Commissioner Of Income Tax, Jaipur-I, Jaipur v. M/S. Foils India Laminates P. Ltd., Jaipur

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANJAIPUR BENCH, JAIPUR D.B. INCOME TAX APPEAL NO. 132/2006 COMMISSIONER OF INCOME TAX, JAIPUR-I, JAIPURVS.M/S. FOILS INDIA LAMINATES P. LTD., JAIPUR. Date: 31.10.2011 HON'BLE THE CHIEF JUSTICE MR. ARUN MISHRA'HONBLE MR. JUSTICE NARENDRA KUMAR JAIN-I Mr. J.K. Singhi, Senior Counsel assisted by Mr. AnuroopSinghi, for the appellant.Mr. J.K. Ranka with Mr. N.K. Baid, for the respondent. Heard counsel appearing on behalf of the parties. The appeal has been preferred by the Revenue,aggrieved by the order dated 04.08.2005 passed by the ITAT,relating to Assessment Year 1997-98. Question involved inthis appeal is, “Whether the ITAT was right in allowing thededuction of Rs. 13,07,454/- as interest payment ignoring thefact that the assessee has made interest free loans to its sisterconcerns?” Mr. J.K. Singhi, learned Senior Counsel assisted byMr. Anuroop Singhi, appearing on behalf of the Revenue hassubmitted that no interest was realized by the assessee fromits sister concerns, though the interest was paid by theassessee to the bank; the loan, which had been obtained,could not be said to be commercial expediency. Thus, theorder passed by the ITAT is illegal and deduction could nothave been allowed. Mr. J.K. Ranka, learned counsel appearing onbehalf of the respondent has submitted that there is a findingof fact recorded by ITAT that interest has been paid by thesister concerns of the assessee and at the end of financialyear, the concerned account was Nil. Learned counsel hasfurther submitted that even otherwise, interest has been paidto the bank by the assessee and the deduction of interest hasrightly been allowed. After hearing learned counsel for the parties, weare of the opinion that no substantial question of law arises inthe instant case. Firstly, there is finding of fact recorded bythe ITAT that interest has been paid to the assessee by thesister concerns and this fact is not in dispute that the assesseehas obtained the loan from the bank and he had paid theinterest to the bank. Apart from that it has not been disputed bylearned counsel appearing on behalf of the Revenue that eveninterest free loan could have been advanced. In the facts andcircumstances of the case, we find that there is finding of factrecorded by the ITAT that interest has been paid by theborrower sister concerns to the assessee. In view of the aforesaid, we find that nosubstantial question of law arises in this appeal.Consequently, the appeal is, hereby, dismissed. (NARENDRA KUMAR JAIN-I),J. (ARUN MISHRA),CJ. Manoj, S.No. S.62. D.B. INCOME TAX APPEAL NO. 132/2006 “All corrections made in the judgment/order have beenincorporated in the judgment/order being emailed.” MANOJ NARWANIJUNIOR PERSONAL ASSISTANT.