Calcutta High Court
Principal Commissioner Of Income ... vs Hindustan Gum And Chemicals Ltd on 13 January, 2021
Serial No. OD - 10
HIGH COURT AT CALCUTTA
(ORIGINAL SIDE)
ITAT/40/2020
IA NO.GA/1/2020 (OLD NO.GA/1196/2020)
GA/2/2020(OLD NO.GA/1197/2020)
(Through Video Conferencing)
PRINCIPAL COMMISSIONER OF INCOME TAX-4, KOLKATA
....Appellant(s)
Through: Mr. P.K. Bhowmick with Mr.
Ashok Bhowmick, Advocates
v/s
HINDUSTAN GUM AND CHEMICALS LTD.
. ....Respondent(s)
Through: Mr. J.P. Khaitan, Senior
Advocate (VC) with Mr. Sanjay
Bhaumik, Ms. Swapna Das, Mr.
Siddhertho Das, Advocates
Coram : HON'BLE MR. JUSTICE RAJESH BINDAL, JUDGE
HON'BLE MR. JUSTICE ANIRUDDHA ROY, JUDGE
ORDER
1. Challenging the order passed by the Income Tax Appellate
Tribunal passed in ITA No. 891/Kol/2017 for assessment year 2012-13
dated 31.05.2018, the present appeal has been filed in this Court.
2. The appeal is accompanied by an application seeking
condonation of delay of 497 days in filing thereof. The following substantial
questions of law were sought to be raised :-
2 ITAT/40/2020
(i) Whether on the facts and circumstances of the case the
Learned Income Tax Appellate Tribunal is justified in
law in not considering the CBDT Instruction No. 3/2010
dated 23rd March, 2010 which stipulates that notional loss
of Foreign Exchange derivative is not to be allowed to be
deducted from total income but to be added back to the
total income, while the Learned Tribunal allowed reliefs
to the assessee company on account of Marked to Market
loss ?
(ii) Whether on the facts and circumstances of the case the
Learned Income Tax Appellate Tribunal has erred in law
in deleting the additions made by the Assessing Officer
on the question of Marked to Market loss in
contravention to the provision of section 37(1) of the
Income Tax Act, 1961 which stipulates that
capital/speculation expenditure is not an allowable
expenditure for deduction ?
(iii) Whether on the facts and circumstances of the case the
Learned Income Tax Appellate Tribunal justified in law
in allowing relief to the assessee company on account of
additional depreciation without considering the third
proviso to section 32(1)(ii) which came into effect on 1st
April, 2016 by virtue of the Finance Act, 2016 without
retrospective effect ?
(iv) Whether on the facts and circumstances of the case the
Learned Income Tax Appellate Tribunal is justified in
law in properly not applying the test of application of
3 ITAT/40/2020
Third proviso of the section 32(1)(ii) of the Income Tax
Act, 1961 ?
3. At the very outset learned Counsel for the Revenue submitted
that question Nos. 1 and 2 were decided against the Revenue by the Income
Tax Appellate Tribunal (for short 'the Tribunal') vide order dated 14th
February, 2018, passed in I.T.A. No. 1410 (Kol) of 2016 and 1601 (Kol) of
2016 for the Assessment Year 2010-11.
4. In ITAT 320 of 2018 filed in this Court, order dated 14th
February, 2018, passed by the Tribunal, was challenged. The aforesaid
appeal was admitted only for issues pertaining to interpretation of Section
14A of the Income Tax Act, 1961 read with Rule 8D(2)(ii) of the Income
Tax Rules, whereas the aforesaid two questions at Sr.Nos (i) & (ii), were not
entertained considering the fact that the Tribunal had followed its earlier
order passed in the case of assessee for the earlier assessment year, which
had attained finality, keeping in view of the judgments of the Hon'ble
Supreme Court in the case of CIT vs. Woodward Governor India (P) Ltd.
(312 ITR 254) and ONGC vs. CIT (322 ITR 180)
5. If aforesaid questions of law are not entertained, the learned
Counsel for Revenue fairly submits that tax effect relating to question Nos. 3
and 4 would be less than Rs.1 crore. In view of the circular No.17/2019
F.No.279/Misc.142/2007-ITJ(Pt.) dated August 8, 2019 issued by
Government of India, Ministry of Finance, Department of Revenue, Central
Board of Direct Taxes Judicial Section, whereby the monetary limit for
filing appeals before the High Court has been increased to ₹1 crore and the
tax effect in the present being less than that, he may be permitted to
withdraw the present appeal.
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6. The prayer made by learned counsel for the revenue is allowed,
however, keeping the legal issue open.
KOLKATA (ANIRUDDHA ROY) (RAJESH BINDAL)
13.01.2021 JUDGE JUDGE
GH/S.Das.
