DIGVIJAY CEMENT CO. LIMITED V. COMMISSIONER OF INCOME-TAX

ITR/115/1984

AI Insights

The case involves Digvijay Cement Co. Limited, the petitioner, contesting decisions made by the Income Tax Appellate Tribunal regarding deductions claimed under the Income Tax Act, 1961. The Tribunal had denied the assessee's claim for a weighted deduction on expenses amounting to Rs. 3,94,68,062 related to 27 items, and also denied the claim for interest of Rs. 30,116 paid under Section 220(2) of the Act as a revenue deduction. The High Court, referencing several precedents, upheld the Tribunal's decisions.

• Counselvise Citation: [1997] 140 COUNSELVISE.COM (IT) 695220 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 31-01-1997
• Assessment Year: misc
• Other Referred Cases: Isabgul Export Corpn. Vs. CIT - 200 ITR 797, Parshuram Pottery Works Co.Ltd. Vs. CIT - 204 ITR 458, Isabgul Export Corpn. Vs. CIT - 205 ITR 227, Testeels Ltd. Vs. CIT - 205 ITR 230, CIT Vs Geskets and Radiators Pvt.Ltd. - 192 ITR 509, Saurashtra Cement and Chemical Industries Ltd. Vs. CIT - 213 ITR 523
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: BHARAT SHELAT; MANISH BHATT
• Assessee Lawyers: D A MEHTA; R K PATEL; B D KARIA
• Keywords: Expenses; Interest; Revenue deduction; Weighted deduction
• Section: 35B; 220(2)

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 115 of 1984 For Approval and Signature: Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE R.BALIA. ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements? 2. To be referred to the Reporter or not? 3. Whether Their Lordships wish to see the fair copy of the judgement? 4. Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? -------------------------------------------------------------- DIGVIJAY CEMENT CO. LIMITED Versus COMMISSIONER OF INCOME-TAX -------------------------------------------------------------- Appearance: MR D.A. MEHTA, MR R.K. PATEL, MR. B.D. KARIA For MR KC PATEL for Petitioner MR BHARAT J. SHELAT, Instructed by MR. MANISH R BHATT for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE R.BALIA. Date of decision: 31/01/97 ORAL JUDGEMENT (Per R.K.Abichandani,J.) The Income Tax Appellate Tribunal has referred for the opinion of this Court the following two questions:- 1. \"Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was not entitled to weighted deduction u/s 35B of the I.T Act, 1961 on expenses of Rs. 3,94,68,062/- covering 27 items mentioned in paragraph 5 of its order under reference?\" 2. \"Whether on the facts and in the circumstances of the case, the Tribunal was further justified in holding that the appellant was not entitled to interest of Rs. 30,116/- paid under Sec. 220(2) of the Act, as a revenue deduction?\" As regards question No.1, it has been pointed out by the learned Counsel for the assessee that all the 27 items mentioned therein are covered by various decisions of this Court against the assessee (Isabgul Export Corpn. Vs. CIT - 200 ITR 797; Parshuram Pottery Works Co.Ltd. Vs. CIT - 204 ITR 458; Isabgul Export Corpn. Vs. CIT - 205 ITR 227; Testeels Ltd. Vs. CIT - 205 ITR 230; CIT Vs Geskets and Radiators Pvt.Ltd. - 192 ITR 509; and Parshuram Pottery Works Co.Ltd. Vs. CIT - 204 ITR 458). Applying the ratio of these decisions, we hold that the Tribunal was justified in holding that the assessee was not entitled to weighted deduction under Section 35B of the Act on the expenses covered by the 27 items mentioned in the said question. The question No.1 is therefore, answered in the affirmative against the assessee. As regards question No.2, it is pointed out by the learned Counsel for the assessee that the question is covered by the decision of this Court in Saurashtra Cement and Chemical Industries Ltd. Vs. CIT - 213 ITR 523. Following the said decision, we hold that the Tribunal was justified in holding that the assessee was not entitled to interest of Rs.30,116/- paid under Section 220(2) of the Act as revenue deduction. The question No.2 is therefore answered in the affirmative against the assessee. The reference stands disposed of accordingly. --- "