High Court Of Punjab & Haryana
Bhuna Co-Operative Sugar Mills Ltd. vs. CIT
Sections 43B(d), 143(1)(a), 143(1A)
Asst. Year 1992-93, 1993-94
N.K. Sodhi & V.M. Jain, JJ.
IT Appeal Nos. 80 & 81 of 2002 & Civil Writ Petn. Nos. 6182 & 6372 of 2003
19th September, 2003
B.S. Gupta with Sanjay Bansal, for the Appellant : A.S. Tewatia, for the Respondent
N.K.Sodhi, J. :
This order will dispose of two IT Appeal Nos. 80 and 81 of 2002 pertaining to the asst. yrs. 199293 and 1993-94 and also two Civil Writ Petitions Nos. 6182 and 6372 of 2003 which also pertain to the same assessment years, as common questions are involved in all these cases. For the sake of convenience, the facts are being taken from IT Appeal No. 80 of 2002 ?. This appeal under s. 260A of the IT Act, 1961 (for short the Act) is directed against the order dt. 28th Sept., 2001, passed by the Tribunal whereby the appeal filed by the Department was allowed and the order of the CIT(A) set aside and that of the AO restored. Petitioner filed its return of income-tax for the asst. yr. 1992-93 under s. 139(1) of the Act, declaring a loss of Rs. 6,95,63,045.72 paise. While computing the loss declared in the return a sum of Rs. 1,48,382,63.88 was claimed as interest which was payable to the creditors and a deduction to this effect was claimed in the return. The AO while completing the assessment disallowed the deduction thereby reduced the loss to Rs. 5,47,23,782. He also imposed additional tax to the tune of Rs. 11,62,502 under s. 143(1A) of the Act as it then stood. The AO disallowed the deduction under s. 43B of the Act because the assessee had not filed any proof of actual payment of interest to the creditors. The AO was of the view that the deduction under s. 43B of the Act could be claimed only on actual proof of payment of the interest to the creditors. Feeling aggrieved by the order of the AO, the assessee filed an appeal before the CIT(A) which was allowed on 8th Feb., 1995. The CIT(A) allowed the deduction as claimed by the assessee placing reliance on the circular issued by the CBDT to the effect that actual proof of payment could be produced subsequent to the filling of the income-tax return provided the interest had actually been paid to the creditors. The Department felt aggrieved by the appellate order of the CIT and filed an appeal before the Tribunal.
This appeal was allowed by the Tribunal by its order, dt. 28th Sept., 2001. The Tribunal held that the AO while processing the return had to form an opinion about the admissibility or non-admissibility of the claim of the assessee on the basis of legal position as well as the material of evidence enclosed with the return and that he cannot travel beyond the return filed by the assessee. The Tribunal also found that law requires that the assessee should furnish with its return evidence of actual payment of interest to the creditors before a deduction could be claimed under s. 43B. Since the amount was shown in the return as payable to the creditors, the Tribunal held that such an adjustment could be made by the AO by deleting the deduction claimed by the assessee. Accordingly, the order passed by the AO was restored and that of the CIT(A) set aside. It is against this order that the present appeal has been filed by the assessee. We have heard the learned counsel for the parties and are of the view that there is no merit in the appeal. The argument of Mr B.S. Gupta the learned senior counsel appearing for the assessee is that the provisions of s. 43B of the Act are not attracted to the case because from the documents attached with the income-tax return, it could not be inferred as to who were the creditors to whom the interest was payable and, therefore, the AO and the Tribunal were in error in disallowing the deduction claimed by the assessee. Having given our thoughtful consideration to this argument, we are unable to accept the same. A perusal of the order passed by the Tribunal would make it clear that no such plea was raised at any stage of the proceedings. It was never the case of the assessee that the creditors to whom the interest was payable did not answer the description of cl. (d) of s. 43B .Since no such question was ever raised, the same cannot be allowed to be raised for the first time in appeal before this Court. All the authorities below proceeded on the assumption that the creditors to whom the interest was payable were the public financial institutions referred to in cl. (d) of s. 43B of the Act. According to this section deduction can be claimed only if the interest had actually been paid to the creditors during the previous year relevant to the assessment year. In the case before us, the assessee itself has shown in the return that the amount of interest was payable to the creditors. This being so, the AO was justified in accepting the return as it was and making an adjustment under s. 143(1)(a) of the Act disallowing the deduction claimed by the assessee. In our view, the Tribunal was right in upholding the order of the AO.
After the Tribunal passed the order on 28th Sept., 2001, upholding the order of the AO, the latter passed an order dt. 18th March, 2002, calling upon the assessee to make payment of additional tax levied under s. 143(1A) of the Act. The assessing authority also issued a notice of demand under s. 156 of the Act and these have been challenged by the assessee in CWP 6372 of 2003. Since the order of the Tribunal has been upheld by us, the tax levied has to be paid by the assessee and, therefore, there is no scope for this Court to interfere with the notice of demand issued by the AO. In the result, the appeals and the writ petitions stand dismissed.
[Citation : 267 ITR 759]