D.b. Income Tax Appeal v. M/S Manglam Cement Ltd., Aditya Nagar, Morak, Kota

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 116 / 2010Commissioner Of Income Tax Kota. ----Appellant Versus M/S Manglam Cement Ltd., Aditya Nagar, Morak, Kota. ----Respondent _____________________________________________________ For Appellant(s) : Mrs. Parinitoo JainFor Respondent(s) : Mr. Sanjay Jhanwar with Ms. Archana _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE DR. JUSTICE VIRENDRA KUMAR MATHURJudgment Per Hon’ble Jhaveri, J. 01/06/2017 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal haspartly allowed the appeal preferred by the department anddismissed the cross objection of the assessee. However, thedepartment has challenged the order of the Tribunal. 2.This Court while admitting the appeal on 18.12.2010 hasframed the following substantial questions of law: “(i)Whether the findings of the Tribunalare perverse in confirming the order of theCIT(A)byallowinginterestofRs.7,62,02,502/- as revenue expenditure,specifically when the interest was paid onborrowed capital to set up a new unit andalso capitalized in the books of account? (ii)Whether the findings of the Tribunalare perverse in allowing the interest ofRs.7,62,02,502/- by following its decisionfor assessment year 1993-94 which is pending before Hon’ble High Court foradjudication?” 3.Counsel for the appellant has contended that the CIT(A) andthe Tribunal has committed serious error in reversing the viewtaken by the Assessing Officer. 4.Counsel for the respondent has contended that the issue issquarely covered by the decision of this Court in the case ofCommissioner of Income Tax vs. M/s. Mangalam CementLtd. in DB Income Tax Appeal No.733/2008, decided on04.01.2017 wherein this court has observed as under: “4.The questions in this appeal arecovered by the decision of this Court in thecase of Commissioner of Income tax, JaipurVs. M/s Manglam Cement Ltd. decided on04.10.2016 along with two other appeals,which reads as under: “1.By way of this appeal, the departmenthas challenged the order of the Tribunalwhereby the Tribunal has dismissed theappeal of the Department and confirmedthe order of the CIT (Appeals). 2.This Court has framed followingquestions of law in Tax Appeal No.80/2002.“Whether in the facts and circumstances ofthe case and in law, the learned ITAT wasjustified in holding that the expenditureamounting to Rs.2,20,435/- spent on giftsand presentations did not constituteexpenditure by way of advertisement andthereby do not attracting the limitationcontained in Rule-6B of the Income TaxRules, 1962? Whether on the facts and circumstances ofthe case, the learned ITAT committedserious illegality and error of judgment inholding that the interest paid on theborrowings utilised for setting up a new unitof cement plant constituted revenueexpenditure ignoring the fact that the planthad not yet commenced production?” 3.In other two appeals, the questionno.2 above is the only question. 4.The first issue is covered by thedecision of this Court in the case ofCommissioner of Income Tax Vs. M/sMangalam Cement Ltd., Kota- D.B. IncomeTax Reference No.10/1999 decided on17.10.2002, where the issue was answeredagainst the assessee and in favour of thedepartment. 5.In that view of the matter, the firstissue will be governed by the decision ofthis Court in D.B. Income Tax ReferenceNo.10/1999. Therefore, the issue no.1 isanswered in favour of the Departmentagainst the assessee. 3.In other two appeals, the questionno.2 above is the only question. 4.The first issue is covered by thedecision of this Court in the case ofCommissioner of Income Tax Vs. M/sMangalam Cement Ltd., Kota- D.B. IncomeTax Reference No.10/1999 decided on17.10.2002, where the issue was answeredagainst the assessee and in favour of thedepartment. 5.In that view of the matter, the firstissue will be governed by the decision ofthis Court in D.B. Income Tax ReferenceNo.10/1999. Therefore, the issue no.1 isanswered in favour of the Departmentagainst the assessee. 5.1On second issue, as relied upon by theTribunal in para 8, the decision of TataChemicals Ltd. Vs. DCIT as confirmed bythe Bombay High Court in Commissioner ofIncome Tax Vs. Tata Chemicals Ltd. 256 ITR395, against which SLP was dismissed, hasheld in para 8 as under: “As far as question (a) is concerned, it isnot in dispute that this question was notraised before the Tribunal. Mr. Desaisubmitted before us that under S.260A(6)(a), it is permissible for the High Court todetermine any issue which is notdetermined by the Tribunal. Gthe carefulreading of section will show that the HighCourt can decide only that question whichwas raised but not determined by theTribunal. Therefore, it is necessary that thequestion sought to be raised ought to havebeen raised before the Tribunal and then ifit has not determined it, one can say that ithas not been determined by the Tribunaland, therefore, the High Court should lookinto it. In the present case, we do not findthat this issue had been raised before theTribunal. It is also not the case of theRevenue that the issue or question wasraised but not decided by the Tribunal. Inthe circumstances, we do not propose todwell on this question.” 6.In that view of the matter, the issueno.2 in Appeal no.80/2002 and the onlyquestion in Appeal No.69/2005 and319/2005 requires to be answered in favourof the assessee and against theDepartment. 7.All the three appeals stand disposed ofaccordingly. 5.Therefore, the issues are answered infavour of the assessee and against thedepartment.6.The appeal stands disposed of.” 5.In that view of the matter, the issues are answered in favour of the assessee and against the department. 6.The appeal stands disposed of. (VIRENDRA KUMAR MATHUR),J. (K.S. JHAVERI),J. Asheesh Kr. Yadav/94