COMMR OF INCOME TAX HYD V. M/S.GODAVARI EXPLOSIVES LTD. HYD

ITTA/62/2002

AI Insights

The case involves multiple appeals filed under Section 260-A of the Income Tax Act, 1961, concerning the assessment years 1991-92 to 1993-94. The primary legal question was whether the interest amount, lease rent, and hire charges should be considered as income derived from the industrial undertaking for the purpose of relief under Sections 80-HH and 80-I of the Act. The Revenue argued that the issue was covered by a Supreme Court judgment, while the assessee contended that the tax effect involved was below the prescribed limit for filing appeals, as per CBDT guidelines. The court decided not to proceed with the merits of the case due to the monetary limit on appeals, dismissing the Revenue's appeals without costs.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 679705 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 21-04-2014
• Assessment Year: misc
• Other Referred Cases: PANDIAN CHEMICALS LTD. v. C.I.T., COMMISSIONER OF INCOME TAX vs. SMT. VIJAYA V.KAVEKAR L/H OF LATE VIJAYKMAR B.KAVEKAR, ADDL. COMMISSIONER OF INCOME TAX vs. CHETTINAD CORPORATION (P.) LTD
• Laws Referred To: Income Tax Act, 1961, Sale of Goods Act, 1930
• Result in Favour of: Respondent
• Court: HIGH COURT
• Keywords: Hire charges; Income Tax; Industrial Undertaking; Interest income; Lease Rent; Tax Deductions
• Section: 61; 260-A; 80-I; 80-HH

Judgement Text

"THE HON’BLE SRI JUSTICE G.CHANDRAIAH AND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM I.T.T.A.NO.62 OF 2002, 144 AND 275 OF 2003 COMMON JUDGMENT (Per the Hon’ble Sri Justice Challa Kodanda Ram) In all these appeals filed under Section 260-A of the Income Tax Act, 1961 (for short ‘the Act’), arising from the orders of the Income Tax Appellate Tribunal, the following substantial question of law is raised: Whether on the facts and circumstances of the case, the Tribunal was correct in law, in holding that the interest amount, lease rent and hire charges should be considered as income derived from the industrial undertaking for the purpose of relief under Section 80-HH and 80-I of the Act? 2. All the four appeals relate to the assessment years 1991-92 to 1993-94. 3. The learned counsel for the Revenue would submit that the issue relating to allowability under Sections 80 HH and 80-I of the Act, of interest received on deposits given to the electricity board for the purpose of obtaining power, is squarely covered by the judgment of the Supreme court reported in PANDIAN CHEMICALS LTD. v. C.I.T. [1] . In that view of the matter, the learned counsel for the Revenue would urge that the appeal can be taken up for hearing notwithstanding the fact that the monetary limit prescribed for filing appeal is much below the limit prescribed by the circular issued by Central Board of Direct Taxes (for short ‘C.B.D.T.’). 4. The learned counsel for the assessee would submit that this court in large number of cases, had dismissed the appeal on finding that the tax effect involved in the cases is below the prescribed limit. He would place reliance on the judgment of this court in W.T.A.Nos.24 of 2004 and batch dated 24.1.2014 and also the judgment of the Bombay High Court (Aurangabad Bench) reported in COMMISSIONER OF INCOME TAX vs. SMT. VIJAYA V.KAVEKAR L/H OF LATE VIJAYKMAR B.KAVEKAR[2]. He would also submit that the Apex Court in Pandian Chemicals case (1 supra) had considered only with respect to interest earned by the assessee on the deposit given to electricity department. In the present cases, there are also interest amounts received from the customers on account of delayed payments. He would submit that right to claim interest for the goods supplied on delayed payments, is a right recognized under Section 61 of Sale of Goods Act, 1930 and the interest earned would really be part of the price of the goods. Viewed from that angle, interest received on delayed payments, would necessarily be the income derived from the industrial undertaking and the same would qualify for deductions under Section 80-HH and 80-I of the Act. 5. He would also submit that the lease rents and hire charges are directly attributable to the industrial undertaking and the Tribunal had followed the judgment of the Madras High Court reported in ADDL. COMMISSIONER OF INCOME TAX vs. CHETTINAD CORPORATION (P.) LTD [3] and the said judgment had attained finality, as the same was not challenged before the Supreme Court. Thus, he would plead for dismissal of appeals. 6. Having considered rival submissions, we deem it appropriate not to deal with the contentions and objections raised by the learned counsel for the assessee on merits, as we are inclined to accept his argument with respect to there being a bar on filing appeals on account of the instructions issued by the CBDT in exercise of its power under Section 260-A of the Act, prescribing monetary limits for filing of appeals. 7. In the cases on hand, the amounts claimed as deductions under Section 8-HH and 80-I of the Act are for 1991-92 – Rs.3,70,801-00; 1992-93 – Rs.3,59,450; 1993-94 – Rs.4,79,896-00. The deduction allowable under said sections would be 25 per cent of the amounts mentioned. When we take the maximum amount of Rs.4,79,896/-, the taxable amount i.e., 25% of the said amount, would be Rs.1,19,974/-. This amount is below the monetary limit specified in the circular for filing the appeal. 8. In that view of the matter, without expressing any opinion and leaving the respective contentions raised by the parties for discussion in an appropriate case, we dismiss the appeals of the Revenue. No costs. 9. Miscellaneous petitions pending, if any, shall stand closed. ------------------------------------- G.CHANDRAIAH,J -------------------------------------- CHALLA KODANDA RAM,J DATE:21.04.2014 AVS [1](2003) 262 I.T.R .278 [3] 1981 128 ITR 531 Mad "