INDUSTRIAL CABLE INDIA LTD. vs. C.I.T. PATIALA

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ITR/91/1996HC Punjab & HaryanaPHHC01035068199623 July 2010Bench: MR. JUSTICE ALOK SINGH,MR. JUSTICE ADARSH KUMAR GOEL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the question of law referred to it had already been decided against the assessee by its previous judgment dated September 20, 2006, in Industrial Cables India Limited v. CIT (2008) 304 ITR 272. Therefore, the Court answered the referred question in favour of the revenue and against the assessee. The principle established in the cited precedent would be that a debt raised from a bank for the purchase of plant and machinery, which remains unpaid during the accounting period, is not to be taken into account for the purpose of allowing deduction under Section 32AB of the Income Tax Act. The reference was disposed of accordingly.

What were the facts?

The assessee, M/s Industrial Cables (India) Limited, is challenging an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, dated July 28, 1995, in ITA No. 636 of 1990. The assessment year in question is 1988-89. The dispute pertains to the deductibility of a debt raised from a bank for the purchase of plant and machinery, which remained unpaid during the accounting period. The High Court of Punjab and Haryana at Chandigarh is considering a reference arising from the ITAT's order.

What were the issues?

1. Whether, on the facts and circumstances of the case, the ITAT was right in law in coming to the conclusion that the debt raised from the bank for the purchase of plant and machinery which remained unpaid during the accounting period, was not to be taken into account for purposes of allowing deduction under section 32AB of the Income Tax Act to the assessee? Assessee's contention: The assessee's counsel pointed out that this specific issue has already been decided against the assessee by a judgment of the High Court dated September 20, 2006, in the case of Industrial Cables India Limited v. CIT, reported in (2008) 304 ITR 272. Revenue's contention: The judgment does not record any specific contention from the revenue, but it is implied that the revenue would have supported the ITAT's order.

Which sections of the Income-tax Act were involved?

Section 32AB

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITR No.91 of 1996 Date of decision: 23.7.2010 M/s Industrial Cables (India) Limited, Rajpura -----Petitioner Vs. The Commissioner of Income Tax, Patiala ----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE ALOK SINGH Present:- Mr. Pankaj Jain, Advocate for the assessee.

Adarsh Kumar Goel,J. Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh Bench, arising out of its order dated 28.7.1995 in ITA No.636 of 1990, for assessment year 1988-89:- “Whether, on the facts and circumstances of the case, the ITAT was right in law in coming to the conclusion that the debt raised from the bank for the purchase of plant and machinery which remained unpaid during the accounting period, was not to be taken into account for purposes of allowing deduction under section 32AB of the Income Tax Act to the assessee?” Learned counsel for the assessee points out that the issue has already been decided against the assessee by judgment of this Court

ITR No.91 of 1996 dated 20.9.2006 in Industrial Cables India Limited v. CIT, (2008) 304 ITR 272. In view of above, the question referred is answered in favour of the revenue and against the assessee. The reference is disposed of accordingly. (Adarsh Kumar Goel) Judge July 23, 2010 (Alok Singh) ‘gs’ Judge 2

ITR No.91 of 1996 3

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