Nobel Biocare India Pvt. Ltd Vs ACIT (ITAT Mumbai)
Double taxation avoided – Reversal of provision cannot be taxed again; Appellate authority can allow claim without revised return – ITAT Mumbai
In Nobel Biocare India Pvt. Ltd. vs ACIT (A.Ys. 2013-14 & 2020-21), the key dispute for A.Y. 2013-14 concerned taxation of income arising from reversal of provisions for obsolete inventory and sales returns. The assessee had reversed the provisions and offered the amount to tax, but the same provisions were later disallowed in A.Y. 2012-13, resulting in taxation twice.
The ITAT held that once the provision was disallowed and taxed in the earlier year, the reversal in the subsequent year cannot again be taxed, as there is no estoppel against law and tax can be collected only in accordance with Article 265 of the Constitution. The Tribunal also clarified that appellate authorities can entertain legitimate claims even without a revised return, following decisions like Pruthvi Brokers & Shareholders. Accordingly, CIT(A)’s order was set aside and AO was directed to allow withdrawal of income offered on reversal, preventing double taxation.
For A.Y. 2020-21, the ITAT noted that CIT(A) had dismissed the appeal solely on limitation without granting adequate opportunity. Considering principles of natural justice, the Tribunal restored the matter for proper adjudication of issues including bonus disallowance u/s 43B and related interest levies. The assessee’s appeals were allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
