PRINCIPAL COMMISSIONER OF INCOME TAX 4 vs. S A L STEEL LTD

Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Tax Appellate Tribunal, Ahmedabad Bench ‘d’ in ITA No.1431/Ahd/2015 for Assessment Year 2011-12, by which the learned Tribunal has confirmed the order passed by the learned CIT (Appeals) deleting disallowance under Section 36(1)(iii) of the Income Tax Act, the Revenue has preferred the present appeal with the following proposed question of law:- “Whether

The facts leading to the present appeal in nutshell are as under:-

1 The assessee filed its return of income on 26.09.2011 declaring total income of Rs.2,25,694/- after set-off of brought forward loss of Rs.7,96,76,896/-. The case was taken up for scrutiny and the assessment was finalized under Section 143(3) of the Act assessing total book profit under Section 115JB of Rs.1,78,81,092/-. It is required to be noted that while finalizing the assessment,

2 Feeling aggrieved and dissatisfied with the order passed by the Assessing Officer disallowing interest of Rs.92,04,000/- under Section 36(1)(iii) of the Act and other additions /disallowances, the assessee preferred appeal before the CIT (Appeals). The loans and advances given to six parties concerned, viz. Mahavir Enterprises, Surat (RM), Mahavir Enterprises and Shree Mahavir Alloys (RM) were considered with respect to earlier Assessment Years and pursuant to the order passed by the learned CIT (Appeals), the said disallowance was deleted. Consequently, considering the aforesaid facts and circumstances, more particularly the effect given with respect to interest paid on the aforesaid loans and C/TAXAP/700/2018 ORDER advances for the Assessment Years 2009-10 and 2010-11, the learned CIT (Appeals) deleted disallowance under Section 36(1)(iii) of the Act. At this stage, it is required to be noted that when the learned CIT (Appeals) deleted the aforesaid disallowance, the appeals by the Department against the decision of the CIT (Appeals) for Assessment Years 2009-10 and 2010-11 were pending. However, subsequently, the appeals preferred by the Revenue came to be dismissed and the same has attained finality. On an appeal preferred by the Revenue and observing in paras-4 as under, the learned Tribunal has dismissed the appeal preferred by the Revenue for Assessment Year 2011-12 and has confirmed the deletion by the Assessing Officer of disallowance under Section 36(1) (iii) of the Act:- “4. On these facts, we take note of the decision of the Co-ordinate bench of Tribunal in assessee’s own case concerning 2009-10 & 2010-11 in ITA No.2013/Ahd/2013 and ors order dated 18.01.2017 where in the similar facts, the relief was granted to the assessee and no justification was found in resorting to disallowance under section 36(1)(iii) of the Act.”

The factual matrix recorded by the learned CIT (Appeals) and the learned Tribunal is not in dispute and as such, not disputed by Shri Bhatt, learned Counsel C/TAXAP/700/2018 ORDER appearing on behalf of the appellate-Revenue.

Under the circumstances and more particularly when with respect to interest paid on loans and advances to the parties in the year under consideration, the deletion of disallowance for the earlier year with respect to the interest paid on very loans and advances came to be confirmed and the disallowance under Section 36(1)(iii) of the Act was deleted, it cannot be said that the learned Tribunal has committed any error in deleting the disallowance under Section 36(1)(iii) of the Act. No substantial question of law arises in the present Tax Appeal. The present Tax Appeal deserves to be dismissed and it is accordingly dismissed. (M.R. SHAH, J) (A.Y. KOGJE, J) SHITOLE