Gujarat High Court
Pr.Commissioner Of Income Tax-3 vs Riddhi Siddhi Gluco Biols ... on 5 July, 2016
Author: Akil Kureshi
Bench: Akil Kureshi, A.J. Shastri
O/TAXAP/956/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 956 of 2015
==========================================================
PR.COMMISSIONER OF INCOME TAX-3,AHMEDABAD....Appellant(s)
Versus
RIDDHI SIDDHI GLUCO BIOLS LTD....Opponent(s)
==========================================================
Appearance:
MR NITIN K MEHTA, ADVOCATE for the Appellant.
MR S.N. SOPARKAR, Senior Advocate with B S SOPARKAR,
ADVOCATE for the Opponent
==========================================================
CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE A.J. SHASTRI
Date : 05/07/2016
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI) Revenue is in Appeal against the order of the Income Tax Appellate Tribunal dated 12.2.2015. The following questions are presented for our consideration:
"(A) Whether the order of the Tribunal is perverse in law and on facts in not confirming the disallowance under section 43B of the sales tax expenditure which remained unpaid at the end of the year ?
(B) Whether the learned Tribunal is right in law and on facts of the case in confirming the order of the Page 1 of 3 HC-NIC Page 1 of 3 Created On Sat Jul 09 00:52:25 IST 2016 O/TAXAP/956/2015 ORDER learned CIT(A) and thereby deleting the disallowance of interest expenses under proviso to section 36(1)
(iii) of Rs. 32,82,282/- ?
© Whether the Hon'ble ITAT is right in law and on facts of the case in confirming the order of the learned CIT(A) and thereby deleting the disallowance of interest expenses of Rs. 1,44,000/-?"
2. The first question pertains to the Assessing Officer's objection to the respondent assessee claiming deduction of sales tax liability which under the scheme framed by Karnataka State Government was deferred for a particular period. The Assessing Officer desired to apply section 43B of the Act and disallow the claim on the ground that statutory liability was not actually discharged. From the record, we however notice that the Tribunal in the earlier orders annexed of this very assessee had decided this issue in favour of the assessee relying on a statutory provision made by Karnataka State Legislature whereby such deferred payment of sales tax would be treated as loan in favour of the company. Reliance was also placed on the circulars issued by the Revenue. The department was not in a position to point out that such issue in case of assessee was carried in appeal further before High Court. this question is therefore, not required to be considered.
2. Question nos. 2 and 3 overlap and pertain to disallowance of interest on the ground that the assessee had made assessment in capital work--in-progress. The Tribunal however, found that the assessee had used interest free funds Page 2 of 3 HC-NIC Page 2 of 3 Created On Sat Jul 09 00:52:25 IST 2016 O/TAXAP/956/2015 ORDER to the tune of Rs. 289.08 crores as against which the investment in capital work-in-progress Rs. 26.01 crores. Under the circumstances, the Tribunal confirmed the view of the CIT (Appeals) deleting disallowance. No question of law arises.
3. Tax Appeal is dismissed.
(AKIL KURESHI, J.) (A.J. SHASTRI, J.) VC DARJI Page 3 of 3 HC-NIC Page 3 of 3 Created On Sat Jul 09 00:52:25 IST 2016