Income Tax Appellate Tribunal - Lucknow
M/S U P State Mineral Development ... vs Department Of Income Tax on 13 June, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
LUCKNOW BENCH "B", LUCKNOW
BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND
SHRI B. R. JAIN, ACCOUNTANT MEMBER
ITA No.60/LKW/2012
Assessment Year:2008-09
ACIT v. M/s U.P. State Mineral Development Corporation Ltd.
Range IV Kapoorthala
Lucknow Lucknow
PAN:AAACU2954
(Appellant) (Respondent)
Appellant by: Shri. Jagdish, CIT (DR)
Respondent by: Shri. Shubham Rastogi, C.A.
Date of hearing: 13.06.2012
Date of pronouncement: 13.06.2012
ORDER
PER SUNIL KUMAR YADAV:
This appeal is preferred by the Revenue against the order of the ld. CIT(A) on the following grounds:-
1. The CIT(A) has erred in law and on facts of the case in deleting the disallowance of provisions of interest of Rs.1,83,48,720/-. While holding interest liability as allowable u/s 36(1)(iii), he has failed to appreciate and apply the decision of the Hon'ble Supreme Court in the case of SA Builders 288 ITR 1(SC). The CIT(A) further failed to consider the ratio of the decision of the Hon'ble Supreme Court in the case of New India Mining Corporation Pvt. Ltd. Vs. CIT 243 ITR 640.
2. The CIT(A) has erred in law and on facts of the case and failed to appreciate the concept of 'provision' from the angle of the :-2-:
Income-tax Act and also to ascertain whether it is an allowable expenditure in view of it being an apparent 'contingent liability'. The CIT(A) has also failed to appreciate the following decision of Hon'ble Supreme Court in the case of Vazir Sultan Tobacco Co. Ltd., 132 ITR 559 (SC), followed by Bombay High Court in the case of Goodlas Nerolac 150 ITR 484 (Bom).
2. During the course of hearing of the appeal, the ld. counsel for the assessee has invited our attention that the impugned issue is squarely covered by various orders of the Tribunal in the assessee's own case passed in assessment years 2002-03, 2003-04 and 2006-07. The copies of the orders of the Tribunal are placed on record. It was further contended that the ld. CIT(A) has adjudicated the issue following the order of the Tribunal for assessment year 2003-04. Therefore, there is no merit in the Revenue's appeal.
3. We have carefully examined the orders of the lower authorities and the earlier orders of the Tribunal in the light of the rival submissions and we find that the issue involved in this appeal is with regard to interest on Government loans of `1,83,48,720, for which a provision was made in the books of account though liability was not ascertained. The Assessing Officer added the same on the basis that similar provision was disallowed in earlier years.
4. An appeal was filed before the ld. CIT(A) and the ld. CIT(A) has followed the order of the Tribunal for assessment year 2003-04 in which the assessee's appeal was allowed following the earlier order of the Tribunal. During the course of hearing of the appeal, the assessee has also filed various orders of the Tribunal pertaining to assessment years 2002-03, 2003-04 and 2006-07 in which a consistent view was taken that provision of interest payable on loans taken by the assessee from the U.P. Government for business purposes is allowable expenditure under section 36(1)(iii) of the Income-tax Act, 1961 (hereinafter called in short "the Act"). The latest order placed before us is for assessment year 2006-07 in which earlier order of the Tribunal was followed while allowing the claim of the assessee. Since a consistent view was taken by the Tribunal on this issue, we, following the same, hold that the claim with regard to :-3-:
interest made by the assessee is allowable under section 36(1)(iii) of the Act in view of the decision of the Tribunal in assessee's own case. We accordingly confirm the order of the ld. CIT(A).
5. In the result, appeal of the Revenue is dismissed.
Order pronounced in the open court on 13.6.2012.
Sd/- Sd/-
[B. R. JAIN] [SUNIL KUMAR YADAV]
ACCOUNTANT MEMBER JUDICIAL MEMBER
DATED:13.6.2012
JJ:1306
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT(A)
4. CIT
5. DR
Assistant Registrar