The Commissioner of Income Tax, New Delhi Vs. Maruti Udyog Ltd. - Court Judgment

Excerpt:
- constitution of india. article 14: [dr. arijit pasayat &p. sathasivam, jj] legitimate expectation held, the decision maker has the choice in the balancing of the pros and cons relevant to the change in policy. it is, therefore, clear that the choice of policy is for the decision maker and not the court. the legitimate substantive expectation merely permits the court to find out if the change of policy which is the cause for defeating the legitimate expectation is irrational or perverse or one which no reasonable person could have made. a claim based on merely legitimate expectation without anything more cannot ipso facto give a right. its uniqueness lies in the fact that it covers the entire span of time, present, past and future. how significant is the statement that today is tomorrows yesterday. the present is as we experience it, the past is a present memory and future is a present expectation. for legal purposes, expectation is not same as anticipation. legitimacy of an expectation can be inferred only if it is founded on the sanction of law. indian evidence act,1872[c.a.no.1/1872] section 115: [dr. arijit pasayat & p. sathasivam, jj] promissory estoppel/legitimate expectation alleged assurance by state government for purchase of 500 sets of compilation of local laws from publisher refusal to place any order petition seeking direction to maintain and keep promise claim based on departmental note to which concurrence of various departments/ministries not obtained there was interpolation of document and also dispute as to whether intended purchase was of volumes or sets - held, some oral expression of desire by the then law minister, would not be relevant. on facts, doctrine of promissory estoppel and legitimate expectation is not attracted. section 115: [dr. arijit pasayat & p. sathasivam, jj] promissory estoppel held, in order to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine and bald expression without any supporting material to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the government would not be sufficient to press into aid the doctrine. the courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever be present in the mind of the court. - reported in [2009] 312 itr 254 (sc). similarly, the question as to whether interest and miscellaneous income is taxable under the head 'income from other sources' under section 56 of the income tax act, 1961 is not required to be examined in this case as the department failed to make submissions on this point before the tribunal.order1. by consent, the matter is taken up and disposed of.2. delay condoned.3. leave granted.4. though the high court has admitted the appeal and though it has framed questions of law, it is the grievance of the department that the following questions have also arisen for determination by the high court and they have not been formulated for decision under section 260a of the income tax act, 1961. the said questions are as follows:(i) whether the tribunal was right in law in holding that unutilized modvat credit of earlier years adjusted in the assessment year in question should be treated as actual payment of excise duty under section 43b of the income tax act, 1961.(ii) whether the tribunal was right in law in holding that customs duty paid and allowed as a deduction under section 43b cannot be added to the value of the closing stock.5. to this extent, the department succeeds and accordingly we direct the high court to decide the above questions under section 260a in the income tax appeal pending before it (ita 1683 of 2006).6. before concluding, we may state that the tribunal was right in holding that the claim for depreciation on account of enhanced cost of depreciation due to fluctuation in foreign exchange rate was admissible for deduction under section 37 of the income tax act, 1961 (see our judgment in cit v. woodward governor india p. ltd. reported in : [2009] 312 itr 254 (sc). similarly, the question as to whether interest and miscellaneous income is taxable under the head 'income from other sources' under section 56 of the income tax act, 1961 is not required to be examined in this case as the department failed to make submissions on this point before the tribunal.7. accordingly, the civil appeal is allowed with no order as to costs.

Judgment:
ORDER

1. By consent, the matter is taken up and disposed of.

2. Delay condoned.

3. Leave granted.

4. Though the High Court has admitted the appeal and though it has framed questions of law, it is the grievance of the Department that the following questions have also arisen for determination by the High Court and they have not been formulated for decision under Section 260A of the Income Tax Act, 1961. The said questions are as follows:

(i) Whether the Tribunal was right in law in holding that unutilized MODVAT credit of earlier years adjusted in the assessment year in question should be treated as actual payment of excise duty under Section 43B of the Income Tax Act, 1961.

(ii) Whether the Tribunal was right in law in holding that customs duty paid and allowed as a deduction under Section 43B cannot be added to the value of the closing stock.

5. To this extent, the Department succeeds and accordingly we direct the High Court to decide the above questions under Section 260A in the Income Tax Appeal pending before it (ITA 1683 of 2006).

6. Before concluding, we may state that the Tribunal was right in holding that the claim for depreciation on account of enhanced cost of depreciation due to fluctuation in foreign exchange rate was admissible for deduction under Section 37 of the Income Tax Act, 1961 (see our judgment in CIT v. Woodward Governor India P. Ltd. reported in : [2009] 312 ITR 254 (SC). Similarly, the question as to whether interest and miscellaneous income is taxable under the head 'Income from Other Sources' under Section 56 of the Income Tax Act, 1961 is not required to be examined in this case as the Department failed to make submissions on this point before the Tribunal.

7. Accordingly, the civil appeal is allowed with no order as to costs.