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Punjab-Haryana High Court

The Commissioner Of Income Tax-Iii vs M/S Malwa Cotton Spinning Mills Ltd on 25 July, 2008

Bench: Satish Kumar Mittal, Augustine George Masih

      IN THE HIGH COURT OF PUNJAB AND HARYANA AT
                     CHANDIGARH.

                                                          I.T.A. No. 396 of 2007
                                             DATE OF DECISION : 25.07.2008

The Commissioner of Income Tax-III, Ludhiana

                                                                 .... APPELLANT

                                      Versus

M/s Malwa Cotton Spinning Mills Ltd., Ludhiana

                                                               ..... RESPONDENT

CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTAL
             HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH


Present:     Mr. Rajesh Sethi, Advocate,
             for the appellant-revenue.

             Mr. Sandeep Goyal, Advocate,
             for the respondent-assessee.

                           ***

SATISH KUMAR MITTAL , J. ( Oral ) The Revenue has filed this appeal under Section 260 A of the Income Tax Act, 1961 against the order dated 27.3.2007 passed by the Income Tax Appellate Tribunal, Chandigarh Bench `A', Chandigarh (hereinafter referred to as `the ITAT') in ITA No. 1120/Chandi/2005 for the Assessment Year 2001-02, in case of the assessee, by raising the following substantial question of law :-

"Whether, on the facts and the circumstances of the case, the ITAT was correct in deleting of disallowance of Rs.1,32,57,500/- made on account of interest relatable to ITA No. 396 of 2007 -2- investment in capital work-in-progress ignoring explanation 8 to section 43 (1) of the Income Tax Act, 1961 which requires the interest on borrowed capital to be treated as capital expenditure?"

At the time of issuing of notice of motion, counsel for the revenue stated that the issue involved in this appeal is governed by a Full Bench decision of this Court in ITA No. 1 of 2003, titled as "Commissioner of Income Tax-I, Ludhiana Versus M/s. Vardhman Polytex Limited, Chandigarh Road, Ludhiana", decided on 21.1.2008.

Mr. Sandeep Goyal, counsel for the assessee has pointed out that the aforesaid question has now been considered and decided by the Supreme Court against the revenue in Deputy Commissioner of Income Tax versus Core Health Care Ltd. (2008) 298 ITR 194 (SC). Counsel for the revenue does not dispute this legal position.

In view of the aforesaid decision of the Supreme Court, where the issue has already been settled, in our opinion, now no substantial question of law remains to be answered by this Court.

Dismissed.

                                        ( SATISH KUMAR MITTAL )
                                                 JUDGE


July 25, 2008                        ( AUGUSTINE GEORGE MASIH )
ndj                                            JUDGE