M/S. Ultramarine And Pigments Ltd v. Additional Commissioner Of Income Tax

ast IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.467 OF 2010 M/s. Ultramarine and Pigments Ltd.Vs.Additional Commissioner of Income Tax ....Appellant....Respondent. Mr. Hiro Rai a/w. Mr. S.S.Shetty & Mr. Mandar Vaidya, dvocate for appellant.Ms. Padma Divakar, advocate for respondent. CORAM:- J.P.DEVADHAR AND MRS.MRIDULA BHATKAR, JJ. DATED:- FEBRUARY 8, 2011. P.C. 1.Basically two questions are raised by the Appellant in this appeal. The same are as follows: 1.Whether the Tribunal was justified in upholding the disallowance of the interest of Rs.78,72,653/- on the ground that the investment in impugned shares were made for gaining controlling interest in the Malaysian Company, TCLIM ? 2.Whether the Tribunal was justified in directing the asseessing officer to compute the disallowance as per the provision of Section 14A of the Income Tax Act, 1961 ? 2.As regards second question is concerned, the Counsel for the parties state that in view of the Judgment of this Court in the case of Godrej & Boyce Mfg.Co.Ltd. v/s. CIT reported in 328 ITR page 81, the issue must be remanded back to the Tribunal for deciding the question afresh in the light of the aforesaid Judgment. 3.As regards first question is concerned, the Counsel for the parties state that the decision of this Court in the case of CIT v/s. Amritaben R. Shah reported in 238 ITR 777, which has been relied by the Tribunal is distinguishable on facts. Counsel for appellant submits that in that case, there was no dispute that investments in shares were made for the purpose of acquiring controlling interest therein, whereas, in the present case, the investments have been made for earning dividend. This aspect of the matter has not been considered by the Tribunal. 4.In this view of the matter both parties agree that this question also be remanded back to the Tribunal for de novo consideration. Accordingly, the impugned order of the ITAT dated 16[th] April, 2009 passed in ITA Nos.2775 and 3395/M/2005 relating to the assessment year 2001-02 is quashed and set aside insofar as it pertains to aforesaid questions are concerned and the matter is restored to the file of ITAT for deciding aforesaid questions in accordance with law. 5.Accordingly, Appeal disposed of on the above terms. (MRS.MRIDULA BHATKAR, J.) (J.P.DEVADHAR, J.)