THE COMMISSIONER OF INCOME-TAX vs. M/S JSW STEEL LIMITED

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 13TH DAY OF FEBRUARY 2020 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND

THE HON’BLE MR. JUSTICE RAVI V. HOSMANI

ITA No.385/2010

BETWEEN:

(By Sri. K.V Aravind, Advocate )

AND: M/s JSW Steel Limited, (Formerly known as Jindal Vijayanagar Steel Limited) Jindal Mansion, 5A, Dr. G Deshmukh Marg. Mumbai 40026 …RESPONDENT

(By Sri. A Shankar, Senior Advocate, a/w Sri Venkatesh K Pani, Advocate)

THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 31.5.2010 PASSED IN ITA NO.931/BANG/2009,FOR THE ASSESSMENT YEAR 2005-2006.

THIS APPEAL COMING ON FOR FINAL HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:

JUDGMENT

Sri. K.V. Aravind , learned counsel for the revenue.

Mr. A Shankar, learned senior counsel along with Mr. Venkatesh K Pani, learned counsel for the respondent.

This appeal, under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’ for short) has been filed by the revenue, which was admitted by a Bench of this Court vide order dated 26.03.2012 on the following substantial questions of law:

“1. Whether the Appellate Authorities were correct in holding that the amount of Rs.29,94,876/- an inter -corporate deposit paid to M/s Sky Build Pvt. Ltd., should be written off as an expenditure when this deposit was not advanced in the course of the business of the assessee of manufacture of steel etc., and the interest income earned in the earlier

3 years was assessed under the head “income from other sources”? 2) Whether the Appellate Authorities were correct in relying on the order passed or the earlier assessment year in granting relief to the assessee without examining the facts of the present case had applying the legal position to it?

4 3. The Commissioner of Income - Tax(Appeals)-I by an order dated 10.07.2009 inter-alia held that the Income Tax Appellate Tribunal in the case of the assessee itself for the earlier assessment year has held that the amount was liable to be allowed. The aforesaid order was challenged before the Income Tax Appellate Tribunal. The Tribunal by an order dated 31.05.2010 affirmed the order passed by the Income Tax Appellate Tribunal. In that factual back ground, this appeal has been filed by the revenue.

5 6. We have considered the submissions made by the learned counsel for the parties. It is pertinent to mention here that the Income Tax Appellate Tribunal Bengaluru Bench in the assessee’s case for the assessment year 1995-96 by an order dated 12.11.2002 held that the Memorandum of Association of the assessee company enables it to carry on the business of investment for inter-corporate deposits and the assessee has indulged in such business by virtue of special resolution passed by the shareholders as required by the Company’s Act. Therefore, the submission made on behalf of the assessee that the loss was in the nature of business loss was accepted. It was further held that the amount of inter-corporate deposits written off by the assessee was entitled for deduction in computing the taxable income. The aforesaid decision was upheld by a Division Bench of this Court by an order dated 17.08.2011 passed in ITA No.150/2003 and was answered against the revenue.

6 questions of law framed by a Bench of this Court are answered against the revenue and in favour of the assessee.

In the result, the appeal fails and is hereby dismissed.

Sd/- JUDGE

Sd/-

JUDGE

Psg*