of India [1984] SCC (Tax) 225, it was held in para 13: "Wrong decision in favour of any party does not entitle any other party to claim the benefit on the basis of the wrong decision. In that case, one of the items was excluded from the Schedule, by wrong decision, from its purview. It was contended that authorities could not deny benefit to the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of actual cost or W.D.V. or deduction of depreciation of assets, while completing the assessment under section 143(3). 10. Briefly stated, in the case of Pennar Steels Ltd., A Bench of the Hyderabad Tribunal had clearly held that under section 115J if the income computed under the normal provision is found to be less than 30% of the profit disclosed in assessee's profit and loss account, then the latter is deemed as its total income for charging tax under section 115J. There is no provision to go back to compute the total income and reduce the said 30% of book profit from any income before depreciation and then consider the allowability of depreciation. On the contrary, from sub-section (2) of section 115J it would be obvious that right of assessee to carry forward unabsorbed depreciation, loss, etc. is not to be affected by provisions of section 115J(1). This means that right to carry forward and the amount to be carried forward is to be de hors the provisions of sec. 115J(1) and is to be determined before the applicability of the provisions of section 115J(1) is seen. In that case it was argued before the Tribunal that the assessee's right to carry forward was affected in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was to ensure levy of minimum tax on what are known as "prosperous zero tax companies". Under the scheme of the section, which is a self-contained provision, where the total income of companies as computed under the provisions of the I.T. Act, in respect of the previous year relevant to the assessment year after April 1, 1988 is less than 30 per cent of their book profits, the total income of such companies charged to income-tax for the relevant previous year is treated as income equal to 30 per cent of such book profits and is taxed accordingly. Their Lordships of the A.P. High Court further pointed out that this provision involves two processes. First, the assessing authority has to determine the income of the company under the provisions of the I.T. Act and, secondly, the book profit has to be worked out in accordance with the Explanation below section 115J(1A), then it will have to be seen whether the total income determined under the first process is less than 30 per cent of the book profit; if so, sub-section (1) would be invoked and the total income of such company chargeable to income-tax for the relevant previous years shall be equal to 30 per cent of such book profit. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80 (aggregation of income and set off of carry forward loss) and Chapter VIA (deductions to be made in computing the total income). (b) the book profit had to be worked out in accordance with the Explanation below section 115J(1A). (c) the Assessing Officer will have to see whether the total income determined under the first process is less than 30 per cent of the book profit and if so, 30 per cent of such book profit of such a company shall be deemed to be total income and chargeable to income-tax under sub-section (1) of section 115J. (d) quantum of income determined under the provisions of sub-section (1) of section 115J will not be considered for the purpose of determining unadjusted depreciation, unabsorbed loss, etc. mentioned in section 115J. (e) Under section 115J(1) only notional or deemed income is determined and taxed. (f) for the purpose of determining the total taxable income under the provisions of the I.T. Act by way of regular computation all the deductions for expenditure incurred for the purpose of business and other allowances, including depreciation allowance have to be allowed or adjusted. (g) unabsorbed loss, unadjusted depreciation, etc. for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termined under Explanation below section 115J(1A). The first process of determining the income under section 143(3) remains valid and there is no provision in the I.T. Act to treat such assessment as sterilised or abandoned or abrogated. While completing the assessment under section 143(3) the Assessing Officer allows depreciation and determine W.D.V. of the asset under section 43(6) of the I.T. Act, 1961. Such determination of W.D.V. while computing income under regular provisions of the Act is valid in a particular assessment year unless in appeal for that particular assessment year the appellate authorities gave a different finding on the issue of W.D.V. In the case of the assessee before us the Assessing Officer has already allowed depreciation for assessment years 1989-90 to 1991-92 and unabsorbed depreciation for these assessment years has been carried forward and allowed deduction in the assessment year 1992-93 for which assessee's appeal is considered. Allowance of depreciation for earlier assessment years i.e. 1989-90 to 1991-92 means that written down value of assets