ITR/34/1998 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 34 of 1998 For Approval and Signature: HONOURABLE MR. JUSTICE D.A.MEHTA HONOURABLE MR. JUSTICE Z.K.SAIYED 1. Whether Reporters of Local Papers may be allowed to see the judgment ? 2. To be referred to the Reporter or not ? 3. Whether Their Lordships wish to see the fair copy of the Judgment ? 4. Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5. Whether it is to be circulated to the Civil Judge ? ========================================================= COMMISSIONER OF INCOME-TAX - Applicant(s) Versus SYNBIOTOCS LIMITED - Respondent(s) ========================================================= Appearance : MR MANISH R BHATT for Applicant(s) : 1, MR RK PATEL for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MR.JUSTICE Z.K.SAIYED Date : 16/04/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA) ITR/34/1998 2/4 JUDGMENT 1. The statement of case forwarded by the Income- Tax Appellate Tribunal, Ahmedabad Bench “C”, is a consolidated statement in relation to two Reference Applications filed by the Revenue and two Reference Applications filed by the assessee, all the Reference Applications relating to Assessment Year 1982-83. The Tribunal has only referred the questions at the instance of the assessee while rejecting the said Reference Applications of the Revenue. 2. Heard the learned Advocates appearing for the respective parties. It is a common ground between the parties that the referred questions stand concluded by decisions rendered by this High Court. Hence, it is not necessary to set out facts and contentions in detail. 3. Following two questions have been referred in Reference Application No.626/Ahd/1987 : 1. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in rejecting the assessee's claim for liability of Rs.2,26,76,217/- arising under the provisions of Drugs (Price Control) Order, 1979, on the ground that the addition of Rs.2,26,76,217/- being notional income was not upheld by the Tribunal and ultimately if and when the revenue challenged the said deletion the assessee's claim for liability would become ITR/34/1998 3/4 JUDGMENT alive ? 2. Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that interest u/s.215 of the Act was rightly charged even when the assessee could not anticipate the addition of notional income as also the disallowance of statutory liability arising under the drugs (Price Control Order, 1979”? 4. In relation to question No.1, in assessee's own case for immediately preceding assessment year, namely, Assessment Year 1981-82, this Court has upheld the order of the Tribunal in relation to identical Issue vide Judgment rendered on 23.8.2006 in the case of SYNBIOTICS LTD. V/s. COMMISSIONER OF INCOME-TAX, reported in (2007) 288 ITR 572 (Guj), while answering question No.3 in the said Reference. Hence, for the same reasons question No.1 is answered in the affirmative i.e. in favour of Revenue and against the assessee. 5. In so far as Question No.2 is concerned the Issue stands concluded by a decision of this Court in the case of SARABHAI CHEMICALS PVT. LTD. V/s. COMMISSIONER OF INCOME-TAX, reported in (2002) 257 ITR 355, wherein it has been held that the Tribunal was not justified in holding that the interest under Section 215 of the Act was not chargeable. Hence, for ITR/34/1998 4/4 JUDGMENT the same reasons Question No.2 herein is answered in the affirmative i.e. in favour of the Revenue and against the assessee. 6. The Tribunal has referred the following question in Reference Application No.627/Ahd/87 : “Whether in the facts and in the circumstances of the case, the Tribunal was right in law in holding that the amount of Rs.86,682/- as guarantee commission was on capital account and disallowable as such ?” 7. In relation to this question in assessee's own case for Assessment Year 1981-82 this High Court has vide Judgment, rendered on 23.8.2006, in the case of SYNBIOTICS LTD. (supra), reported in (2007) 288 ITR 572, while answering question No.1, reversed the view of the Tribunal. Hence, the aforesaid question is answered in the negative i.e. in favour of the assessee and against the Revenue. 8. The Reference stands disposed of accordingly. There shall be no order as to costs. (D.A.MEHTA, J.) (Z.K.SAIYED,J.) sas