High Court Of Delhi
CIT vs. MGF India Ltd.
Sections 5, 32(1), 37(1), 260A
B.C. Patel, C.J. & Badar Durrez Ahmed, J.
IT Appeal No. 23 of 2004
19th January, 2004
Counsel Appeared
Sanjeev Khanna, for the Petitioner : O.S. Vajpai with V.N. Jha, for the Respondent
JUDGMENT
By the court :
Mainly three questions have been raised with regard to the claim of higher rate of depreciation on the vehicles given on lease, the taxability of interest of Rs. 72,19,086 on Zero Coupon Bonds as it was shown in the books of accounts of the assessee and the question whether retrenchment compensation paid to workmen would be admissible for the benefits under the IT Act as business expenditure when there was a closure of one type of business of the assessee.
As regards the 3rd question, the assessee was maintaining common books of accounts and funds were common for running different businesses. We were taken through the decisions of the Supreme Court in the cases of CIT vs. Prithvi Insurance Co. Ltd. (1996) 62 ITR (Sh.N) 38/(1967) 63 ITR 632 (SC) and Standard Refinery and Distillery Ltd. vs. CIT (1971) 79 ITR 9 (SC) and Standard Refinery & Distillery Ltd. vs. CIT (1971) 79 ITR 589 (SC) and in view of the apex Court judgment, it would not be possible to say that the Tribunal has committed any error insofar as the allowance of retrenchment compensation as a business expenditure is concerned.
So far as the interest on Zero Coupon Bonds is concerned, it may be stated that the Tribunal has examined the matter in detail and pointed out on facts that interest has not accrued and, in any event, tax will have to be paid by the assessee on the maturity of the bond. It is also interesting to note that these bonds are saleable in the market. So any time these bonds can be disposed of. The Tribunal, in para 4.2, has given reasons and it decided on facts and, therefore, no question of law would arise.
4. So far as depreciation at the higher rate is concerned, we were taken through various decisions to point out that the vehicles were not used by the assessee for the business of running them on hire. We were shown the decisions of the Madras High Court, Bombay High Court and the Delhi High Court. Our attention was also drawn to the decision rendered by Gauhati High Court. Except the Bombay High Court decision, other decisions were considered by the Division Bench of this Court in the case of CIT vs. Bansal Credits Ltd. & Ors. (2003) 179 CTR (Del) 23 : (2003) 259 ITR 69 (Del). However, a detailed examination of these decisions would not be necessary as the Tribunal in the instant case has rendered the decision on facts. Whether vehicles were given on hire or on lease is a question of fact. Again whether the vehicles given on lease were in turn being used for the business of hire is a question of fact. The Tribunal on facts has rendered the decision and held that the assessee was entitled to depreciation at the higher rate. Therefore, no question of law arises for our consideration.
The appeal is dismissed.
[Citation : 272 ITR 191]