as defined under section 43(6) has been determined by the Assessing Officer. As the assessee has not conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded proper opportunity to make submissions in respect of the aforesaid A.P. High Court judgment and the order of the Hyderabad Bench of the Tribunal. Contending further that the above mistake committed in the process of delivering an ex parte award is a mistake which goes to the root of the matter, the ld. counsel pleaded that the order passed by the Tribunal deserves to be recalled. Reliance was placed on the judgment of the Hon'ble Supreme Court in the case of Distributors (Baroda) (P.) Ltd. v. Union of India [1985] 155 ITR 120/22 Taxman 49. It was also argued that the Mumbai Tribunal's order in the case of Virendra Co. overlooked the complexities present in following a judgment, and also overlooked the position that the cause of justice will be served by posting the case and deciding the issue thereafter rather than deciding the issue without arguments. In view of these arguments, the ld. counsel prayed for recalling the order passed by the Tribunal in the case of the assessee. 17.2 We have considered the arguments of the ld. counsel. Admittedly, the Tribunal while rendering the decision in the case of the assessee, did consider all the arguments raised in the case of Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal is debarred from considering the decisions of the A.P. High Court and the Hyderabad Bench of the Tribunal without bringing the same to the notice of assessee or its counsel, which are relevant to the issues involved in the present assessee's case. The decision of any High Court, in the absence of any contrary decision of jurisdictional High Court or any other High Court, has a binding effect in the sense that it must be followed unless and until there are reasons for not following the same. We found that the aforesaid judgment of the A.P. High Court in the case Suryalatha Spg. Mills Ltd. is relevant to the issue in question. Similarly, the decision of the Hyderabad Bench of the Tribunal in Pennar Steels Ltd.'s case was found to be equally relevant to the issue involved in the assessee's case. We, therefore, followed those decisions while disposing of the present assessee's appeal. The ld. counsel for the assessee referred to the decision of the Mumbai High Court in the case of Geoffery Manners Co. Ltd. v. CIT [1996] 221 ITR 695/89 Taxman 287. In the said decision their Lordships of the Mumbai High Court followed its earlier decision in the case of CIT v. Thana Electric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Gujarat High Court held that the Tribunal is bound to follow sole judgment of a different High Court. Similarly in the case of CIT v. Deepak Family Trust (No. 1) [1994] 211 ITR 575/72 Taxman 406 the Hon'ble Gujarat High Court held that judgment of one High Court must normally be followed by another High Court. In the case of the assessee before us we could not find any reason to ignore the judgment of the A.P. High Court in Suryalatha Spg. Mills Ltd.'s case because that decision explains the basis of assessment and chargeability of income to tax under the scheme of the Income-tax Act. We, therefore, followed the said decision while deciding the assessee's appeal because there was no decision of any other High Court on the issue relevant herein. When there is no contrary decision of any other High Court as against the A.P. High Court's decision, and there is no reason why we should not have followed the said decision which is most relevant and which explains the scheme of the I.T. Act in the matter of computation of income and charging of income to tax under section 143(3) and under section 115J of the Act. We do not appreciate the line of argument of the assessee's counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co.'s case. In this case also the Tribunal considered the arguments of both the parties and material on record and had allowed the assessee's claim under sections 80HHC and 80-I for earlier years. But in the assessment year 1985-86 its claim for deduction under the above sections was disallowed by the Tribunal in view of the decision of the Apex Court in the case of CIT v. N. C. Budharaja Co. [1993] 204 ITR 412/70 Taxman 312. The assessee filed Misc. petitions under section 254(2) and contended before the Tribunal that even the D.R. had agreed that he had no say against the various submissions in the paper book containing assessee's statement of facts and summary of grounds of appeal. It was further contended that the Tribunal had taken cognizance of cases not cited before it and the assessee should have been given or should now be given an opportunity to differentiate and distinguish the decision in the case of N. C. Budharaja Co. The Mumbai Bench of the Tribunal rejected the assessee's application under section 254(2) and held as under (as per Head-notes): "As regards the first objection, the Departmental representative only conceded that there were several cases in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued was not factually correct and also on the ground that merely because the Tribunal had relied