The Commissioner Of Income Tax-2,Mumbai v. Raymond Ltd

srk IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPEAL NO1325 OF 2009 The Commissioner of Income Tax-2,Mumbai ...Appellant Versus Raymond Ltd. ...Respondent Mr.Vimal Gupta for appellant. Mr.Percy J. Pardiwala, Senior Advocate with Mr.Mohan Salian, Ms.Vaijayanta Shete and Mr.Jainuddin Khan i/b. Gagrats for respondents. CORAM: DR.D.Y. CHANDRACHUD & M.S.SANKLECHA, JJ. March 21, 2012. P.C. 1.This appeal by the Revenue arises from a decision of the Income Tax Appellate Tribunal dated 22 March 2007; the Assessment Year to which appeal relates being AY 1995-96. The following questions of law are raised on behalf of the Revenue: (A)Whether on the facts and in the circumstances of the case and in law, the ITAT is right in deleting the increase in disallowance under Rule 6D made by the A.O.; (B)Whether on the facts and in the circumstances of the case and in law, the ITAT is right in deleting disallowance of pre-operative expenses even though the said expenditure pertains to establishment of steel division is capital in nature; (C)Whether on the facts and in the circumstances of the case and in law, the ITAT is right in allowing deduction of payment in respect of technical know-how under Section 37 while holding Section 35AB is not applicable; (D)Whether on the facts and in the circumstances of the case and in law, the ITAT is right in allowing the deduction in respect of interest pertaining to new unit despite not allowable under Section 36(1)(iii); (E)Whether on the facts and in the circumstances of the case and in law, the ITAT is right in allowing expenses on electricity and water charges in respect of the property owned by assessee company given to Directors for residential purpose and holding only perquisites value can be assessed in the hands of Directors; (F)Whether on the facts and in the circumstances of the case and in law, the ITAT is right in allowing the actual premium paid in redemption of debentures as revenue expenditure; (G)Whether on the facts and in the circumstances of the case and in law, the ITAT is right in deleting the addition on valuation of inventory made by the AO; (H)Whether on the facts and in the circumstances of the case and in law, the ITAT is right in allowing the deduction of lease rent and depreciation of leased assets while computing taxable profit for the purpose of 80HHC deduction? 2.Counsel appearing on behalf of the Revenue and the counsel appearing on behalf of the assessee are agreed that the Questions (A), (B), (C), (D) and (F) would stand covered in favour of the assessee and against the Revenue for the following reasons: 1. Questions (A) and (B) are covered by the decision rendered on 20 March 2012 in Income Tax Appeal No.189 of 2011 pertaining to AY 1990-91;March 2012 in Income Tax Appeal No.189 of 2011 pertaining to AY 1990-91; 2. Question (C) is covered by the decision rendered on 21 March 2012 in Income Tax Appeal No.1357 of 2009 for AY 1994-95;2012 in Income Tax Appeal No.1357 of 2009 for AY 1994-95; 3. Question (D) is covered in favour of the assessee by the decision of the Supreme Court in Deputy Commissioner of Income Tax Vs. Core Health Care Ltd.[1]Core Health Care Ltd.[1] 4. Question (F) is covered by the decision rendered on 20 March 2012 by this Court in Income Tax Appeal No.188 of 2011 for AY 1992-93.by this Court in Income Tax Appeal No.188 of 2011 for AY 1992-93. 3.As regards Question (E), this ground does not arise in relation to AY 1995-96 at all and hence the question would not arise from the decision of the Tribunal for the Assessment Year in question. 4.The appeal is admitted on Questions (G) and (H) and is taken up for hearing and final disposal by consent at this stage. 3. Question (D) is covered in favour of the assessee by the decision of the Supreme Court in Deputy Commissioner of Income Tax Vs. Core Health Care Ltd.[1]Core Health Care Ltd.[1] 4. Question (F) is covered by the decision rendered on 20 March 2012 by this Court in Income Tax Appeal No.188 of 2011 for AY 1992-93.by this Court in Income Tax Appeal No.188 of 2011 for AY 1992-93. 3.As regards Question (E), this ground does not arise in relation to AY 1995-96 at all and hence the question would not arise from the decision of the Tribunal for the Assessment Year in question. 4.The appeal is admitted on Questions (G) and (H) and is taken up for hearing and final disposal by consent at this stage. 5.Counsel appearing on behalf of the Revenue and the counsel appearing on behalf of the assessee state that : (i) in terms of the decision rendered by this Court on 20 March 2012 in Income Tax Appeal No.189 of 2011, Question (G) would have to stand restored to the file of the Tribunal for a fresh decision; and (ii) Question (H) may be restored to the file of the Assessing Officer by consent for re-determining the issue of deduction under Section 80HHC. Consequently, in terms of the aforesaid statement, Question (G) is restored to the file of the Tribunal for a fresh decision and Question (H) shall stand restored to the file of the Assessing 1. [2008] 298 ITR 194 Officer. Appeal is accordingly disposed of. There shall be no order as to costs. (DR.D.Y. CHANDRACHUD,J.) (M.S.SANKLECHA, J.)