COMMISSIONER OF INCOME TAX,LDH vs. M/S VARINDER AGRO CHEM
What did the High Court hold?
The High Court held that the issue raised in the appeal had been decided by the same Court in the case of Commissioner of Income Tax-I, Ludhiana v. M/s Abhishek Industries Limited, Ludhiana (2006) 286 ITR 1 (P&H). In that judgment, the Court had considered the issue at length and answered the question in favour of the revenue and against the assessee. The High Court noted that this order had been followed in the assessee's own case for a different assessment year. Therefore, following the precedent set in the Abhishek Industries Limited case, the High Court answered the substantial question of law in favour of the revenue and against the assessee. The appeal was allowed.
What were the facts?
The Revenue, Commissioner of Income-tax (Central), Ludhiana, filed an appeal before the High Court of Punjab and Haryana at Chandigarh against an order dated 25.07.2001 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench-B. The ITAT had deleted a disallowance of Rs.37,17,550/- made by the Assessing Officer on account of interest on interest-free advances given by the assessee, M/s Varinder Agro Chemicals Ltd., Ludhiana, to its sister concerns for non-business purposes. The assessment year in dispute is 1991-92. The High Court noted that the order of the ITAT for a different assessment year in the assessee's own case had been followed.
What were the issues?
1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in deleting the disallowance of Rs.37,17,550/- made on account of interest on Interest Free Advances given to the sister-concerns for non-business purposes? (Question of law) Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. Revenue's Contention: The Revenue contended that the ITAT erred in deleting the disallowance of interest on interest-free advances given to sister concerns for non-business purposes.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER: This appeal has been preferred by the revenue against the order dated 25.07.2001 of Income Tax Appellate Tribunal, Chandigarh Bench-B, Chandigarh in I.T.A. No.225/Chandi/95 in respect of the assessment year 1991-92 proposing following substantial question of law:- “Whether on the facts and in the circumstances of the case, the ITAT was right in law in deleting the disallowance of Rs.37,17,550/- made on account of interest on Interest Free Advances given to the sister-concerns for non-business purposes?” The question referred has been gone into by this Court in Commissioner of Income Tax-I, Ludhiana v. M/s Abhishek Industries Limited, Ludhiana (2006) 286 ITR 1 (P&H) and after considering the issue at length, the question has been answered in favour of the revenue and against the assessee.
It is not disputed that in the case of the assessee also, the said order has been followed for a different assessment year.
Following the above judgment, we answer the question raised in favour of the revenue and against the assessee.
Accordingly, the appeal is allowed ( ADARSH KUMAR GOEL ) JUDGE November 07, 2006 ( RAJESH BINDAL ) ashwani JUDGE
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