on its own knowledge by referring to some Supreme Court or jurisdictional High Court decision, and that too not to come to a final decision but only to support its own reasoning for coming to a particular conclusion, it could not be termed as a mistake apparent from record in the order of the Tribunal. The assessee's objection (3) had no force because the Departmental Representative had relied and cited the case of CIT v. Sterling Foods (Goa) [1995] 213 ITR 851/79 Taxman 381 (Bom.) in his arguments which was noted in the Tribunal's log book and had submitted that although a large number of Tribunal and some High Court decisions were in favour of the assessee, they were no longer good law after the decision of the Supreme Court in the case of N. C. Budharaja Co. It was, therefore, not obligatory on the part of the Tribunal to permit citations and counter citations to go on ad infinitum by giving a fresh opportunity to the opposite party after one case was cited by one side. It was also not obligatory on the part of the Tribunal to give an opportunity to the other party to go and st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision taken by an another Bench of equal constitution and in such situations normally the matter should be referred to a larger Bench. However, in the instant case, the situation was different. In the instant case, one of the Members of the Bench giving this decision was one who was the author of another decision of the Tribunal in the case of Arya Steel on which assessee had relied and hence, he could be conscious of the fact that the facts and circumstances of the instant case were different from the facts and circumstances of the case of Arya Steel in which he had given a decision in that assessee's favour and had even rejected the reference application. Secondly, the proposition that a Bench of coordinate jurisdiction should not differ from the decision of a Bench of equal strength, is subject to some exceptions and one of them is that if subsequently there is a Supreme Court decision which is the law of the land or the decision of the jurisdictional High Court which is binding on the Tribunal working under it, or if more evidence is adduced than what was available before the earlier Bench which took a different view, it is not only possible for the subsequent Bench but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epeated. According to the ld. counsel the major issues that arose for consideration are as below: (a) Whether, under the scheme of section 115J assessment the difference between depreciation allowable under the normal provisions of the I.T. Act and the book depreciation, is deemed to have been allowed within the meaning of section 43(6) of the Act for the purpose of arriving at the written down value? (b) Whether, the decision of the Supreme Court in the case of Upendra Senai (96 ITR 209) explaining the scope of the words 'actually allowed' contained in Section 43(6) is applicable to the assessee's case and binding ? 19.1 According to the ld. counsel the purpose for which section 115J was brought on statute book was to ensure that certain companies which make huge book profits and declare dividends but return losses for the purpose of Income-tax assessment taking advantage of the various incentives granted by the Government, pay some tax. The incentives that are allowed as a deduction while computing the business income are investment allowance, development rebate, etc. Certain other incentives which are allowed as deduction from the total income like the various provisions c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 44AD(3), introduced by Finance Act, 1994. He urged that section 44AD is similar to section 115J in that it provides for determination of total income in an ad hoc manner with a deeming provision as section 115J. Even so, section 44AD(3) has been specifically incorporated in the Statute Book, and the absence of similar provision under section 115J clinches the issue in favour of the assessee. It was further argued that no provision like section 32(1) third proviso was incorporated, if the intention was to disallow a portion or any portion of depreciation entitlement. According to the ld. counsel, these circumstances make it clear and self-evident that the right of an assessee to claim depreciation taking into account only the depreciation that was actually allowed in earlier previous years has not been taken away and was not intended to be taken away. The ld. counsel referred to Rules of Interpretation and the mischief rule or the rule of Hayden's case in the light of legislative practice under similar circumstances. He relied on the decision of the Supreme Court in Sales-tax Commissioner v. Modi Sugar Mills AIR 1961 SC 1047 at page 1051 in which it was held: "It cannot im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of the provisions of the said section 44AD (3), the ld. counsel argued that there is no similar provision in section 115J and hence, it cannot be presumed that the assessee had been actually allowed the deduction in respect of depreciation. 