Madhya Pradesh H.C : The CIT(A) disagreed with the AO and allowed the deduction as claimed by the assessee

High Court Of Madhya Pradesh : Indore Bench

CIT vs. Sanghi Finance & Investment Ltd.

Section 260A

Asst. Year 1995-96

A.M. Sapre & Ashok Kumar Tiwari, JJ.

IT Appeal No. 32 of 2004

21st June, 2004

Counsel Appeared

R.L. Jain, for the Appellant


A.M. Sapre, J. :

This is an appeal under s. 260A of the IT Act, filed by the Revenue (IT Department) against an order, dt. 24th Nov., 2003, passed by the Tribunal, in ITA No. 366/Ind/1998. Heard Shri R.L. Jain, learned counsel for the appellant. Having heard learned counsel for the appellant and having perused record of the case, we find no merit in the appeal. In other words, we have not been able to notice any substantial question of law in the appeal and since the prerequisite to entertain the appeal is not present in the appeal, the same deserves to be dismissed in limine. The dispute in substance relates to deleting the disallowance of Rs. 63,363 in respect of interest-free loan advanced by assessee (respondent herein) to one of its sister-concerns, Techno Cast (P) Ltd. out of their CC loan account. The AO did not allow this deduction and added in the income of the assessee holding that no such loan could be given interest-free. However, the CIT(A) disagreed with the AO and allowed the deduction as claimed by the assessee. This was upheld in appeal by the Tribunal giving rise to filing of this appeal by the Revenue. In our opinion, mere perusal of the impugned order of Tribunal would show (para 8) that even the Departmental counsel conceded that they do not have any case to urge against the assessee. In other words, the impugned order was conceded to by the Departmental Representative against the Revenue. When the appellant themselves concede to the issue then we fail to understand as to why then and on what basis they filed this appeal. When there was no contest on the issue which is now sought to be urged in this appeal then, in our opinion, there is no issue of law that can be said to arise out of the Tribunal’s order.

In our opinion, we do not approve of the practice resorted to by the Departmental Representative to concede the issue of law or even fact before the Tribunal. It is the duty of the Departmental Representative, who appears to defend the interest of Revenue before Tribunal, to see that he places before the Tribunal all facts and legal position to the best of his ability and legal acumen. The object behind is to ensure that interest of Revenue is never allowed to be compromised. It is only when the issue sought to be canvassed is covered by the decision of jurisdictional High Court or Supreme Court, the issue need not be perused. But, in all other cases, the issue must be pursued on facts and in law even if it is decided against the Revenue either at the level of CIT(A) or Tribunal in relation to cases arising out of other assessment years of the same assessee. As in this case, if the Revenue was so keen to pursue the issue involved in the case to this Court, then there was absolutely no reason to give concession by the learned Departmental Representative. Rather he should have argued the issue on the point of law and should have contended that though the issue involved is decided against the Revenue in some other assessment years yet, the same may be reconsidered or it may be dealt with again on merits so that the same can be carried in appeal to High Court. In other words, in such circumstances, the duty of the Departmental Representative is not to concede the issue but to press the issue on facts and in law and invite a categorical finding though against the Revenue so that when the matter is carried in appeal to this Court at the instance of Revenue, this Court is able to examine the issue in its right and proper perspective.

Coming to the facts of the case as observed supra, learned Departmental Representative without any reservation and in explicit terms conceded the issue saying that it is decided in favour of assessee by some order of Tribunal. Having pointed out this, he did not call upon the Tribunal to either reconsider or not to record its concession because Revenue had not accepted the verdict of the Tribunal and wanted to challenge the same in High Court. He should have thus, persuaded the members to at least record all these submissions so that matter could be open for this Court for examination. Be that as it may, we find nothing on record to examine the case either on facts or in law. The Tribunal simply recorded the ground of attack and recorded the concession of Departmental Representative for dismissing the appeal. We do not approve the manner of disposal of case by the Tribunal as also manner of presentation by the Departmental Representative while defending the interest of Revenue. It is nothing but disposal of issue in a most cursory and casual manner leaving this appellate Court in lurch to find out (i) as to in which case the Tribunal passed an order in favour of assessee, (ii) what were the facts of that case, (iii) what was the finding actually recorded in that case, (iv) whether at all, the facts of this case and that of the one referred to and relied upon by the Tribunal were same/identical. Since the impugned order is totally silent on all these material issues; this Court is unable to know the details.

9. In any event, perusal of order of AO and CIT(A) do indicate that the disallowance made by AO was not justified and hence, CIT(A) who allowed the deduction was proper. It was rightly held that transaction in question being genuine, the interest even if not charged from the sister-concern cannot be added in the hands of assessee.We, thus, do not find any issue of law in this case. As a consequence, the appeal fails and is dismissed in limine.

[Citation : 273 ITR 268]

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