Varun Industries Ltd v. Income Tax Officer

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPEAL NO. 6309 OF 2010 Varun Industries Ltd. ..... Appellant Vs. Income Tax Officer, 7(3) (1), Mumbai & Anr. ..... Respondents Ms.Aarti Vissanji with Mr.S.J.Mehta for the Appellant. Mr.Vimal Gupta, i./b. Ms.Padma Divakar for the Respondents. CORAM : DR.D.Y.CHANDRACHUD &R.D. DHANUKA, JJ. P.C.: DATE : APRIL 25, 2012 This Appeal arises from a decision of the Income Tax Appellate Tribunal dated 30 April 2010. The Assessment Year to which the appeal relates is A.Y. 2001 – 02. The Appeal raises the following questions of law : (1)Whether on the facts and circumstances of the case the Tribunal is justified in not deciding the issue regarding reopening of the assessment ? (2)Whether on the facts and circumstances of the case the Tribunal is right in denying netting of the interest received by the Appellant on the fixed deposits placed with the banks as margin money to avail credit facilities against interest paid for the purposes of working out the deduction under sec. 80HHC of the Act? ITXA6309_10 2.The Appeal is admitted on question (2) above and is taken up for final disposal by consent. The Learned Counsel appearing on behalf of the assessee does not press question (1) since question (2) is covered in favour of the assessee by the Judgment of the Supreme Court in ACG Associated Capsules (P) Ltd. vs. Commissioner of Income Tax (Civil Appeal No. 1914 of 2012 decided on 8 February 2012[1]). Since the second question is covered in favour of the assessee and against the revenue by the Judgment of the Supreme Court, the said question of law would have to be answered in the negative and in favour of the assessee. The Assessing Officer shall compute the deduction in terms of the judgment of the Supreme Court. 3.The Appeal is accordingly disposed of. 4.There shall be no order as to costs. DR.D.Y.CHANDRACHUD, J. R.D. DHANUKA, J.