DIGVIJAY CEMENT CO. LIMITED vs. COMMISSIONER OF INCOME-TAX

ITR/115/1984HC GujaratGJHC24011789198431 January 1997Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE R.BALIA2 pages
AI SummaryDismissed

What were the facts?

This case involves an Income Tax Reference made by the Income Tax Appellate Tribunal (ITAT) to the High Court of Gujarat at Ahmedabad. The reference pertains to the assessment of Digvijay Cement Co. Limited against the Commissioner of Income-tax. The ITAT sought the High Court's opinion on two specific questions of law arising from its order. The assessee, Digvijay Cement Co. Limited, is the petitioner, and the Commissioner of Income-tax is the respondent. The judgment does not specify the assessment year(s) or the amount in dispute beyond the figures mentioned in the questions.

What did the High Court hold?

The High Court addressed the two questions referred by the Tribunal. Regarding the first question, concerning the weighted deduction under Section 35B on expenses of Rs. 3,94,68,062/-, the Court noted the assessee's submission that the 27 items were covered by previous High Court decisions. Applying the ratio of these cited cases, the Court held that the Tribunal was justified in denying the weighted deduction. The question was answered in the affirmative, against the assessee. For the second question, regarding the deductibility of interest of Rs. 30,116/- paid under Section 220(2) as a revenue deduction, the Court acknowledged the assessee's argument that this was covered by the High Court's decision in Saurashtra Cement and Chemical Industries Ltd. Vs. CIT. Following this precedent, the Court held that the Tribunal was justified in disallowing the interest as a revenue deduction. This question was also answered in the affirmative, against the assessee. The reference was disposed of accordingly.

What were the issues?

The Tribunal referred two questions for the opinion of the High Court: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was not entitled to weighted deduction under Section 35B of the Income Tax Act, 1961, on expenses of Rs. 3,94,68,062/- covering 27 items. 2. Whether, on the facts and in the circumstances of the case, the Tribunal was further justified in holding that the appellant was not entitled to interest of Rs. 30,116/- paid under Section 220(2) of the Act, as a revenue deduction. Assessee's Contentions: For question 1, the assessee's counsel pointed out that the 27 items were covered by various decisions of the High Court against the assessee, including Isabgul Export Corpn. Vs. CIT (200 ITR 797), Parshuram Pottery Works Co.Ltd. Vs. CIT (204 ITR 458), Isabgul Export Corpn. Vs. CIT (205 ITR 227), Testeels Ltd. Vs. CIT (205 ITR 230), CIT Vs Geskets and Radiators Pvt.Ltd. (192 ITR 509), and Parshuram Pottery Works Co.Ltd. Vs. CIT (204 ITR 458). For question 2, the assessee's counsel contended that the issue was covered by the decision of the High Court in Saurashtra Cement and Chemical Industries Ltd. Vs. CIT (213 ITR 523). Revenue's Contentions: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 35B,Section 220(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 115 of 1984

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE R.BALIA. ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge?

The order continues below.

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