COMMISSIONER OF INCOME-TAX VS DHIRAJ KUMAR & CO.
1999 P T D 1587
[226 I T R 443]
[Madhya Pradesh High Court (India)]
Before A.R. Tiwari and S. B. Sakrikar, JJ
COMMISSIONER OF INCOME-TAX
Versus
DHIRAJ KUMAR & CO.
Miscellaneous Civil Case No.655 of 1992, decided on 03/01/1996.
Income-tax--
----Business expenditure---Deduction only on actual payment---Insertion of first proviso to S.43-B w.e.f. 1-4-1988---Is declaratory of pre-existing law and is procedural in nature---Does not affect vested rights---Amended provisions of S.43-B applicable to assessment year 1984-85---Indian Income Tax Act, 1961, S.43-B.
The first proviso to section 43-B of the Income Tax Act, 1961, is declaratory of pre-existing section 43-B, effective from April 1, 1984, and does not affect vested rights. It is explanatory of the provisions and is procedural in nature. Therefore, the amended provisions of section 43-B are applicable to the assessment year 1984-85 though the said amendment was effective from April 1, 1988.
CIT v. Bhandari Capacitors (Pvt.) Ltd. (1987) 168 ITR 647 (MP); CIT v. Chandulal Venichand (1994) 209 ITR 7 (Guj.) and CIT v. Polar Fan Industries Ltd. (1992) 197 ITR 718 (Cal.) ref.
D.D. Vyas for the Commissioner
JUDGMENT
A.R. TIWARI, J.---The Commissioner of Income-tax, Bhopal, has filed this application under section 256(2) of the Income Tax Act, 1961 (for short the "Act"), seeking a direction to the Income-tax Appellate Tribunal, Indore, to state the case and refer the undernoted question of law as proposed, arising out of the order; dated July 12, 1991, passed in I.T.A. No .99/Ind. of 1990, for our opinion:
"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in holding that the amended provisions of section 43-B were applicable to the assessment year 1985-86 when the said amendment was effective from April 1, 1988?"
The non-applicant assessee derived income from adat in oil-seeds, etc., as also from the business on own account. It filed the return. In response to the notice under section 143(2) of the Income-tax Act, the assessee produced the account books and filed the, details and submitted explanations. The order of assessment for the assessment year 1985-86 was passed under section 143(3)/143(2)(a). The assessee filed Appeal No.IT-218/ 88-89/383 before the Commissioner of Income-tax (Appeals). The appeal was allowed in part. The assessee then filed a second appeal against the part of the order rejecting the contentions of the assessee. That appeal was registered as I.T.A. No.99/Ind. of 1990. The appeal was dismissed on July 12,. 1991. Aggrieved, the applicant filed an application under section 256(1 ) of the Act which was registered as R.A. No.354/Ind. of 1991. That application was rejected on July 15, 1992. Thereafter, the applicant has filed this application under section 256(2) of the Act.
We have heard Shri D.D. Vyas, learned counsel for the applicant
The Tribunal rejected the application under section 256(1) of the Act on the conclusion that the question is not a referable question of law for the reasons stated in its order, dated February 17, 1992, in R.A. No. 157/Ind.,of 1991, arising out of I.T.A. No. l 151/Ind. of 1988 in the case of Mantri Bros. v. ITO.
The Tribunal found that the provision of section 43-B was amended with effect from April 1, 1988, and that the assessment year in question was 1985-86. The Tribunal, however., found that the amended provision was applicable to the assessment year 1985-86. Counsel for the applicant was unable to show that the amended provision was not retrospective in operation. CIT v. Polar Fan Industries Ltd. (1992) 197 ITR 718 (Cal) and CIT v. Chandulal Venichand (1994) 209 ITR 7 (Guj) clinch and conclude the point.
So far as the question of subsidy is concerned, the point stands concluded by the judgment in CIT v. Bhandari Capacitors (Pvt.) Ltd. (1987) 168 ITR 647 (MP).
In view of the facts and circumstances of the case, we are not satisfied that the question as proposed is a question of law required to be answered by us.
In the result, we reject the application, but without any order as to costs
M.B.A./1999/FCApplication rejected