COMMISSIONER OF INCOME TAX vs. M/S ESCORTS TRACTORS LTD.

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ITA/90/2005HC DelhiDLHC01059918200504 July 2017Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Delhi held that the question of law framed at the time of admitting the appeal, concerning whether the expenses of Rs. 20,29,470 on account of expenditure on the issue of debentures are to be considered for benefits under Section 37 or Section 35D of the Income Tax Act, 1961, has already been answered in favour of the Assessee and against the Revenue. This decision was rendered by the same Court in the Assessee's own case, specifically in Commissioner of Income Tax v. Escorts Tractors Limited (2009) 2 Taxmann.com 54 (Del.). Consequently, the appeal filed by the Revenue is dismissed based on this pre-existing precedent. No new reasoning or analysis was undertaken by the Court in this instance, as it was bound by its prior ruling.

What were the facts?

The appeal by the Commissioner of Income Tax (Revenue) challenges the order dated 16th July 2004 passed by the Income Tax Appellate Tribunal (ITAT) in ITA No. 6105/Del/1995 for Assessment Year 1992-93. The dispute concerns expenses of Rs. 20,29,470 incurred by Escorts Tractors Ltd (Assessee) on the issue of debentures. The High Court of Delhi admitted the appeal on 3rd January 2005 and framed a specific question of law. The High Court notes that this question has already been decided in favour of the Assessee in the Assessee's own case by a previous decision of the same Court.

What were the issues?

1. Whether the expenses of Rs. 20,29,470 on account of expenditure on the issue of debentures of the company are to be considered for the benefits under Section 37 or under Section 35D of the Income Tax Act, 1961? Assessee's Contention: The Assessee contended that the expenditure on the issue of debentures should be considered for benefits under Section 37 or Section 35D of the Income Tax Act, 1961. (The specific arguments for each section are not detailed in the judgment). Revenue's Contention: The Revenue contended that the expenditure on the issue of debentures should be considered for benefits under Section 37 or Section 35D of the Income Tax Act, 1961. (The specific arguments for each section are not detailed in the judgment). The judgment indicates that the Revenue is challenging the ITAT's decision on this point.

Which sections of the Income-tax Act were involved?

Section 37,Section 35D

AI-generated summary — verify with the full judgment below

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI R-25 +

ITA 90/2005

COMMISSIONER OF INCOME TAX

..... Petitioner Through: Ms. Vibhooti Malhotra, Advocate.

versus

ESCORTS TRACTORS LTD

.... Respondent Through: Mr. Simran Mehta with Ms. Swati R.K. and Mr. Shivank Datta, Advocates.

CORAM: JUSTICE S.MURALIDHAR JUSTICE PRATHIBA M. SINGH

O R D E R %

04.07.2017

1.

This appeal is directed against the impugned order dated 16th July 2004 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 6105/Del/1995 for the Assessment Year 1992-93.

2.

This Court, while admitting this appeal on 3rd January 2005, framed the following question of law for consideration: "Whether the expenses of Rs. 20,29,470 on account of expenditure on the issue of debentures of the company is to be considered for the benefits under Section 37 or under Section 35D of the Income Tax Act, 1961?"

3.

It is not in dispute that the above question now stands answered in favour of the Assessee and against the Revenue by the decision of this Court in the ITA 90/2005

Page 1 of 2

Assessee’s own case in Commissioner of Income Tax v. Escorts Tractors Limited (2009) 2 Taxmann.com 54 (Del.)

4.

The appeal is, accordingly, dismissed.

S.MURALIDHAR, J

PRATHIBA M. SINGH, J JULY 04, 2017 Rm

ITA 90/2005

Page 2 of 2

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