22.2 In this connection, we would refer to the decision of the Hon'ble Supreme Court in the case of Goodyear India Ltd. v. State of Haryana [1991] 188 ITR 402. The Hon'ble Supreme Court at pages 424 and 425 held that it is not permissible to construe a fiscal provision by making assumptions and presumptions. Similarly in the case of All India Federation of Tax Practitioners v. Union of India [1997] 228 ITR 68/93 Taxman 737 (Bom.) it was held that the laws relating to economic activity are different from those relating to fundamental rights. While interpreting the fiscal provisions, as held by the Hon'ble Supreme Court, there are no presumptions and assumptions. If it is provided in under section 44AD(3) that "as if the assessee had claimed and had been actually allowed" depreciation for the relevant year when profits and gains of business of civil constructions are computed, then it does not mean that in the absence of similar provisions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 2(40) of the Act]. Since section 44AD(3) is a part of regular computation of income under section 143 it was necessary to provide in sub-section (3) of section 44AD that while computing the profits and gains of business of civil construction the W.D.V. of the assets shall be deemed to have been calculated as if the assessee has claimed and had actually been allowed depreciation for each of the relevant assessment year. It was necessary to enact such a provision because, section 44AD is a part of regular assessment of business income, while making regular assessment under section 143. If such a provision has not been made in section 44AD(3) then there would have been doubts about the admissibility or allowability of depreciation in the case of computation of profits and gains of business of civil constructions, because provisions of section 32 as well as section 44AD form part regular assessment under section 143 and the scheme of computation of income from profits and gains of business. But section 115J is totally independent charging section and it has no connection with regular assessment or computation of income under the scheme of the Act, as provided in section 29 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defeat the intention of the Parliament. (ii) There is not a single provision in the whole of the Income-tax which supports the arguments of the ld. counsel in the present proceedings. If we accept such imaginary and fantastic arguments, then there are various provisions of the Act which have to be sterilized despite the fact that there is no specific provision for sterilizing even a single provision of the Income-tax Act. In the absence of provisions in the Statute we cannot be persuaded to accept the imaginary and fantastic arguments of the ld. counsel. Rather we will be doing horrible violence to the language of the statute and redrafting the Income-tax Act by sterilizing and abrogating the provisions of the Income-tax Act by a single stroke of pen. The Tribunal can only apply the law but in the process of applying the law there is no power to abrogate, abandon or sterilize the provisions. The arguments of the ld. counsel would lead to sterilization and abrobation of various sections such as, sections 22 to 27, 28 to 44D, 45 to 59, 69 to 69D, 70 to 80, 80A to 80VV, 142, 143, 144, 147, 148, and all the provisions relating to penalty under Chapter XXI. (iii) Even if it is accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arried forward loss under section 72 to be set off in next years because, these sections become sterilized once the assessment is made under section 115J. We are not convinced at this argument of the assessee's counsel because we cannot be persuaded to accept such an illogical, illegal and untenable argument, which makes the Income-tax Act, totally meaningless and defunct. Such an argument even defeats the right of an assessee to carry forward unabsorbed deductions under sections 32(2), 32A(3), 72, 80J, etc. which have been granted by the statute under sub-section (2) of section 115J, and therefore, leading to illegal and horrible consequences for other assessees who are entitled to relief under these sections. 24. In fact, the ld. counsel for the assessee was asked to explain how the provisions of section 115J(2) could be given effect to, if his arguments are accepted. At the time of hearing, it was stated that he is not interested in explaining the provisions of section 115J(2) and he is only interested in getting the depreciation allowed to the assessee. We are at a loss to understand this line of argument because the ld. counsel of a litigant is part of the Tribunal and while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion in the case of Shriram Investments Ltd. As it is a fundamental principle of interpretation that nothing is to be read in and nothing is to be implied, one can only look fairly at the language used in the statute (Karnataka State Financial Corpn. v. CIT [1988] 174 ITR 206 (Kar.), Smt. Radhdevi Mohatta v. CIT [1981] 129 ITR 229/5 Taxman 137 (Bom.). If para-17A of the Tribunal order in the case of Shriram Investments Ltd. and the arguments of the assessee's counsel are followed, then it would amount to adding extra words "anterior" to the provisions of section 