The Commissioner Of Income Tax-V, Pune v. Finolex Cables Ltd

kps HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1439 OF 2011 The Commissioner of Income Tax-V, Pune. ..Appellant -versus- Finolex Cables Ltd....Respondent ............ Mr.Vimal Gupta, for the Appellant.Mr.S.N.Inamdar, Senior Advocate with Mr.Mihir Naniwadekar, for the Respondent. ............ CORAM : DR. D.Y.CHANDRACHUD & M.S.SANKLECHA, JJ. Date : MARCH 1, 2012. P.C.: 1This appeal by the Revenue arises from the decision of the Income Tax Appellate Tribunal dated 30 March 2010 for Assessment Year 1997-98. The following questions of law have been framed in this appeal:- (1)Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in not following its own decision in assessee’s own case for AY 94-95, 95-96 and 96-97 on the issue of disallowance of guest house expenses of Rs.9,40,919/- and in setting aside the matter and restoring the issue back to the file of AO in the year under consideration;and in law, the ITAT was justified in not following its own decision in assessee’s own case for AY 94-95, 95-96 and 96-97 on the issue of disallowance of guest house expenses of Rs.9,40,919/- and in setting aside the matter and restoring the issue back to the file of AO in the year under consideration; (2)Whether on the facts and circumstances of the case, and in law the Tribunal was justified in holding that 90% of the income by way of lease rent need not be reduced as per explanation (baa) to Section 80HHC from the in law the Tribunal was justified in holding that 90% of the income by way of lease rent need not be reduced as per explanation (baa) to Section 80HHC from the business profit for the purpose of computation of deduction u/s 80HHC; (3)Whether on the facts and circumstances of the case, and in law the Tribunal was justified in allowing relief to the extent of Rs.11,19,85,290/- in computation of deduction u/s 80I of the I.T. Act, 1961 without appreciating the reasons mentioned by the A.O. for reducing the said claim made by the assessee in its return of income; (4)Whether on the facts and circumstances of the case and in law the Tribunal was justified in not appreciating the fact that Urse II unit was only expansion of existing ongoing industrial undertaking of Urse I and was not a new industrial undertaking and hence do not qualify for separate deduction u/s 80I of the I.T. Act, 1961; (5)Whether on the facts and circumstances of the case, and in law the Tribunal was justified in not applying the ratio of Hon’ble Kerala High Court’s decision in the case of Periyar Chemicals Ltd. v/s CIT reported in 226 ITR 467 which is squarely applicable to the facts of this case; (6)Whether on the facts and circumstances of the case, and in law the Tribunal was justified in not following its own decision in assessee’s own case for A.Y. 94-95 & 95-96 on the issue of disallowance of depreciation of Rs.1,08,80,215/- on leased out assets and in setting aside the matter and restoring the issue back to the file of AO in the year under consideration; and (7)Whether on the facts and circumstances of the case, and in law the Tribunal was justified in not following its own decision in assessee’s own case for AY 94-95 & 95-96 on the issue of disallowance of interest of Rs.90,37,595/- on loan taken for purchase of leased assets and in setting aside the matter and restoring the issue back to the file of AO in the year under consideration. 2As regards question No.1, the Tribunal has directed the Assessing Officer to re-examine the matter in view of the judgment of the Supreme Court in Britannia Industries Ltd. v/s Commissioner of IncomeTax1. Consequently, no substantial question of law would, therefore, arise.3Both the learned counsel are agreed that Question 2 is covered against the Revenue by the judgment delivered today in companion Income Tax Appeal No.162/2010. decision in assessee’s own case for AY 94-95 & 95-96 on the issue of disallowance of interest of Rs.90,37,595/- on loan taken for purchase of leased assets and in setting aside the matter and restoring the issue back to the file of AO in the year under consideration. 2As regards question No.1, the Tribunal has directed the Assessing Officer to re-examine the matter in view of the judgment of the Supreme Court in Britannia Industries Ltd. v/s Commissioner of IncomeTax1. Consequently, no substantial question of law would, therefore, arise.3Both the learned counsel are agreed that Question 2 is covered against the Revenue by the judgment delivered today in companion Income Tax Appeal No.162/2010. 4The learned counsel appearing for the Revenue and the Assessee are agreed that the questions 3, 4 and 5 would stand covered against the Revenue by the judgment delivered today by this Court in companion Income Tax Appeal No.129/2011. 5As regards questions 6 and 7, it is an agreed position that the matter was remitted back to the Assessing Officer by the Tribunal for reexamining the facts of the transaction in accordance with law. Hence, no substantial question of law would arise. 6The Appeal is, accordingly, dismissed. There shall be no order as to costs. (Dr.D.Y.Chandrachud, J.) (M.S.Sanklecha, J.)