COMMISSIONER OF INCOME TAX vs. SHREE DIGVIJAY CEMENT CO. LTD.

Facts

The Revenue has appealed against an order dated 14.06.2005 passed by the Income-tax Appellate Tribunal (ITAT), Rajkot Bench, for Assessment Year 1994-95. The ITAT had dismissed the Revenue's appeal, upholding an order of the CIT(A) which had allowed the assessee's appeal against the Assessing Officer's assessment order. The Assessing Officer had disallowed depreciation claimed on two units due to suspended production. The present appeal concerns the deletion of a disallowance made under Section 43B in respect of interest on proforma credit under Central Excise Rules, amounting to Rs. 57,70,426/-.

Held

The High Court held that the issue was identical to one previously decided by the same Court in Tax Appeal No. 1093/2005, where the Court had answered the reference against the revenue and in favour of the assessee. The Court also referred to a similar view taken in Tax Appeal No. 1917 of 2005 dated 13.11.2014. Therefore, for the same reasons, the Court answered the substantial question of law in favour of the assessee and against the Revenue. The disallowance made under Section 43B in respect of interest on proforma credit under Central Excise Rules amounting to Rs. 57,70,426/- was deleted. The appeal was dismissed.

Key Issues

1. Whether the Appellate Tribunal is right in law and on facts in deleting the disallowance made under section 43B in respect of interest on proforma credit under Central Excise Rules amounting to Rs. 57,70,426/-? Assessee's Contentions: The judgment does not record specific contentions made by the assessee. However, the fact that the CIT(A) allowed the appeal and the ITAT upheld it suggests the assessee argued against the disallowance. Revenue's Contentions: The Revenue contended that the disallowance made under Section 43B in respect of interest on proforma credit under Central Excise Rules was justified. They are challenging the ITAT's deletion of this disallowance.