Commissioner Of Income Tax-I v. Raymon Glues & Chemicals....opponent(S

O/TAXAP/670/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 670 of 2006 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ?the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ?to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ COMMISSIONER OF INCOME TAX-I....Appellant(s) Versus RAYMON GLUES & CHEMICALS....Opponent(s) ================================================================ Appearance: MR KM PARIKH, ADVOCATE for the Appellant(s) No. 1RULE SERVED for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERIandHONOURABLE MR.JUSTICE K.J.THAKER Date : 19/11/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE K.J.THAKER) 1.By way of this appeal the appellant-Revenue has challenged the judgment and order dated 11.10.2005 passed by the Income Tax Appellate Tribunal,Ahmedabad Bench “C” in ITA No. 1450/Ahd/1999 for AY 1995-96. 2.While admitting this appeal on 13.10.2006, this Court has framed the following substantial question of law: “Whether the Appellate Tribunal is right in law and on facts in holding that interest on fixed deposits is eligible for deduction u/s.80HHC of the Act ?” 3.The facts of the present case are that the assessee firm has filed return of income of 30.101995 declaring therein total income of Rs. 4,54,19,251/- and the copies of Trading and Manufacturing account, profit and loss account, balance-sheet etc. are filed along with return of income together with necessary tax audit report as required under the provisions of sec. 44AB of the Act. Thereafter, notice under sec. 143(2) and 142(1) of the IT Act has been issued to the assessee. After considering the material on record, the assessment order came to be passed by the Assessing Officer. Against the said order, an appeal before the CIT(A) has been preferred by the assessee which was partly allowed. Against the said order of CIT(A), an appeal before the ITAT has been preferred by the Revenue which has been partly allowed. Against the said order of ITAT, the Revenue has preferred the present Tax Appeal. 4.Heard the learned advocate appearing for the appellant-Revenue and considered the submissions. In para-6, the ITAT has observed as under: “6. After hearing both the parties, it has been noticed that CIT(A) has followed his predecessor’s order for Asstt. Year 1985-86 to 1994-95 in both the matter. Regarding the first ground, the observation of ITAT in ITA No. 5428/Ahd/1994 are reproduced as below: “On the facts and in the circumstance of the case and in law the Ld. CIT(A) erred in deleting the disallowance of interest payment of Rs. 1,04,750/- which was u/s. 40A(2) of the Act.” As regards ground no. (i), the ld. CIT(A) has deleted the addition O/TAXAP/670/2006 JUDGMENT following his order for Asstt. Year 1989-90. It was the common “6. After hearing both the parties, it has been noticed that CIT(A) has followed his predecessor’s order for Asstt. Year 1985-86 to 1994-95 in both the matter. Regarding the first ground, the observation of ITAT in ITA No. 5428/Ahd/1994 are reproduced as below: “On the facts and in the circumstance of the case and in law the Ld. CIT(A) erred in deleting the disallowance of interest payment of Rs. 1,04,750/- which was u/s. 40A(2) of the Act.” As regards ground no. (i), the ld. CIT(A) has deleted the addition O/TAXAP/670/2006 JUDGMENT following his order for Asstt. Year 1989-90. It was the common contention of the parties that the issue is covered in favour of the assessee by the aforesaid decision of the Tribunal for Asstt. Year 1985-86 to 1989-90. The Tribunal has dealt with this issue at length vide paras- 5 to 10 of its order dated 30.10.2001 (supra) and has decided the same in favour of the assessee. We,therefore,respectfully following the said order, uphold the order of the CIT(A) on this issue and reject the ground raised by the Revenue.” 5.The provisions of Sec. 80HHC of the Act has been rightly interpreted by the Tribunal as well as CIT(A). We do not find any merit in this appeal and the question of law has been answered by various Benches against the Revenue and in favour of the assessee. In that view of the matter, the question is answered in favour of the assessee and against the revenue. The present appeal is dismissed. (K.S.JHAVERI, J.) (K.J.THAKER, J)