The Commissioner Of Income-Tax, City-Ii, Mumbai Appellant v. M/S. Ewac Alloys Ltd. Respondent

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORIGINAL SIDE INCOME TAX APPEAL NO.1 OF 2002 The Commissioner of Income-tax,City-II, MumbaiAppellant vs. M/s. Ewac Alloys Ltd.Respondent Ms. S. V. Bharucha i/b. Mr. H. D. Rathod for the appellant. P.C.: CORAM : R.M. LODHA &J. P. DEVADHAR,JJ.Date :12[h] August 2004 Heard the learned counsel for the revenue. 2.In the memo of appeal two questions of law have beenproposed. The said questions are thus: “(a)Whether on the fact and circumstances ofthe case and in law, the Hon'ble ITAT was justified indirecting the deletion of addition of Rs. 22.51 lakhsmade by the Assessing Officer on account of valuationof closing stock for availing of Modvat credit by the Assessee, while relying on the decision of this Hon'bleCourt in case of Indo Nippon Chemicals (245 ITR384)? (b)Whether on the facts and circumstances ofthe case and in law, the Hon'ble ITAT was justified indirecting the Assessing Officer to verify and re-checkthe claim of the assessee made under the provisions ofsection of section 80 I of the I.T. Act relating to theInterest received and paid by the assessee and takinginto account the net interest?” 3.In so far as question (a) is concerned, the learned counsel forthe revenue did not dispute that the controversy is concluded by thejudgment of the Supreme Court in the case of Commissioner of Income-tax v. Indo Nippon Chemicals Co. Ltd., 261 ITR 275. Thus, question (a)does not survive. 4.As regards question (b), the Tribunal considered the matter inparagraph 2 of its order thus: “2.The second ground relating to thecomputation of the deduction under section 80I of theAct is restored to the file of the AO. He will verifywhether the interest received and paid by the assesseeand in respect of which the assessee claims theprinciple of netting is of the same nature as in theassessee's own case reported in 42 ITD 218. If theinterest is of the same nature as in the reporteddecision, the AO shall follow the Tribunal's order andallow relief. Before taking a decision one way or theother the AO shall afford adequate opportunity to theassessee of being heard. The ground is allowed for statistical purposes.” 5.The consideration of the matter by the Tribunal does not suffer from any infirmity. The Tribunal has already observed that before takinga decision on this aspect the assessing officer shall afford adequateopportunity to the assessee of being heard. 6.The proposed question (b) cannot be said to be a substantialquestion of law. 7.Appeal is dismissed in limine. (R. M. LODHA, J.) (J. P. DEVADHAR,J.)