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

srk IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPEAL NO.1399 OF 2010 The Commissioner of Income Tax-2,Mumbai ...Appellant Versus Raymond Ltd. ...Respondent Mr.Suresh Kumar 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 1 May 2009; the Assessment Year to which the appeal relates being AY 1999-2000. The following questions of law are raised on behalf of the Revenue: (i)Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in treating pre- operative expenditure of Rs.78,17,198/- in Nashik Steel division for setting up a CRGO Plant as revenue expenditure; (ii)Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in treating trial run expenditure of Rs.965.50 lakhs in respect of CRGO Plant at Nashik as revenue expenditure; (iii)Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in allowing interest relating to cold rolled steel unit at Nashik as allowable under Section 36(i)(iii) by treating the new unit as an extension of the existing unit where as it is totally a new project; (iv)Whether on the facts and in the circumstances of the case and in law, the ITAT justified in allowing foreign travel expenses on spouses of the employees as a business expenditure whereas it was not related to the business expenditure of the assessee; (v)Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in deleting the addition made by way of adjustment of prior period expenditure of Rs.592.99 lakhs under Section 115JA; (vi)Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in deleting the addition made by way of adjustment of debenture redemption reserve in the proceedings under Section 115JA; (vii)Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in deleting the addition of provision for doubtful debts under Section 115JA in view of the retrospective insertion of clause (g) in the Explanation to Section 115JA with retrospective effect from 01.04.1998; (viii) Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in deleting the addition made on account of provision of Rs.2,65,20,381/- for diminution in the value of the investment under Section 115JA in view of the retrospective insertion of clause (g) in the Explanation to Section 115JA with retrospective effect from 01.04.1998? 2.Counsel appearing on behalf of the Revenue and the counsel appearing on behalf of the assessee are agreed to the following position: 1. Questions (i) and (ii) which relate to preoperative expenses would stand covered by the decision of this Court rendered on 20 March 2012 in Income Tax Appeal No.189 of 2011 pertaining to the assessee for AY 1990-91;stand covered by the decision of this Court rendered on 20 March 2012 in Income Tax Appeal No.189 of 2011 pertaining to the assessee for AY 1990-91; 2. Question (iii) would stand covered in favour of the assessee and against the Revenue by the decision of the Supreme Court in Deputy Commissioner of Income Tax Vs. Core Health Care Ltd.[1]against the Revenue by the decision of the Supreme Court in Deputy Commissioner of Income Tax Vs. Core Health Care Ltd.[1] 3. Question (iv) would stand covered against the Revenue by the judgment of this Court in CIT v. Alfa Laval (I) Ltd.[2]judgment of this Court in CIT v. Alfa Laval (I) Ltd.[2] 2. Question (iii) would stand covered in favour of the assessee and against the Revenue by the decision of the Supreme Court in Deputy Commissioner of Income Tax Vs. Core Health Care Ltd.[1]against the Revenue by the decision of the Supreme Court in Deputy Commissioner of Income Tax Vs. Core Health Care Ltd.[1] 3. Question (iv) would stand covered against the Revenue by the judgment of this Court in CIT v. Alfa Laval (I) Ltd.[2]judgment of this Court in CIT v. Alfa Laval (I) Ltd.[2] 4. Questions (v) and (vi) would stand covered in favour of the assessee by the judgment rendered on 20 March 2012 in Income Tax Appeal No.1556 of 2011 in relation to the assessee for AY 2000-2001.assessee by the judgment rendered on 20 March 2012 in Income Tax Appeal No.1556 of 2011 in relation to the assessee for AY 2000-2001. 3.The Appeal is admitted on questions (vii) and (viii) and is taken up for hearing and final disposal by consent. 4.By consent and on the request of the counsel appearing on behalf of the Revenue and the counsel appearing on behalf of the assessee the aforesaid two issues are restored to the file of the Tribunal to reconsider the matter having regard to the insertion of clause (g) in the Explanation to Section 115JA of the Income Tax Act, 1961 with retrospective effect from 1 April 1998. In view of this direction, it is not necessary for the Court to answer the questions (vii) and (viii) as framed. 1. [2008] 298 ITR 194 2. [2006] 282 ITR 445 (Bom) 5. The appeal shall stand accordingly disposed of. There shall be no order as to costs. (DR.D.Y. CHANDRACHUD,J.) (M.S.SANKLECHA, J.)