The Commissioner Of Income Tax – 11 v. M/S.zee Telefilms Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2360 OF 2011 The Commissioner of Income Tax – 11..Appellant. Versus M/s.Zee Telefilms Limited..Respondent. Mr.Suresh Kumar for the appellant.Mr.Sanjiv M. Shah for the respondent. P.C. : 1.In this appeal by the Revenue for assessment year 2003-04, following question of law has been proposed for our consideration. “Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the interest income had to be treated as business income and only 90% of the same had to be deducted from profits of the business for the purpose of computing deduction under Section 80HHF of the Income Tax Act, 1961 ?” 2.By the impugned order, the Tribunal has allowed the claim of the respondent – assessee regarding deduction of 90% of the interest income itxa2360-11 from the profits of business while computing deduction under Section 80HHF in treating interest income as business income. In the impugned order, the Tribunal placed reliance upon its order dated 29[th] September 2009 passed on a challenge by the respondent – assessee to an order passed by the Commissioner of Income Tax (A) under Section 263 of the Income Tax Act, 1961 ('Act' for short). The Tribunal in the above order while holding that the order under Section 263 of the Act was not justified had held that the assessing officer had correctly deducted 90% of the interest from the profits of business in the original assessment. However, in the meantime, consequent to the order of the Commissioner of Income Tax the assessing officer passed a fresh order which is the subject matter of the present appeal. 3.It is pertinent to note that the Revenue had filed an Income Tax Appeal being Appeal No.2262 of 2010 in this Court challenging the order dated 29[th] September 2009 passed by the Tribunal in respect of an order under Section 263 of the Act. This Court by its order dated 10[th] August 2011 refused to entertain the appeal filed by the Revenue challenging the order dated 29[th] September 2009. Therefore, the order of the Tribunal dated 29[th ]September 2009 holding that revision under Section 263 of the Act by the Commissioner of Income Tax is bad, the order of the assessing officer consequent to order of Commissioner of Income Tax under Section 263 of the Act is also not sustainable. 4.In view of the above, we see no reason to interfere with the order of the Tribunal allowing the claim of the respondent – assessee. The appeal is accordingly dismissed with no order as to costs. (M.S. Sanklecha, J.) (J.P. Devadhar, J.)