The judgment of the court was delivered by
K. S. Jhaveri J.- By way of this appeal, the appellant-Revenue has challenged the order dated August 7, 2000, passed by the Income-tax Appellate Tribunal, Ahmedabad Bench "C" in I. T. A. No. 4535/Ahd/1992 for the assessment year 1989-90.
2. 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 Income-tax Act ?"
3. The brief facts of the present case are that the return of income was filed on September 29, 1989, showing the total loss of Rs. 90,15,050 along with copies of audited accounts tax audit report and Form No. 3CD. A revised return was filed on December 31, 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 Commissioner of Income-tax, Gujarat I, Ahmedabad, has accorded necessary approval to the gratuity fund, the assessee has revised the return excluding the gratuity provision. Therefore, vide notice under section 142(1) dated August 22, 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 the balance-sheet of Ahmedabad Advance Mills Ltd., and (iv) copy of the ledger extract of amalgamation account and capital reserve account. Thereafter, again, vide notice dated February 21, 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 Commissioner of Income-tax (Appeals), Ahmedabad, which has been partly allowed. Against the said order of the Commissioner of Income-tax (Appeals), the Revenue has preferred an appeal before the Tribunal which was partly allowed, against which the present tax appeal is preferred by the Revenue.
4. Mr. S. N. Shelat learned senior advocate appearing for Nanavati and Nanavati, has submitted that in view of the decision in the case of Polyflex (India) Pvt. Ltd. v. CIT reported in [2002] 257 ITR 343 (SC), 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 CIT v. Bharat Iron and Steel Industries reported in [1993] 199 ITR 67 (Guj) [FB] 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.