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

Facts

The Revenue has appealed against the judgment and order dated 28.06.2005 passed by the Income-tax Appellate Tribunal (ITAT), Rajkot Bench, for Assessment Year 1992-93. The ITAT had dismissed the Revenue's appeal, upholding the order of the Commissioner of Income-tax (Appeals) [CIT(A)]. The dispute arose from the Assessing Officer's disallowance of depreciation claimed on two units where production was suspended. The CIT(A) had allowed the assessee's appeal against this disallowance. The Revenue's present appeal to the High Court challenges the ITAT's decision to delete the disallowance made under Section 43B concerning interest on proforma credit under Central Excise Rules.

Held

The High Court, while admitting the appeals, had framed a substantial question of law regarding the deletion of disallowance under Section 43B concerning interest on proforma credit under Central Excise Rules. The Court noted that an identical issue had been considered in a previous case, Tax Appeal No. 1093/2005. In that prior judgment, the Court had answered the reference against the Revenue and in favour of the assessee. Therefore, for the same reasons, the High Court held that the question in the present tax appeal should also be answered in favour of the assessee and against the Revenue. The appeals were accordingly 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? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. Revenue's Contention: The Revenue contends that the disallowance made under Section 43B in respect of interest on proforma credit under Central Excise Rules was wrongly deleted by the Tribunal. The Revenue's appeal is based on this ground.