TaxTMI 
TaxTMI 
2019 (7) TMI 29
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....e Income Tax Appellate Tribunal, Chennai 'A' Bench dated 29.06.2007 and 29.07.2005 in I.T.A.No.3305/Mds/2004 & I.T.A.No.1865/Mds/2002 for the Assessment Years 1997-98 & 1998-99, I.T.A.No.1853/Mds/2002 & I.T.A.No.1885/Mds/2005 for the Assessment Years 1998-99 & 2003-04 and I.T.A.Nos.357, 358, 397 & 400/Mds/2000 for the Assessment Years 1996-97 & 1998-99 respectively. 2. Since the issues involved in all these Appeals are common and the appellant assessee is one and the same person, we have heard all these Appeals together. 3. For the sake of convenience, we have listed out the issues arising in each of the Appeals in a Tabulated Format as hereunder; 4. In the above Tabulated Statement, the issues arising in each of the Appeals have....
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....cide three issues jointly, since the common point to be decided is whether the provision made by the assessee for purchase tax, purchase tax on cane subsidy and wealth tax are not to be added while computing the book profits under Section 115JA of the Act. 9. Mr.M.P.Senthil Kumar, learned counsel for the assessee would contend that the purchase tax was payable on sugarcane purchased from the cane growers and as on the date of making provision for the purchase tax, the assessee is aware of the quantity of the sugarcane purchased and the liability of the purchase tax there on. This provision and the payment of purchase tax were made every year. Therefore, it is an ascertained liability. 10. So far as the cane subsidy is concerned, it is con....
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....ncy in the provision made as substantial amount of money, which was provided for in the previous year were returned back in the subsequent year, which clearly shows that no scientific method has been adopted. 13. So far as the wealth tax is concerned, it is submitted by Mr.T.Ravikumar, learned Senior Standing Counsel that the wealth tax liability accrues as on 31st March of every year and nothing prevented the assessee from effecting payment under adhoc method and the Assessing Officer, the Commissioner of Income Tax and the Tribunal were perfectly right in rejecting the plea raised by the assessee. 14. To decide this question, we shall first take note of the meaning of the word "provision". First, we should steer clear of what is a provi....
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....t scientific method or follow a scientific data to justify a provision. 16. As pointed out by Mr.T.Ravikumar, the Notification for payment of additional cane price etc., would not arise in the Assessment Years under consideration and only in the next year. In the absence of any data to show that scientific method was adopted, we are of the considered view that the provisions made by the assessee towards purchase tax, purchase tax on cane subsidy and wealth tax are to be treated as unascertained liability. Therefore, the factual finding recorded by two authorities and the Tribunal is fully justified. 17. So far as the wealth tax is concerned, the decision relied on by the assessee in the case of Shree Sajjan Mills Ltd supra was rightly dis....
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....hing but provision for diminution in the value of the asset, are specifically covered under Clause (g) of the said Explanation and the provision for gratuity could not be added to the book profits while computing the income of a Company under Section 115JA of the Act. Accordingly, it has held that the amendment thus goes directly against the assessee. 19. Applying the said decision, the assessee will be entitled for the relief for the Assessment Year 1997-98, which is the subject matter of T.C.A.No.1411 of 2008 and not entitled for the relief for the Assessment Year 1998-99, which is the subject matter of T.C.A.No.1412 of 2008. 20. In the light of the above, substantial question of law No.4 is answered in favour of the assessee in T.C.A.....
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.... contend that the Assessing Officer ought not to have disallowed the provisions at the time of processing return under Section 143(1)(a) of the Act, since the question whether there is a liability, is a debatable issue and therefore, the Assessing Officer had no jurisdiction in making prima facie disallowance and to levy penalty by way of additional Tax. 24. Thus, we have to decide whether there is a debatable issue on the said point at the relevant time when the intimation was issued under Section 143(1)(a) of the Act. As rightly pointed out by Mr.T.Ravikumar, learned Senior Standing Counsel for the Revenue that this cannot be considered as a debatable issue because of the law laid down by the Division Bench of this Court in the case of D....