PR. COMMISSIONER OF INCOME TAX, DELHI - 8 vs. M/S SAMTEL MACHINES AND PROJECTS LTD. (EARLIER KNOWN AS M/S TELETUBE ELECTRONICS LTD.)

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ITA/476/2018HC DelhiDLHC01100637201822 October 2018Bench: HON'BLE MR. JUSTICE SANJIV KHANNA1 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose in view of the accepted factual position that the assessee had not earned any exempt income in the assessment years in question. The Court relied on its own decision in ITA No. 725/2018, Principal Commissioner of Income Tax-6, New Delhi Vs. Mcclonald's India Private Limited. Consequently, the appeals filed by the Revenue were dismissed. The operative direction was the dismissal of the appeals. No issue was left undecided.

What were the facts?

The appeals were filed by the Principal Commissioner of Income Tax, Delhi - 8, against M/s Samtel Machines and Projects Ltd. (earlier known as M/s Teletijbe Electronics Ltd.) for assessment years 2008-09 and 2009-10. The appeals challenged orders passed by the Income Tax Appellate Tribunal (ITAT). The Revenue accepted that the assessee had not earned any exempt income in the assessment years in question. This factual acceptance was crucial to the decision.

What were the issues?

1. Whether, in the absence of any exempt income earned by the assessee, the disallowance of interest expenses under Section 36(1)(iii) of the Income Tax Act, 1961, was justified. The Revenue contended that since no exempt income was earned, the interest expenditure incurred for general business purposes, which could potentially be used for earning exempt income, should not be disallowed. The assessee argued that the disallowance was not warranted as the funds borrowed were for general business purposes and no exempt income was actually earned. The judgment notes that the Revenue accepted the factual position that the assessee had not earned any exempt income.

Which sections of the Income-tax Act were involved?

Section 36(1)(iii)

AI-generated summary — verify with the full judgment below

r* i $-17 and 18 IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 476/2018 and 477/2018 PR. COMMISSIONER OF INCOME TAX, DELHI - 8 Appellant Through: Mr. Zohob Hossain, Sr. Standing Counsel for Revenue. versus M/S SAMTEL MACHINES AND PROJECTS LTD. (EARLIER KNOWN AS M/S TELETIJBE ELECTRONICS LTD.).. Respondent Through ITA No. 4467 & 4468/Del/2016 [Assessment Year-2008-09 &2009-10] ITA No. 4467 & 4468/Del/2016 [Assessment Year-2008-09 &2009-10] CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI ORDER % 22.10.2018 Learned counsel for the Revenue accepts that the assessee had not earned any exempt income inthe Assessment Years in question. In view of the aforesaid accepted factual position, no substantial question of law arises, in view of our decision of even dale in ITA No.725/2018, Principal Commissioner ofIncome Tax-6, New Delhi Vs. Mcclonald's India Private Limited. The present appeals are accordingly dismissed, with no order as to costs. OCTOBER 22, 2018/MR -K SANJIV KHANNA, J. W •• ANUP JAII^M BHAMBHANI, J. Signed By:RAM DATT Signing Date:09.10.2024 15:41 Certify that the digital and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified

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