Gujarat H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee is entitled to deduction of Rs. 30 lacs under s. 32AB of the IT Act, 1961?

Counsel Appeared

Manish R. Bhatt, for the Petitioner : B.P. Gupta, for the Respondent

ORDER

BY THE COURT :

By preferring these two applications, the CIT has requested the Court to direct the Tribunal to refer the questions to this Court.

2. The CIT raised one question in IT Appln. No. 66 of 1999 which is as under : “Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee is entitled to deduction of Rs. 30 lacs under s. 32AB of the IT Act, 1961?”

3. The CIT raised 3 questions in IT Appln. No. 71 of 1999 which are as under :

“1. Whether, the Appellate Tribunal is right in law and on facts in confirming the order passed by learned by CIT(A) and deleting the interest of Rs. 76,64,412 on account of interest from advance made to the sister concerns, other than for business purposes?

2. Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by learned CIT(A) holding that provisions of s. 43B of the IT Act, 1961, is not applicable?

3. Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee is entitled to deduction of Rs. 30 lacs under s. 32AB of the IT Act, 1961?

The question No. 3 of IT Appln. No. 71 of 1999 and the only question in IT Appln. No. 66 of 1999 beingcommon, we first deal with the common questions. It appears to us that on the facts pleaded before the Tribunal to the effect that the amount was deposited under s. 32AB of the IT Act, 1961, the Tribunal accepted the same i.e, the amount deposited in time as contemplated under s. 32AB of the Act.

4. Mr. Naik, learned, counsel for the Department, makes a statement at the Bar that the assessee successfully moved the Bank of Baroda and as the assessee has the account with the Bank of Baroda, the said Bank has obliged the assessee by writing the letter to the IDBI and in turn the IDBI, has also obliged the assessee by issuing a receipt as if the amount was accepted on 25th Sept., 1989. Mr. Naik submitted that the amount was not received on that date but it was received almost after a month. Suffice it to say that about the allegations, nothing in writing is placed before the Court and only an oral statement is made; where, in fact the Bank of Baroda which is a Government undertaking was instructed by the assessee to transmit the amount to another bankers (IDBI for short hereafter) of the Government so as to enable IDBI to issue a receipt in accordance with the provisions contained in Investment Deposit Account Scheme, 1986. The Bank of Baroda, failed to transmit the amount to IDBI, as instructed by the assessee it cannot be said that the assessee has failed to make payment. It is not the case that the Bank of Baroda, did not receive such instructions. It may be that because of banker’s negligence, the amount was not transmitted in time. As a matter of fact, realising the fact that the amount has not been transmitted under instructions, correspondence ensued between the assessee and the Bank of Barrda and between the Bank of Baroda and IDBI. On considering the fact that the mistake was committed by the Bank of Baroda and it agreed to pay the interest to IDBI, on receiving the amount with interest, IDBI, issued a receipt as if the amount was received on 25th Sept., 1989. Thus, the assessee produced the receipt before the authority and pleaded that the amount was deposited on 25th Sept., 1989. Before us Mr. Naik submitted that it was the duty of the assessee to see that a cheque or a draft is submitted before the IDBI and it was also the duty of the IDBI to issue areceipt against the cheque or draft. As per the rule, receipt is required to be produced indicating that the amount has been received on a particular date and the Tribunal on facts held that such receipt was produced and accepted the contention raised by the assessee and rejected the contention raised by the Revenue. The CIT(A) while allowing the appeal considered the decision of this Court in the case of Indulal Kanji Parekh vs. CIT (1986) 153 CTR (Guj) 186 : (1987) 163 ITR 102 (Guj) TC 39R.448. Even the CIT(A) accepted the contention raised by the assessee. The CIT(A) and the Tribunal, on the material placed on record, arrived at a conclusion which is based on facts of the case.

5. If it was pleaded before the CIT(A) or the Tribunal or even before us that the assessee has by following dubious method managed to obtain a receipt from the IDBI, the matter would have been quite different. Mere statement is not sufficient. Thus, in view of the peculiar facts and circumstances of the case, the Tribunal has taken the particular view and therefore, we do not find any reason to interfere with. So far as the question No. 2 raised in IT Appln. No. 71 of 1999 is concerned, Mr. Naik has rightly not pressed this question stating that the same is not necessary in view of the fact that the High Court has received the contention of the Department.

So far as question No. 1 in IT Appln. No. 71 of 1999 is concerned, it relates to the order passed by the CIT(A) deleting interest of Rs. 76,64,412 on account of interest-free advances made to the sister concerns. In our opinion, the same is based on facts of the case. Since in the asst. yr. 198788 the assessee was granted benefit, as there was a change in the system of accounting year. On facts, the Tribunal has not accepted the contention and we also do not find any merit in the same. Hence, the applications are rejected.

[Citation : 252 ITR 197]