Commissioner of Income Tax-2 vs Bombay Dyeing and Manufacturing Company Ltd.

We have heard Mr. Suresh Kumar, learned counsel appearing for the revenue and Mr. Jasani, learned counsel appearing for the assessee.

The revenue is in appeal against the order dated 12th October, 2012 of the Mumbai Bench of the Income Tax Appellate Tribunal. The Bench decided the Income Tax Appeals for the assessment year 1993-94 of the assessee as also of the revenue. Mr. Suresh Kumar brought to our notice that this appeal raises three substantial question of law and which are formulated at page 3 and 4 of the paperbook.

Both sides have brought to our notice, the order passed by this Court on 18th March, 2013 in Income Tax Appeal (Lodging) No. 196 of 2013. Question No.A as it is termed as substantial question of law was also the subject matter of that appeal. The assessee is same. The substantial question of law (b) which is dealt with by the order dated 18th March, 2013 and present substantial question No.A at page 3 are identical. Similarly, question No.B of the present appeal paperbook at page 3 and 4 is stated to be the same as question (g) in Income Tax Appeal (Lodging) No. 196 of 2013.

It is therefore conceded that the order passed by the Division Bench of this Court on 18th March, 2013 and which is accepted by the revenue, concludes the issues. The questions are answered in the said order against the revenue. In such circumstances, following our Court''s order dated 18th March, 2013 we dismiss this appeal insofar as these questions are concerned.

Then, Mr. Suresh Kumar states that question No.C of paragraph 4 and formulated at page 4 of the paperbook is dealt with by the tribunal. There, the assessee as also the revenue raised this question and our attention was invited to the Tribunal''s order particularly paragraph 20 to 25 thereof.

The assessee company is a manufacturer of textile fabrics. It is involved in importing various textile machineries and equipments, inter alia against loans in foreign currency which are to be paid to the foreign suppliers in future by installments. Against those loan installments payable to them, the assessee company entered into forward contracts with authorised dealers like State Bank of India and as per the Reserve Bank of India guidelines which cover the foreign exchange components to guard against the fluctuation in the rate of foreign exchange. On cancellation of such contracts, which are also according to the assessee, in accordance with the guidelines of the Reserve Bank of India, the assessee made a gain of Rs.1285.30 lakhs. This gain was claimed by the assessee company as a capital receipt not liable to tax. The Assessing Officer called for explanation and particularly as to why the gains should not be reduced from the capital cost of the assets. However, not satisfied with the explanation of the assessee, the Assessing Officer had not allowed the deduction. The matter was carried before the Commissioner. In appeal, the Commissioner upheld the order of the Assessing Officer, that is, how the assessee approached the tribunal. Before the tribunal, the assessee relied upon its Special Bench decision in the case of Apollo Tyres Ltd. Vs. the Assistant Commissioner of Income Tax delivered at New Delhi. The details of the said decision and the relevant paragraphs thereof have been reproduced in the tribunal''s order at paragraph 24, running pages 187 and 188. It is conceded before us that the facts and circumstances in the case of Apollo Tyres Ltd. and the present assessee are identical. The revenue concession is also in writing and that is to the effect that the revenue has not challenged the Special Bench decision. We are mindful of the fact that it is ultimately for the Court to consider and decide the legal questions. Any opinion of the revenue officials can never bind the Court. Equally, no tribunal''s decision can ever bind this Court. However, when such concession is coming from the revenue and it terms that the Special Bench decision of the tribunal is covering the question, then, it is clear that the revenue does not wish to challenge or question the correctness of the conclusions rendered by the tribunal in M/s. Apollo Tyres'' case. The Special Bench decision applies to atleast the facts and circumstances of the case of the present assessee. Therefore, whether that decision lays down the correct principle of law or not will be decided in an appropriate case, leaving that question and issue open, we conclude that even question No.C at page 4 of the paperbook is not substantial question of law. The appeal is therefore, devoid of merits and is dismissed.