Principal Commissioner Of Income ... vs Graphite India Limited
2021 Latest Caselaw 1598 Cal/2

                                         1



OD-6
                       IN THE HIGH COURT AT CALCUTTA
                         Special Jurisdiction (Income tax)
                                 ORIGINAL SIDE


                  IA No.GA 2 of 2017 (Old No. GA 1873 of 2017)
                                       In
                                ITAT 221 of 2017

       PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL 4, KOLKATA
                                  VS
                        GRAPHITE INDIA LIMITED

BEFORE:
The Hon'ble JUSTICE T. S. SIVAGNANAM
                AND
The Hon'ble JUSTICE HIRANMAY BHATTACHARYYA
Date : 14th December, 2021.
                                                                           Appearance:
                                                        Mr. Suniti Kumar Chatterjee, Adv.
                                                                      ...for the appellant.

                                                                   Mr.Sounak Basu, Adv.
                                                                    ...for the respondent.

The Court : This appeal has been filed by the Revenue under Section 260A

of the Income Tax Act, 1961 (the Act, in brevity) and is directed against the order

dated 9th November, 2016 passed by the Income Tax Appellate Tribunal, "C"

Bench, Kolkata in ITA No.539/KOL/2010 and ITA No.598/KOL/2010 for the

assessment year 2005-06.

The Revenue has raised the following substantial question of law for

consideration:

i) Whether on the facts and in the circumstances of the case the

Learned Tribunal was justified in law to hold waiver of sales tax loan

to be capital in nature inspite of the fact that the sales tax itself is a

revenue item and therefore any waiver relating thereto shall be in the

nature of revenue ?

We have heard Mr. Chatterjee, learned Counsel appearing for the

appellant/Revenue and Mr. Basu, learned Counsel appearing for the

respondent/assessee.

The substantial question of law raised before us has been decided in favour

of the assessee and against the Revenue by the Hon'ble Supreme Court in the

case of Commissioner of Income Tax -versus- Balkrishna Industries Ltd. reported

in (2018) 300 CTR (SC) 209. The facts of the said case was identical to the case

before us and this is also a case where the assessee availed the benefit of Deferral

Scheme announced by the Government of Maharashtra which provided for affront

payment of the sales tax liability prematurely in terms of the agreement between

the parties which was in tune with the scheme announced by the Government.

The Hon'ble Supreme Court held that what the assessee was required to pay after

12 years in 6 instalments was paid by the assessee prematurely and that the

State may have received the higher sum after the period of 12 years and in 6

instalments. However, the statutory arrangement under the Fourth Proviso in

Section 38 of the Act does not amount to remission or cessation of the assessee's

liability. Thus, it was held that one of the requirements to Section 41(1)(a) of the

Act has not been fulfilled. The said decision applies in full force to the assessee's

case. Furthermore, we note that the Commissioner of Income Tax (Appeals) while

allowing the assessee's appeal by order dated 07.12.2009 followed the assessee's

own case for the assessment year 2004-05 as decided by the Tribunal as against

the said order, the Revenue filed an appeal before this Court in ITAT 234 of 2017

and though the present substantial question of law which is raised before us was

raised in that appeal, the Revenue did not press the said question and argue only

on two other questions; one with regard to computation of deduction under

Section 80HHC and the other relating to expenditure for laying down power

evacuation line to connect the assessee's plant to the grid belonging to the State

Electricity Board, whether would constitute Revenue expenditure or the capital

expenditure. The Hon'ble Division Bench by judgment dated 04.07.2018

dismissed the appeal filed by the Revenue and answered those two questions

against the Revenue. Thus, the substantial question of law raised before us in

this appeal has been already decided in favour of the respondent/assessee and

the said decision of the Tribunal has attained finality.

Thus, in the light of the above discussion, we find that the order passed by

the Tribunal does not call for any interference. Accordingly, the appeal fails and

the same is dismissed. The substantial question of law is answered against the

Revenue.

The application being IA No.GA 2 of 2017 (Old No. GA 1873 of 2017) also

stands dismissed.

(T. S. SIVAGNANAM, J.)

(HIRANMAY BHATTACHARYYA, J.)

s.pal/pkd