Calcutta High Court
C.I.T Wb- I vs The Qudh Sugar Mills Lts on 10 December, 2008
Author: Pinaki Chandra Ghose
Bench: Pinaki Chandra Ghose
ITA No. 139 of 2001
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION (INCOME TAX)
ORIGINAL SIDE
C.I.T WB- I
Versus
THE QUDH SUGAR MILLS LTS
BEFORE:
The Hon'ble JUSTICE PINAKI CHANDRA GHOSE
The Hon'ble JUSTICE SANKAR PRASAD MITRA Date : 10th December, 2008.
The Court :- It appears this appeal was admitted for the assessment year 1991-92 on the following questions :
"a) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in law in deleting the addition of Rs.4,75,000/- on account of Provision of expenditure in the Canning Unit?
b) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in law in deleting the addition on account of valuation of closing stock of Canning Unit ?
c) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in law in deleting the notional interest of Rs.1,62,000/-
in respect of loan advanced to Temacco Ltd.?"
2This appeal was also admitted for the assessment year 1992-93 on the following questions :
"a) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in law in deleting the addition of Rs.3,95,000/- on account of the provision of expenditure in the Canning Unit ?
b)Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in law in deleting the notional interest of Rs.1,62,000/-
in respect of loan advanced to Texmacco Ltd.? "
The first point has been taken before us that the tax effect is much less than the amount so mentioned in the CBDT circular. Therefore, this appeal could not be entertained at all. The other point as it appears that on account of provision of expenditure in the Canning Unit has already been settled because the amount so paid for one unit is automatically given to the accounts of the head office of the company in totality and thereby the assessee must get the benefit out of that. Accordingly, in our considered opinion the answer must be in negative in respect of the question raised in this appeal and should be in favour of the assessee. It further appears that the account on valuation of closing stock of Canning Unit similarly will come in the account of the head office and further appears that the Tribunal was justified in law in deleting the notional interest of Rs.1,62,000/- in respect of the loan advanced to Texmacco Limited and furthermore the same is also covered under the said CBDT circular. So, for the assessment year 1991-92 this appeal must fail and is hereby dismissed. So far the question as raised for the assessment year 1992-93 is also of the same amount of notional interest of Rs.1,62,000/- and that automatically is 3 answered in the negative by virtue of the order so passed by us for the earlier assessment year 1991-92 and the other question in deleting the additional expenditure on account of the provision of expenditure of Canning Unit is also covered which we have also decided for the assessment year 1991-92 in favour of the assessee. So, in our considered opinion the orders so passed by the Learned Tribunal have to be affirmed and the questions are also to be answered in the negative against the department.
Accordingly, the appeal is dismissed.
All parties concerned are to act on a signed xerox copy of this order on the usual undertakings.
Urgent xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(PINAKI CHANDRA GHOSE, J.) (SANKAR PRASAD MITRA, J.) GH.