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2018 Supreme(P&H) 4104
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH
S.J. Vazifdar, Avneesh Jhingan, JJ.
Commissioner Of Income-tax - Appellant
Versus
M/s Nhpc Ltd. - Respondent
Income Tax Appeal No. 136 of 2015 (O&M)
Decided On : 28-02-2018
Tajender and K. Joshi, Advocate, for the Appellant; Ved Jain, Advocate, for the Respondent
The central legal point established in the judgment is the interpretation and application of various sections of the Income Tax Act, particularly in relation to the treatment of specific items and provisions.
Headnote:
Income Tax - Assessment Year 2006-07 - Section 115JB, Section 2(24), Section 28, Section 2(24), Section 115JB, Section 14A - The judgment discusses the applicability of various sections of the Income Tax Act, including the treatment of 'advance against depreciation' as income, addition of 'Advance Against Depreciation' under section 143(3), disallowance of depreciation claimed on land, provisions made for gratuity, leave encashment, post retirement medical benefits, LTC, Baggage allowance, Matching Contribution on Leave Encashment, provisions for loss in hedging transaction, and indirect expenses incurred on administrative and other heads. The court's decision is influenced by the interpretation of these sections and their applicability to the facts of the case.
Fact of the Case:
The case pertains to an appeal against the order of the Income Tax Appellate Tribunal upholding the order of the Commissioner Income Tax (Appeals) for the Assessment Year 2006-07. The appellant raised substantial questions of law regarding the treatment of various items under the Income Tax Act.
Finding of the Court:
The court found that the questions raised by the appellant were covered against the appellant by previous orders and judgments. The court also analyzed specific issues related to the treatment of depreciation claimed on land, provisions made for various benefits, loss in hedging transaction, and disallowance of indirect expenses. The court's findings were influenced by the interpretation of relevant sections of the Income Tax Act.
Issues: The issues included the treatment of 'advance against depreciation' as income, addition of 'Advance Against Depreciation' under section 143(3), disallowance of depreciation claimed on land, provisions made for gratuity, leave encashment, post retirement medical benefits, LTC, Baggage allowance, Matching Contribution on Leave Encashment, provisions for loss in hedging transaction, and indirect expenses incurred on administrative and other heads.
Ratio Decidendi: The court's decision was based on the interpretation and application of relevant sections of the Income Tax Act, including Section 115JB, Section 2(24), Section 28, Section 2(24), Section 115JB, and Section 14A. The court's analysis and conclusion were influenced by the legal provisions and their interpretations.
Final Decision: The court dismissed the appeal based on its findings and the applicability of previous orders and judgments.
JUDGMENT
S.J. Vazifdar, C.J. - This is an appeal against the order of the Income Tax Appellate Tribunal upholding the order of the Commissioner Income Tax (Appeals). The matter pertains to the Assessment Year 2006-07.
2. The appellant contends that the following substantial questions of law arise in this appeal:-
"1. Whether on the facts and in circumstances of the case and in law, the Hon'ble ITAT was right in law in dismissing appeal of the Revenue observing that 'in view of categorical finding of the Supreme Court we hold that the CIT(A)was correct in holding that advance against depreciation cannot be added under the computation of the normal income', whereas the Hon'ble Supreme Court in its decision dated 05.01.2010 has held that the 'advance against depreciation' is 'income received in advance', thus making the said income subject to 'Charge' under Chapter-II, as business income under Chapter-IV-D read with sub clause (i) of sub-section 24 of section 2 of the Income Tax Act?
2. Whether, on the facts and in circumstances of the case and in law, the Hon'ble ITAT was right in law in deleting the addition of Rs. 57,27,25,000/- made by the Assessing Officer under section 143(3) (and not under section 115JB) on account of "Advance Against Depreciation" ignoring the provisions of section 2(24) read with section 28 of the Income Tax Act, 1961, which provides that "income" includes profits and gains and the profits and gains of any business or profession carried on by the assessee at any time during the previous year is taxable?
3. Whether, on the facts and in circumstances of the case and in law, the Hon'ble ITAT was right in law in deleting disallowance of Rs. 1,10,04,534/- made by the Assessing Officer in computing the book-profit under section 115JB in respect of depreciation claimed on land after amortization of land by the assessee because there is no depreciation allowable on land under Companies Act and no rate of depreciation is provided in schedule XIV of Companies Act?
4. Whether, on the facts and in circumstances of the case and in law, the Hon'ble ITAT was right in law in applying ratio of decision in case of M/s Apollo Tyres 255 ITR 273 (SC) when the computation of book profit was not as per Companies Act and wrongly claimed depreciation on land not allowable in Companies Act?
5. Whether, on the facts and in circumstances of the case and in law, the Hon'ble ITAT was right in law in deleting disallowance of Rs. 24,84,24,189/- made by the AO in computing book profit under section 115JB on a/c of provisions made for gratuity, leave encashment, post retirement medical benefits, LTC, Baggage allowance and Matching Contribution on Leave Encashment even when the assessee has failed to For Subsequent orders see ITA-356-2015, ITA-385-2015,
-- and 1 more. establish these provisions to be of ascertained in nature?
6. Whether, on the facts and in circumstances of the case and in law, the Hon'ble ITAT was right in law in deleting addition of Rs. 22,99,80,552/- made by the Assessing Officer in computing the bookprofit under section 115JB as well as in normal income in respect of 'provisions for loss in hedging transaction' which were not an ascertained liability?
7. Whether, on the facts and in circumstances of the case and in law, the Hon'ble ITAT was right in law in deleting addition of Rs. 7,01,00,000/- which was made by the Assessing Officer under section 14A by applying Rule 8D?
8. Whether, on the facts and in circumstances of the case and in law, the Hon'ble ITAT was right in law in deleting the addition of Rs. 5,07,00,000/- made by the Assessing Officer in respect of indirect expenses incurred on administrative and other heads relating to the income to which section 10 applies?"
None of these are substantial questions of law and, if they are, they are answered by the judgment of the Supreme Court and of this Court.
3. Re: Questions 1 & 2:
These questions are covered against the appellant in view of our order and judgment da
