The Commissioner Of Income Tax v. M/S. Bajaj Hindustan Ltd

(-1-) IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 908 OF 2008 The Commissioner of Income Tax ... Appellant The Commissioner of Income Tax ... Appellant Versus M/s. Bajaj Hindustan Ltd. ... Respondent Ms. Devki Iyer for the Appellant. Mrs. Vasanti B. Patel for Respondent. CORAM: F.I.REBELLO&R.S.MOHITE, JJ.DATED: 24TH MARCH, 2009 CORAM: F.I. R.S.MOHITE, JJ. DATED: 24TH MARCH, 2009 P.C.: P.C.: . The Revenue is in appeal on the following two questions : "(a) Whether on the facts and in the circumstances of the case the Hon’ble Tribunal is right in confirming the order of CIT(A) in holding that a sale of additional quota of free sale of sugar granted to the assessee by the Central Govt. as capital receipt? (b) Whether on the facts and in the circumstances of the case the Hon’ble Tribunal is right in confirming the order of CIT (A) in deleting disallowance made by A.O. under rule 6B of Rs.17,556/-?" 2 . In so far as second question is concerned, the tribunal followed the judgment of this court in CIT Vs. Allana Sons Pvt.Ltd. 216 ITR 690. Nothing has been brought to our attention to point out that the ratio of the said judgment was not applicable. In the light of that in our opinion, the second question would not arise. . In so far as first question is concerned, we had considered the issue in the case of CIT Vs. Saxeria in Income Tax Appeal No. 2318/Mum/94 decided on 4.2.2008. We had therein considered the ratio of the Calcutta High Court in CIT Vs. 238 ITR 445. We had also noted that the Special Leave Petition against the said order was dismissed. We had approved the view taken by the Calcutta High Court. . In our opinion, the finding by the tribunal that the receipt amounts to capital receipt cannot be faulted with. The assessee had taken loan for the purpose of expansion of the existing industrial undertaking in the instant case for the production of sugar. Under the scheme available, on expansion the assessee was entitled for sale of additional quota of sugar. The sale proceeds were to be adjusted toward the repayment of loan taken by the assessee. In these circumstances, in our opinion, 3 the same would amount to capital receipts. The first question also would not arise and consequently appeal dismissed. (R.S.MOHITE, J.) (F.I.REBELLO, J.) (R.S.MOHITE, J.) (F.I.REBELLO, J.) (R.S.MOHITE, J.) (F.I.REBELLO, J.)