115J(2) and redrafting of the said sub-section (2) of section 115J. Sub-section (2) of section 115J provides for determination of the amounts in relation to the relevant previous years, for which section 115J(1) is to be applied, to be carried forward to the subsequent year or years, under the provisions of sections 32(2), 32A(3), 72(1), 73, 74 or section 80J. Section 115J(2) nowhere provides for carry forward of unabsorbed allowances, losses and rebates under these sections from the years anterior, to the commencement of the operation of section 115J(1). Carry forward of unabsorbed allowances, losses and rebates und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , not only reduce the provisions of sub-section (2) of section 115J to a mere farce and non-existence, but such an argument entirely goes against the scheme of the Act. If the Revenue wants to tax a receipt the Burden lies on the Revenue to prove that a particular receipt is income under the Income-tax Act. When an assessee wants to claim deduction, rebate, relief or allowance the burden lies on the assessee to prove that he is entitled to such deduction, rebate, relief, etc. claimed by him. In the present assessee's case the ld. counsel placed reliance on the decision of the Hon'ble Supreme Court in Madeva Upendra Sinai's case. The principle laid down by the Hon'ble Supreme Court in that case is applicable only while completing assessments under section 143(3) and such principles have been kept in mind by the Assessing Officer while completing the assessments under section 43(3) not only for earlier years but also for the assessment year under consideration. There is no scope for argument that once the book profit is charged to tax under section 115J the other provisions of the Act are sterilized or abandoned. Whenever the legislature wanted to make a particular provision of law i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een that the legislature has specifically made inoperative provisions in sections 139 to 158 regarding the procedure for assessment in the case of persons who submit statements of their income under sub-section (1) of section 115K. If the statements furnished by such persons under section 115K(1) are true, then no proceedings under any other chapter under the Income-tax Act, can be initiated against such persons who submitted statements under section 115K(1). Thus, the legislature has specifically provided abandonment of the provisions of the Income-tax Act, wherever it desired so. But in the case of companies when tax is charged under section 115J(1), there is no provision for sterilizing or making inoperative other provisions of the Act and, therefore, such an argument of the ld. counsel for the assessee that other provisions of the Act are sterilized once book profits are taxed under section 115J is not only against the scheme of the Act but is based purely on assumptions and presumptions, which have no place in interpreting the fiscal statute and which reduces the provisions of sub-section (2) of section 115J other various sections as non-existent. 27. We may mention that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions a particular provisions of law may be construed in a different manner than the manner in which it was construed earlier. Therefore, the Tribunal need not follow the ratio laid down in its earlier orders, if certain judicial precedents which were not brought to its notice earlier or provisions of law or correct interpretation of law came to its knowledge subsequently. It may happen that all the aspects of the case and law applicable might not have been brought to the notice of the Tribunal earlier when the same issue was decided. A Tribunal may reach a different conclusion in a particular case, if after considering all the aspects of the case and other material on record which were not considered earlier, it feels that its earlier decision does not lay down good law. It would rather be incongruous to follow an earlier decision on the same issue if after considering all the aspects of the case and other material on record which came to the notice of the Tribunal subsequently, it considered that a different decision would be correct than the earlier one. In the name of judicial uniformity the error should not be perpetuated when different conclusion seems to be correct on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, when the Tribunal has already given a decision in the assessee's case and the decision of the High Court in B. Posetty Co.'s case does not deal with the principle of res judicata as applicable to the Tribunal's decisions, this case is also not relevant. (iii) Gajendra Narian's case. In this case the ld. counsel for the assessee has invited our attention that while writing the judgment the Hon'ble Patna High Court considered that the matter needs further consideration and the matter could be decided afresh since the other matters appertaining to the assessee were also listed. This case also does not deal with the principle of res judicata applicable in the present case before the Tribunal and the decision of the Patna High Court in the case of Jhaverbhai Patel which we have discussed in para 