Varun Industries Ltd v. Income Tax Officer,7(3) (1), Mumbai & Anr

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPEAL NO. 6066 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. DATE : APRIL 25, 2012 P.C.: 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. 2004 – 05. The Appeal raises the following question of law : 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? 2.The question of law is covered in favour of the Assessee and against the revenue by the Judgment of the Supreme Court in ACG Associated Capsules (P) Ltd. vs. Commissioner of Income Tax.[1]The appeal is accordingly admitted and is taken up for final disposal by consent. In view of the decision of the Supreme Court, the question of law is 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.