Calcutta High Court
Commissioner Of Income Tax vs Ifb Agro Industries Ltd on 2 September, 2014
Author: Soumitra Pal
Bench: Soumitra Pal
ORDER SHEET
ITA No. 70 of 2013
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION (INCOME TAX)
ORIGINAL SIDE
COMMISSIONER OF INCOME TAX, KOLKATAT - II
Versus
IFB AGRO INDUSTRIES LTD.
BEFORE:
The Hon'ble JUSTICE SOUMITRA PAL
The Hon'ble JUSTICE ARINDAM SINHA
Date : 2nd September, 2014.
Appearance:
Md. Nizamuddin, Adv.
. .for the Appellant
Mr. J. P. Khaitan, Sr. Adv.
Ms. Manju Agarwal, Adv.
Mr. Bajrang Manot, Adv...
.. for the respondents.
The Court : This Appeal under Section 260A of the Income Tax Act, 1961 was admitted on the following question:
"Whether the learned Tribunal applied the correct legal principles in passing its judgement and order whereby both the Revenue's appeal and the appeal of the assessee have been allowed in part?"
Md. Nizamuddin, learned Advocate appearing on behalf of the appellant, submits that a further question involved is whether deposit is a loan 2 attracting the provisions of Section 2(22)(e) of the Income Tax Act, 1961 which is to be adjudicated. We are satisfied that the case also involves such question.
We find from the order of the Tribunal there is no dispute that what the assessee had received were intercorporate deposits. On those facts the Tribunal held the intercorporate deposits cannot be treated as a loan for the applicability of that section.
The Tribunal found, inter alia, as under:
"The Ld. CIT(A) has, after accepting that this is intercorporate deposit proceeded to hold that the term intercorporate deposit was synonymous of loan. At this point, the Ld. CIT(A) fell into error as an intercorporate deposit is not a loan but a deposit which has a meaning different from the term loan. The decisions as relied on by the Ld. CIT(A) as also by the Ld. CIT (DR), admittedly, are on 'loans'. None of the decisions referred to by the Ld. CIT (A) or the Ld. CIT(DR) discusses anywhere that deposits are to be treated as loans. Consequently, respectfully following the decision of the coordinate bench of this Tribunal in the case of Bombay Oil Industries Ltd. referred to supra, the addition representing intercorporate deposits treated as loan by the AO and as confirmed by the Ld. CIT(A) stands deleted."
Keeping in mind, that a fiscal statute has to be construed strictly, we do not find the word 'deposit' used in Section 2(22)(e) of the Act when the said Act 3 itself contemplates both 'loans' and 'deposits' as provided in Section 269SS and Section 269T. Therefore, as the word 'deposit' does not fall within the purview of Section 2(22)(e) of the Act the intercorporate deposits cannot be treated to be a 'loan' for the purposes of its application in the facts of this case.
We, therefore, answer the question formulated in the positive in favour of the assessee and against the revenue. We answer the other substantial question involved in this case in the negative in favour of the assessee and against the revenue.
The appeal is dismissed.
Urgent certified photocopy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(SOUMITRA PAL, J.) (ARINDAM SINHA, J.) cs/