7.2 of this order is applicable. Therefore, this decision in Gajendra Narain's case has also no relevance to the facts of the present assessee's case. 29. We have considered all the submissions and case law cited by the ld. counsel for the assessee. If a particular decision or argument of the ld. counsel has not been mentioned in the Tribunal's order then it is because they are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to prove with his or her knowledge. It is certainly not open to the counsel or Advocate appearing before the Tribunal to canvass the correctness or otherwise of a judgment of the Court or the Tribunal before the Tribunal, in an affidavit. We, therefore, do not appreciate the contents of the affidavit filed by the assessee's counsel and therefore, they are rejected as unwarranted and misconceived. 31. This order forms part of our order dated 29-4-1997 in the case of the assessee and should be considered as part and parcel of the said appellate order. For the detailed reasons mentioned in our appellate order dated 29-4-1997, the assessee's appeal on the above issue has rightly been dismissed and as a consequence the miscellaneous petition filed by the assessee is also dismissed. Per Shri N.D. Raghavan, Judicial Member 32. I have carefully gone through the erudite order proposed by my learned Brother. After doing so, I separately pass this order, though it may be almost in agreement with it, in the paragraphs following. These miscellaneous petitions are identical involving similar facts and rival submissions, though of different assessees but happening to be of the same gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal are not apposite to the facts in issue in the instant case. As per the decision in the case of L.G. Ramamurti which is in tune with the decision in the case of Raghavamma V. Devaki Ammal's case besides the decision in the case of B. Posetty Co. and Gajendra Narain, the decision in the case of Shriram Investments Ltd. should have been followed by the impugned order of the Tribunal. Further, the Hon'ble Andhra Pradesh High Court has not considered the following aspects in the case of Shriram Investments Ltd. namely on the scope of section 43(6) and also the Hon'ble Supreme Court's decision in the case of Madeva Upendra Sinai's besides the absence of provision like 44AD(3) which would have been provided if the legislature really wanted to deprive the difference between book depreciation and income-tax depreciation. That apart, when the total income of the company is assessed under section 115J, the other provisions of the Act are sterilised or abandoned. Further, no provision of the Act authorizes the assumption that depreciation not allowed shall be deemed to have been actually allowed especially when the omission is significant in the light of the legislative practice a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to the facts and interpreted the provisions of sections 115J(1) and (2). Better wisdom of the Court should prevail over that of the lower court particularly when the Bombay High Court also emphasized in the case of Smt. Godavaridevi Saraf the importance of a decision of a High Court. Absence to incorporate a particular provision on a particular issue in a statute cannot be supplemented or supplanted by the Court. Perusal of the provisions of section 115J starting with a non obstante clause clearly reflects that loss or depreciation can be carried forward purely under the normal provisions of the Act. In the case of Shriram Investments Ltd. Madras Bench of the Tribunal did not consider the question as to whether depreciation of the earlier years could be allowed for latter years. Hence that decision has not nexus or relevance to the assessment year in question of the instant case as no appeal on this issue is pending for decision for the earlier years. Further, the issue dealt with by the Tribunal's order impugned herein was not considered by the said Madras Bench of the Tribunal in that case. Hence no error has been committed by the Tribunal to allege that miscellaneous peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same issue. 36.2 Further, the stand of the assessee that when the total income of the company is assessed under section 115J the other provisions of the Act arc sterilized or abandoned, goes against the very scheme and provision of the Act. But the claim that sterilization, abandonment and abrogation of the other provisions of the Act happen only when the income is assessed under section 115J, is, therefore, erroneous particularly in the light of the decisions rendered by the Hon'ble Andhra Pradesh High Court as well as the Hyderabad Bench of the Tribunal respectively in the cases of Suryalatha Spg. Mills Ltd. and Pennar Steels Ltd. which finding is hereby rendered after thoroughly considering the Madras Bench decision in the case of Shriram Investments Ltd. Any law made by Parliament has to be interpreted as per the intention of the Parliament which has to be gathered only from the plain and unambiguous language used in the statute rather than any notion which may be entertained by the Court as to what is just or expedient. In the process of