High Court Of Delhi
Jay Bharat Maruti Ltd. vs. CIT
Section 37, 43B, 80-I
Asst. Year 1995-96
Badar Durrez Ahmed & Siddharth Mridul, JJ.
IT Appeal 628 of 2009
17th February, 2010
Counsel Appeared :
Santhanam, for the Appellant : Sanjeev Sabharwal, for the Respondent
JUDGMENT
BADAR DURREZ AHMED, J. :
We have heard the counsel for the parties. The assessee is in appeal before us against the order of the Tribunal dt. 15th April, 2004 in respect of the asst. yr. 1995-96. One of the issues sought to be raised is with regard to the deduction claimed by the assessee under s. 80-I of the IT Act, 1961 (hereinafter referred to as ‘the said Act’) on interest received on letters of credit and bank guarantee money. A similar claim has been made by the assessee in respect of the interest earned on deposits, under Sales-tax Rules, in Kisan Vikas Patras, interest received on income-tax refund as also the interest received on inter-corporate deposits. The Tribunal has decided these issues against the assessee and, therefore, the assessee is in appeal before us. We may straightaway say that these issues no longer survive after the decision of this Court in CIT vs. Shri Ram Honda Power Equip & Ors. (2007) 207 CTR (Del) 689 : (2007) 289 ITR 475 (Del), wherein the said issue has been decided in favour of the Revenue and against the assessee. Consequently, these issues do not arise any further and the decision of the Tribunal is correct.
The second aspect of the matter is with regard to travelling expenses, which have been incurred by the assessee in connection with the purchase of some plant and machinery. The AO had claimed these expenses on the revenue account. However, the AO treated the same as ‘capital expenditure’ and disallowed the same. This was upheld by the CIT(A) as well as by the Tribunal. The Tribunal held the said expenditure to be directly connected with the purchase of the plant and machinery and, therefore, the same was to be treated as capital expenditure. We see no reason to interfere with this finding.
The third issue sought to be canvassed before us pertains to the deduction claimed under s. 43B of the said Act. The said amount was disallowed by the AO but allowed by the CIT(A) and was confirmed by the Tribunal. The Tribunal, while considering the appeal of the Revenue on this aspect of the matter, rejected the Revenue’s contention and upheld the views of the CIT(A) that the petitioner was entitled to deduction under s. 43B of the said Act. The Tribunal, after following the decision of the Supreme Court in the case of Berger Paints India Ltd. vs. CIT (2004) 187 CTR (SC) 193 : (2004) 266 ITR 99 (SC), concluded that the details of the additions of the said amount of Rs. 51,06,391 on account of excise duty paid by the assessee was correct. The Tribunal, however, went further to observe that as the said amount of Rs. 51,06,391 was also loaded on the closing stock of the year in question, the opening stock of the succeeding year would have to be reduced so as to avoid a double deduction.
4. The learned counsel for the appellant submitted that a rectification application had been moved before the Tribunal being Misc. Appln. No. 404/Del/2004, inter alia, pointing out that the Tribunal had committed a mistake in directing the AO to reduce the amount of excise duty from the opening stock of the next year, while allowing the deduction of Rs. 51,06,391 on account of excise duty paid. However, the Tribunal, by its order dt. 31st Aug., 2005, rejected the contention of the appellant/assessee and once again observed that if the amount had been loaded on the closing stock, in order to aid double deduction, the direction was necessary. Now, before us, the learned counsel for the appellant/assessee submits that the finding of the Tribunal that the sum of Rs. 51,06,391 had been loaded on the closing stock is factually incorrect and, therefore, there was no need for deducting the said sum from the opening stock of the succeeding year. We feel that this aspect of the matter can be adequately addressed by directing the AO to verify as to whether the said amount of excise duty paid during the year had been loaded on the closing stock or not. In case it was loaded, then the observations of the Tribunal would stand. However, if it was not so loaded, then there would be no need for reducing the said amount from the opening stock of the succeeding year.
In view of the foregoing discussion, we find that no other issue remains to be considered by us. The appeal stands disposed of in terms of the observations made above as also the direction to the AO.
[Citation : 322 ITR 599]
