The Commissioner Of Income Tax v. M/S.greaves Cotton Manufacturing Co.ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPLICATION NO.178 OF 2000.ANDINCOME TAX APPLICATION NO.179 OF 2000.ANDINCOME TAX APPLICATION NO.188 OF 2000. The Commissioner of Income Tax ..Applicant Vs.M/s.Greaves Cotton ManufacturingCo.Ltd...Respondent Mr.A.D.Kango for the Applicant.Mr.S.J.Mehta for the Respondent. CORAM :- DR.S.RADHAKRISHNAN &V.C.DAGA, JJ.DATE : 16TH APRIL, 2007 P.C. 1.Heard the learned Counsel for the parties. In the above Applications, the following substantial question of law sought to be raised: "Whether on the facts and in the circumstances ofthe case and in law, Income Tax AppellateTribunal was justified in holding that theallocation of the financial charges for workingout the eligible profit for the purpose ofcomputing the deduction under Section 80 I inrespect of the Nasik Unit was not in order?" 2.We have perused the order dated 9th June,1995 passed by the Tribunal. In paragraph 16 of its order the Tribunal had observed as under: 16. The last issue relates to the allowabilityof deduction under Section 80 I. The assesseecompany put up a new unit Phase II at Nasik.This was eligible for relief under Section 80 Iof the Act. The Assessee produced Profit & Loss Account for the purpose of computing relief underSection 80 I which reflected net loss ofRs.11,92,173/- in the Profit & Loss Account. Theassessee has debited financial charges of headofficer allocated to new unit of Rs.12,21,677/-.The Tribunal in the case of Manipal Power PressVs. ITO (29 ITJ (Bang.)197), has held thatfinancial charges of head office should not beallocated for computing profit of new unit forthe purpose of computing relief under Section 80I of the Act. The Commissioner of Income Tax(Appeals) declined to follow the decision of theTribunal, as no contrary decision was broughtbefore us, we find no reason to depart.Accordingly, we decide this issue in favour ofthe assessee and against the revenue.3.In the above matters, the Tribunal had reliedon the judgment in the case of Manipal Power Press Vs.ITO (29 ITJ (Banglore), 197) and held that the issueshould be answered in favour of the Assessee andagainst the Revenue. The learned Counsel for theApplicants fairly states that the Revenue has not challenged the aforesaid judgment and accepted the same. 4.Over and above, it appears that the Tribunal had passed the order in the Assessee’s case for theAssessment Year 1983-84 to 1985-86. The learnedCounsel for the Revenue states that the Revenue hasnot challenged the said order. Under the aforesaidfacts and circumstances of the case, we do not find any substantial question of law involved in the above. Hence, the Applications stand dismissed. (V.C.DAGA,J.) (DR.S.RADHAKRISHNAN,J.)