Calcutta High Court
Kanoria Chemicals Industries Ltd vs C.I.T. - Iv Kolkata on 11 December, 2008
Author: Pinaki Chandra Ghose
Bench: Pinaki Chandra Ghose
1
ITA No. 187 of 2004
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction(Income Tax)
ORIGINAL SIDE
KANORIA CHEMICALS INDUSTRIES LTD. Plaintiff/Petitioner/Applicant
Versus
C.I.T. - IV KOLKATA Defendant/Respondent
BEFORE:
The Hon'ble JUSTICE PINAKI CHANDRA GHOSE The Hon'ble JUSTICE SANKAR PRASAD MITRA Date : 11th December, 2008.
The Court : After hearing the learned Advocate for the appellant, the appeal is admitted and the following substantial questions of law are referred for adjudication :
" (a) Whether on a true and proper interpretation of the scheme of the Government of Gujarat the Tribunal was justified in law in holding that the incentive amount of Rs.14,71,545/- for the assessment year 1988-89 was liable to tax as a revenue receipt and was not on capital account outside the purview of taxation?
(b) Whether on a true and proper interpretation of the scheme of Government of Gujarat, the Tribunal was justified in law in holding that the subsidy amounting to Rs.17,28,843/- and Rs.12.65,490/- for the assessment years 1995-96 and 1996-97 respectively was liable to tax as a revenue receipt and was not on capital account outside the purview of taxation?
(c ) Whether on a true and proper interpretation of the provisions of sub-sections (1) and (6) of Section 43, the Tribunal was justified in law in upholding the action of the Assessing Officer for the assessment years 1987-88, 1988-89 and 1993-94 to 1998-99 in reducing the sum of 2 Rs.34,19,226/- no longer payable to M/s. Josef Meissner Gmbh & Co. from the actual cost/written down value of the assets for the purpose of grant of depreciation allowance?
(d) Whether the Tribunal was justified in law in upholding the disallowance of the payments made by the appellant during the previous years relevant to the assessment years 1987-88 and 1988-89 to Shriram Institute for Industrial Research and Tata Economic Consultancy Services for Research in connection with Acetal Resins and Hexamine, value added products which could be manufactured from the appellant's existing product formaldehyde, as unrelated to the appellant's existing business and its purported findings in that behalf are arbitrary, unreasonable and perverse?
(e) Whether the Tribunal was justified in law in upholding the addition of Rs.2,82,573/- made in the assessment year 1988-89 on account of notional interest on investment made with M/s. Kamarhatty Co. Ltd., rejecting the change in the method of accounting bona fide made by the appellant and followed regularly and consistently and its purported findings in that behalf are arbitrary, unreasonable and perverse ?
(f) Whether the Tribunal was justified in law in upholding the disallowance of the appellant's claim under sections 28 and/or 37(1) for deduction of the business advance of Rs.74,59,661/- made to the joint venture company M/s. Polypropylene India Ltd. written off in the appellant's accounts for the assessment year 1995-96 and its purported findings that the expenditure was capital in nature not incidental to the running of the appellant's business and disallowing the claim are arbitrary, unreasonable and perverse?
(g) Whether the Tribunal was justified in law in upholding the disallowance of a sum of Rs.13,42,739/- out of the interest expenditure incurred by the appellant for the purposes of its business during the 3 previous year relevant to the assessment year 1995-96 and its purported findings in that behalf and upholding taxation of the said amount as deemed interest on the advance made to M/s. Polypropylene India Ltd. in the earlier years out of the appellant's own funds are arbitrary, unreasonable and perverse?"
Let paper book be prepared by the appellant and be served upon the respondent within eight weeks from date. Leave is granted to include the order passed by the learned Tribunal in the Misc. application filed by the appellant in the paper book.
Let the appeal appear ten weeks hence. Urgent 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.) km