2021 (4) TMI 871 - HC - Income Tax

High Court Upholds ITAT Order for AY 2008-2009 in Favor of Assessee

The High Court upheld the ITAT order for the assessment year 2008-2009 in favor of the assessee. The deletions made to disallowances related to provision ... Provision made for post-retirement medical expenses by the assessee - HELD THAT:- It is not in dispute that the Tribunal, based on its own decision in assessment year 2009-2010, decided the same in favour of the assessee. Tribunal notes that via its decision for assessment year 2009-2010, it concluded that the post-retirement medical scheme provision created a definite liability. In this behalf, Accounting Standard [AS] 15 issued by the ICAI is taken note of. We are informed by Mr. Ajit Sharma, learned senior standing counsel, who appears for the revenue that the revenue did carry the aspects referred to in paragraph 2 above in appeal to this Court in an earlier round with respect to the aforementioned aspects. As the provision for postretirement medical expenses was concerned, this Court [2018 (9) TMI 2021 - DELHI HIGH COURT]has ruled that no substantial question of law arose vis-a-vis the said aspect. Interest income, which is sought to be taxed in the hands of the assessee, although, the same has already been offered to tax by various cooperative societies - HELD THAT:- Tribunal, in paragraph 8 of the impugned order, has noted that the assessing officer made inquiries with the concerned cooperative societies and found that they had offered to tax, interest, which accrued to them In view of this finding of fact, in our view, the same income [i.e., interest] cannot be taxed in the hands of the assessee.Accordingly, we are of the view that insofar as the third aspect is concerned, no substantial question of law arises. Appeal admitted on second aspect - Whether the Tribunal misdirected itself in law and on facts in deleting from the taxable income of the assessee interest which accrued to Cooperative Electrical Supply Society Ltd., Siricilla? Issues involved:Revenue's appeal against ITAT order on assessment year 2008-2009 - Deletions made to disallowances - Provision for post-retirement medical expenses - Interest income of Cooperative Electrical Supply Society Ltd, Siricilla - Taxation of interest income in hands of assessee.Analysis:The High Court heard the revenue's appeal against the ITAT order concerning assessment year 2008-2009. The revenue sought to challenge the deletions made to disallowances related to provision for post-retirement medical expenses and interest income of a cooperative society. Regarding the provision for post-retirement medical expenses, the Tribunal decided in favor of the assessee based on its previous decision for assessment year 2009-2010, noting that the provision created a definite liability as per Accounting Standard 15 issued by the ICAI. The revenue had previously appealed to the High Court on this issue, but it was ruled that no substantial question of law arose.In relation to the interest income of the Cooperative Electrical Supply Society Ltd, Siricilla, the assessing officer found that the society had already offered the interest income to tax. The Tribunal concluded that the same income cannot be taxed in the hands of the assessee based on this factual finding. Therefore, the High Court determined that no substantial question of law arose concerning this aspect. Consequently, the only issue left for consideration was the second aspect, i.e., the interest income of the cooperative society.The High Court admitted the appeal specifically on the second aspect and framed a question of law regarding whether the Tribunal misdirected itself in law and on facts by deleting the interest income accrued to the cooperative society from the taxable income of the assessee. The matter was listed in the regular category based on seniority, and the parties were directed to file the case record with the Court's Registry.