COMMISSIONER OF INCOME TAX Vs. STERIPLATE (P) LTD

JUDGEMENT

(1.) This order shall dispose of I. T. A. Nos. 931 of 2008, 516 and 517 of 2010 as learned counsel for the parties are agreed that the issue raised in all the three appeals is identical and relates to the interpretation of Explanation 1 to section 115JB(2) of the Income-tax Act, 1961 (in short ''the Act''). For brevity, the facts are being taken from I. T. A. No. 931 of 2008.

(2.) This appeal has been preferred by the Revenue under section 260A of the Act against the order dated March 27, 2008, passed by the Income-tax Appellate Tribunal, Delhi Bench ''C'', New Delhi (hereinafter referred to as ''the Tribunal'') in I. T, A. No. 2470/Del/2007, relating to the assessment year 2002-03, claiming the following substantial question of law :

(3.) Briefly stated, the facts necessary for adjudication as narrated in the appeal are that the assessee filed its return for the assessment year 2002-03 on October 31, 2002, declaring nil income and also computed nil book profit for the purposes of section 115JB of the Act. The Assessing Officer, vide order dated February 17, 2005, recomputed the book profit at Rs. 54,30,985 by making an adjustment for provision for diminution in value of investment at Rs. 91,80,973. The Assessing Officer held that the provision so made by the assessee fell under clause (c) of Explanation 1 to section 115JB(2) of the Act. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) (in short ''the CIT(A)'') who, vide order dated March 12, 2007, deleted the adjustment of Rs. 91,80,973 made by the Assessing Officer to the book profit under section 115JB of the Act holding that the provision for diminution in value of investments is not a provision for liability, much less a provision for unascertained liability. The said provision does not fall within the purview of clause (c) of Explanation 1 to section 115JB(2) of the Act. Dissatisfied with that order, the Department filed an appeal before the Tribunal. The Tribunal, vide order dated March 27, 2008, upheld the order of the Commissioner of Income-tax (Appeals) in deleting the adjustment of Rs. 91,80,973 made by the Assessing Officer and dismissed the appeal. Feeling aggrieved, the Revenue has approached this court by way of the instant appeal.