interpretation, the Tribunal is, therefore, not supposed to insert or introduce words or phrases which are not found in the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer. Hence the assessment orders for the years 1989-90 to 1991-92 have become final and such bifurcation of WDV, depreciation allowance and unabsorbed depreciation for these three years cannot be questioned in the appeal for the assessment year 1992-93 as by virtue of assessment orders for earlier three years this issue has become final for each year and cannot, therefore, be again brought in the year 1992-93. Hence the assessee's stand that depreciation was not allowed for the earlier years is wrong. As the income was computed under section 143(3) for the earlier years and while computing the profits and gains of the business of the assessee the Assessing Officer granted depreciation to the assessee as per the provisions of the Act and the decision of the Apex Court in the case of Madeva Upendra Sinai the arguments of the assessee have come totally fruitless. This is demonstrated in detail in paragraph-10 of the Tribunal's order dated 29-4-1997 impugned herein. As the assessee has not contested the determination of WDV of assets for the concerned years in appeal, such determination has become final and cannot be considered by the Tribunal in the assessment year 1992-93 as afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Similarly so the answer furnished in para. 10 of the impugned order holds good regarding applicability of the decision in the case of Madeva Upendra Sinai. The Assessing Officer computed the income for the years 1989-90 to 1991-92 as per the decision in the case of Madeva Upendra Sinai regarding section 43(6) of the Act and allowed depreciation to the assessee. The assessee accepted such assessment and determination of WDV of assets for all the years had become final which cannot, therefore, be challenged again by the assessee in the year 1992-93. In other words, the assessee has no right to agitate in the appeal for the year 1992-93 the issues pertaining to the earlier years of 1989-90 to 1991-92 which have become final. 36.5 It is true that the stand of the assessee is entirely contrary to the scheme of the Act regarding computation of income under section 143(3) as explained in the case of Suryalatha Spg. Mills Ltd. No argument has been advanced by the assessee to specify how the case is not applicable to the assessee's case in so far as the scheme of assessment and charging of tax were concerned. The Hon'ble Andhra Pradesh High Court held that the assessing authority had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , where the case was reposted for hearing, it has to be stated here that the assessee herein has been fully and sufficiently heard in these miscellaneous petitions also even on the merits of the appeal again, particularly pertaining to the decisions over which the assessee demanded to have opportunity of being heard. In my humble opinion and with great respect to my learned Brother, I am unable to agree with his views mentioned particularly in paragraph 18 of his order that the Tribunal is not required to issue show-cause notice to a party as to why a particular decision of the High Court should not be followed and that if the assessee's counsel is not aware of a contrary decision of a particular High Court, then it is not the duty of the Tribunal to bring to his notice such a decision of the particular High Court and then invite arguments thereon, and further that if the counsel may not be aware of various decisions relating to the issues in appeal, it does not mean that the Tribunal is bound to furnish him the list of cases which the Tribunal wanted to follow or apply on the relevant issue. Furthermore, my learned Brother has viewed in paragraph 18.3 that it is impracticable to g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnals, reports and statute book. Furthermore, the counsel on either sides in a legal proceedings are learned in law as well as the Judges of the Court are also knowledgeable in law, and yet the learned counsel on both sides agitate before a legal forum and still the learned Judges of a Bench differ from each other inspite of the fact that the learned Members of the Bar and the Bench are exponents in law. Furthermore evidence is that inspite of the cases being argued with full opportunity of being heard even in High Courts different views are held not only by different High Courts but also by the same High Court sometimes over the same issue conflicting with the other, besides the Hon'ble Supreme Court too changes its view on a particular issue subsequently when same issue is cropping up again after hearing the parties, on the principle that to perpetuate an error is no heroism, to rectify it is the compulsion of the judicial conscience. Multiplicity of proceedings and wastage of time cannot come as hindrance to a Tribunal or Court, i.e., judiciary while rendering justice as those are to be, if at all, bothered by only the other wings of the Government, i.e., Legislature and Execut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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