COMMISSIONER OF INCOME TAX- GANDHINAGAR vs. GUJARAT INDUSTRIAL INVESTMENT CORPORATION

O/TAXAP/1449/2005 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1449 of 2005

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE KS JHAVERI

and HONOURABLE MR.JUSTICE K.J.THAKER

================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ COMMISSIONER OF INCOME TAX- GANDHINAGAR....Appellant(s) Versus GUJARAT INDUSTRIAL INVESTMENT CORPORATION....Opponent(s) ================================================================ Appearance: MR SUDHIR M MEHTA, ADVOCATE for the Appellant(s) No. 1 RULE UNSERVED for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Page 1 of 4

O/TAXAP/1449/2005 JUDGMENT

Date : 02/12/2014

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench ‘C’ (hereinafter referred to as ITAT) dated 30.11.2004 in ITA No. 1218/Ahd/03 for the Assessment Year 1992-93, the revenue has preferred the present Tax Appeal. 2. This appeal was admitted on 27.09.2006 for consideration of the following substantial question of law: “Whether, the deductions allowed under section 36(1) (vii) of the Income Tax Act, 1961 are to be deducted for computing the deduction u/s 80M of the Act?” 2.1 The assessee Company had advanced huge sums to its subsidiary companies for projects and no interest was charged on the said amounts whereas the assessee was payinghuge interest on Government loans. The Assessing Officer added the said amount of notional income. On appeal before the CIT(A), the CIT(A) deleted the addition made by Assessing Officer. 2.2 Being aggrieved by the order of the first appellate authority, the revenue preferred appeal before the ITAT and the ITAT vide impugned order dismissed the appeal and confirmed the order passed by CIT(A). Being aggrieved by the said order, the present appeal is filed. Page 2 of 4

O/TAXAP/1449/2005 JUDGMENT 3. The issue involved in the present Tax Appeal is now not res integra in view of the decision of this Court in the case of Deputy Commissioner of Income – tax vs. G.I.I.C. Limited reported in [2010] 325 ITR 597. This Court in the case of very same assessee namely G.I.I.C. in the aforesaid decision has held as under: “6. As can be seen from the facts found concurrently, both by Commissioner (Appeals) and the Tribunal in Assessment Year 1988-89, there was no difference between the gross dividend and net dividend and, therefore, deduction under Section 80M of the Act was allowed on the entire amount of dividend. It was further found that deduction under Section 36 of the Act was available while computing business income under Section 28 of the Act and the said amount viz. the income from which such deduction is available did not fall under the head Income from Other Sources. 7. For the year under consideration, learned advocate for the appellant-revenue was not in a position to point out any distinguishing feature on facts so as to warrant a different view taken from assessee's own case for the year 1988-89. 8. Accordingly, it is held that the Tribunal was justified in holding that deduction under Section 80M of the Act was allowable on gross amount of dividend without deducting the proportionate deduction available under Section 36(i)(viii) of the Act.” 4. Having heard learned advocates for the revenue and the question posed for consideration for us reproduced hereinabove and considering the decisions cited, the question which is raised in the present appeal is required to be answered in favour of the assessee. We are not giving any elaborate reasons for the same as this Court in the case of Page 3 of 4

O/TAXAP/1449/2005 JUDGMENT very same assessee has answered the very same question in favour of assessee. 5. In view of the above, the question raised in the present appeal is answered in favour of the assessee and consequently, the impugned judgment and order passed by the ITAT is confirmed. Hence, the present Tax Appeal is dismissed. (K.S.JHAVERI, J.) (K.J.THAKER, J) divya Page 4 of 4