2000 (2) TMI 15 - SC - Income Tax

Supreme Court allows deduction claim for 1986-87, reversing tribunal decision. Appellant wins Rs. 1,40,86,821 deduction.

The Supreme Court allowed the appellant's deduction claim under section 43B for the assessment year 1986-87. The deduction disallowed by the Income-tax ... Allowability of deduction under section 43B - allocation of deduction between assessment years - giving effect to appellate tribunal's order - exercise of powers under Article 142 of the ConstitutionAllowability of deduction under section 43B - Deduction claimed of Rs. 1,40,86,821 under section 43B is allowable for assessment year 1986-87. - HELD THAT: - The Court, applying its decision in Allied Motors (P.) Ltd. v. CIT, held that the sum of Rs. 1,40,86,821 claimed under section 43B must be allowed as a deduction in respect of assessment year 1986-87. The reference was answered in favour of the appellant on this point, thereby permitting the deduction for the stated year as originally claimed before the Income-tax Officer.Deduction of Rs. 1,40,86,821 under section 43B allowed in assessment year 1986-87.Giving effect to appellate tribunal's order - exercise of powers under Article 142 of the Constitution - allocation of deduction between assessment years - Direction that, when giving effect to the Tribunal's order for assessment year 1987-88, the Assessing Officer shall disallow the deduction of Rs. 1,40,86,821 and allow the deduction of Rs. 1,25,30,853 so that the former amount is allowed in 1986-87. - HELD THAT: - Having received an affidavit from the appellant proposing to request withdrawal of the deduction of Rs. 1,40,86,821 from assessment year 1987-88 and to have it allowed in 1986-87, the Court exercised its powers under Article 142 to issue a consequential direction. The Assessing Officer, while giving effect to the Tribunal's order in 1987-88 permitting a deduction of Rs. 1,25,30,853, was directed to disallow the earlier-allowed deduction of Rs. 1,40,86,821 for 1987-88 so as to effectuate the allocation of that deduction to 1986-87.AO to disallow the deduction of Rs. 1,40,86,821 in assessment year 1987-88 and allow Rs. 1,25,30,853 in that year, thereby ensuring the Rs. 1,40,86,821 is allowed in 1986-87.Final Conclusion: The tax reference is answered in favour of the appellant: the deduction of Rs. 1,40,86,821 under section 43B is allowed in assessment year 1986-87, and the Court, under Article 142, directed consequential adjustment when giving effect to the Tribunal's order for assessment year 1987-88; no costs. The Supreme Court allowed the deduction claimed by the appellant under section 43B for the assessment year 1986-87. The deduction disallowed by the Income-tax Officer for 1986-87 was allowed by the Income-tax Appellate Tribunal for 1987-88. The appellant will request the Assessing Officer to withdraw the deduction for 1987-88 and allow it for 1986-87. The deduction of Rs. 1,40,86,821 will be allowed in 1986-87 and not in 1987-88. The question of law was answered in favor of the appellant with no costs.