Dy. C.I.T. (Asstt.) vs Ahmedabad Advance Mills Ltd.

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K.S. Jhaveri, J.—By way of this appeal, the appellant-Revenue has challenged the order dated 7.8.2000 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench ''C'' in ITA No. 4535/Ahd/1992 for A.Y. 1989-90.

While admitting the appeal, this Court has framed the following substantial question of law:

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal has substantially erred in law in deleting addition of Rs. 65,42,000/- being the excise duty refund received by the assessee under section 41(1) of I.T. Act?"

The brief facts of the present case are that the return of income was filed on 29th September, 1989 showing total loss of Rs. 90,15,050/- along with copies of audited a/cs Tax Audit Report and form No. 3Cd. A revised return was filed on 31.12.1990 enhancing its loss at Rs. 1,05,52,120/-. In the statement filed along with the revised return, the assessee has stated that in the original return, the assessee had disallowed provisions for gratuity of Rs. 15,37,069/-. Since the CIT, Gujarat-I, Ahmedabad has accorded necessary approval to the gratuity fund, the assessee has revised the return excluding the gratuity provision. Therefore, vide notice u/s. 142(1) dated 22.8.1990 the assessee was requested to furnish (i) copy of the agreement for having taken over of textile division of Ahmedabad Advance Mills Ltd. (ii) copies of resolution mentioned in Note 3, (iii) copy of balance-sheet of Ahmedabad Advance Mills Ltd., (iv) copy of ledger extract of amalgamation a/c and capital reserve a/c. Thereafter, again vide notice dated 21.2.1992, the assessee was requested to furnish the above mentioned details. But the details have not been filed by the assessee. Therefore, the assessment order came to be passed. Against the said assessment order, the assessee has preferred an appeal before the CIT(A), Ahmedabad which has been partly allowed. Against the said order of CIT(A), the Revenue has preferred an appeal before the Tribunal which was partly allowed, against which the present Tax Appeal is preferred by the Revenue.

Mr. S.N. Shelat learned Senior Advocate appearing for Nanavati & Nanavati has submitted that in view of the decision in the case of Polyflex (India) Pvt. Ltd. Vs. Commissioner of Income Tax, Karnataka, , wherein, the Hon''ble Supreme Court has held that the refund of excise duty has to be treated as deemed profit. In that view of the matter, it is contended that the question is covered by the said decision. Mr. Shelat learned Senior advocate has further contended that in view of the above decision of the Hon''ble Supreme Court, the judgment which is sought to be relied upon by the Tribunal in the case of Commissioner of Income Tax Vs. Bharat Iron and Steel Industries, is reversed. In that view of the matter, the other questions which were posed before the Tribunal are not answered, and therefore, the matter is required to be remanded to the Tribunal. The question raised in this appeal is answered in favour of department and against the assessee. The matter is remanded back to the Tribunal to decide other questions which are not decided by the Tribunal. The appeal is allowed to the aforesaid extent.