PARIPOORNAN - (1.) LEAVE granted in all the special leave petitions.
(2.) THESE are all connected cases. The matter arises under the Companies (Profits) Surtax Act, 1964 (hereinafter referred to as the Act). The parties in all the appeals are the same. The appellant in the appeals is "The State Bank of Patiala" and the respondent is the "Commissioner of Income Tax, Patiala" The Civil Appeals filed from Special Leave Petitions (C) Nos. 2392-95 of 1993 are the main cases. They relate to four assessment years -1971-72,1972-73,1973-74 and 1975-76. The appellant-assessee set apart amounts as "reserve" for "bad and doubtful debts" in all the years. A claim was laid that such sums qualified as reserves for the purpose of Rule 1 (xi) (b) of the First Schedule and Rule 1 (iii) of the Second Schedule of the Act and such sums, representing reserves, should be included in the capital of the appellant for appropriate relief. The Income-tax Officer rejected the claim. In appeal, the Income-tax Appellate Tribunal allowed the plea of the assessee. The Income-tax Appellate Tribunal, by its detailed order dated 23-1-1980, upheld the plea of the assessee and held that the amounts set apart as reserves are entitled for appropriate relief under Rule 1 (xi) (b) of the First Schedule and Rule 1 (iii) of the Second Schedule of the Act. On motion by the Revenue the Appellate Tribunal referred the following questions of law for the decision of the High Court of Punjab and Haryana, which were numbered as Income-tax reference No. 235 to 238 of 1980 :- "i) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the amounts provided by the assessee for bad and doubtful debts in the balance sheets of the relevant previous years qualified as reserves for the purpose of clause xi (b) of Rule 1 of the First Schedule to the Companies (Profits) Surtax Act, 1964 and consequently allowing year-wise deduction as under:- JUDGEMENT_513_3_1996Html1.htm ii) Whether, on the facts and in the circumstances of the case, the appellate Tribunal was right in law in holding that the amounts of Rs. 10,53,576.00, Rs. 27,21,641.00, Rs. 29,91,641.00 and Rs. 47,16,641 provided for bad and doubtful debts as at the beginning of the relevant accounting year respectively for the assessment years 1971-72, 1972-73,1973-74 and 1975-76 qualified as reserve for inclusion in the capital of the assessee under Second Schedule to the Companies (Profits) Sur-tax, Act, 1964." (emphasis supplied) By a detailed judgment dated 27-7-1992 the High Court took the view that on the facts and circumstances of the present case, sums of money set apart by the assessee as reserves are really "provisions" and not "reserves" and so, such sums are not entitled to the relief granted by the Appellate Tribunal. It is, thereafter the assessee moved this Court by special leave petition Nos. 2392-95 of 1993 and obtained special leave in the four cases. The judgment of the High Court is reported as Commr. of Income-tax v. State Bank of Patiala, 203 ITR 150 : (1993 Tax LR 81). Special Leave Petitions (C) Nos. 27543-50 of 1995 relate to the same assessee and eight assessment years are involved therein- 1979-80 to 1987-88 except 1985-86. For those years, identical claim put forward by the appellant-assessee was rejected by the Income-tax Officer. In appeal, CIT allowed the claims. In the meanwhile, the decision of the High Court for the previous four years, i.e. 1971-72, 1972-73,1973-74 and 1975-76 had been rendered and so the Tribunal, following the decision of the High Court, held against the assessee. The plea of the assessee to refer the matter either to the appropriate High Court or to this Court was disallowed. The assessee has filed special leave petitions in this Court directly against the aforesaid order of the Appellate Tribunal. Special Leave Petition (C) No. 27551 of 1995, relating to the same assessee and involving consideration of the same question, relates to the assessment year 1985-86. The Appellate Tribunal finally decided against the assessee following the earlier decision of the High Court reported in 203 ITR 150 : (1993 Tax LR 81) (Punj. and Har). The attempt to get the matter referred to the High Court was unsuccessful and so the assessee filed the special leave petition in this Court against the order of the Appellate Tribunal.
(3.) ALL the 13 appeals involve consideration of the same question between the same parties. So, they were heard together and are disposed of by this common judgment. We heard counsel for the appellant-assessee, Mr. A. Subba Rao, and counsel for the respondent Revenue, Mr. B. S. Ahuja.;