Commissioner of Income Tax vs Essar Projects Ltd.

Delay condoned. Issue notice. Shri Kavin Gulati, learned senior Counsel appears and accepts notice on behalf of the caveator/respondent.

Leave granted.

We have heard learned Solicitor General of India and Shri Kavin Gulati, learned Counsel for the respondent.

The High Court, while dismissing the Income Tax Appeal No. 452 of 2010, by its order dated 28th January, 2013 has answered four questions (a) to (d) in favour of the Assessee/Respondent and against the revenue/appellant. The said questions read as under:

(a) The substantial question of law arises in the present appeal is regarding the true scope and correct interpretation of Section 36 and other provisions of the income tax Act, 1961 and whether on the facts and circumstances of the case and in law the Tribunal is right in allowing the guarantee commission of Rs. 4,84,23,767/- as claimed by the Assessee.

(b) The second substantial question of law arises in the present appeal is regarding the true scope and correct interpretation of Section 43(2) and other provisions of the income tax Act, 1961 and whether on the facts and circumstances of the case and in law the Tribunal is right in dismissing the appeal of the revenue and allowing the loss on revaluation of foreign currency?

(c) The third substantial question of law arises in the present appeal is regarding the true scope and correct interpretation of Section 36(1)(iii) and other provisions of the income tax Act, 1961 and whether on the facts and circumstances of the case and in law, the Tribunal is right in allowing the interest paid on inter-corporate deposits?

(d) The fourth substantial question of law arises in the present appeal is regarding the true scope and correct interpretation of Section 37 and other provisions of the income tax Act, 1961 and whether on the facts and circumstances of the case and in law, the tribunal is right in allowing the enhancement of lease rental of Rs. 1,61,87,500/- as claimed by the Assessee?

Learned Solicitor General of India, on instructions, would submit that the Revenue is not desirous of pressing for answer as regards question No. (b) that was framed and answered by the High Court.

We have looked into questions (c) and (d) framed and answered by the High Court and, in our opinion, those are the questions which have been decided by the Tribunal as well as by the High Court purely on facts. Therefore, we do not intend to entertain those two questions.

Insofar as question No. (a) is concerned, this Court has, in Assessee''s own case, i.e. in Civil Appeal No. 5338 of 2013 titled as "The CIT v. Essar Projects Ltd.", decided on July 8, 2013, has remanded the matter back to the High Court for a fresh disposal in accordance with law. The order passed by this Court is as under:

In our view, the High Court ought not to have been too technical in rejecting the Notice of Motion filed by the Revenue, since the Revenue could not obtain the certified copy of the order passed by this Court well within time.

In that view of the matter, we condone the delay of 24 days in filing the Notice of Motion by the Revenue.

We now request the High Court to dispose of the Income Tax Appeal No. 450 of 2010 on merits, after affording opportunity of hearing to both the parties.

The Civil Appeal is disposed of accordingly. No costs.

In view of the above, we allow this appeal insofar as question No. (a) is concerned and set aside the findings as framed by the High Court on question No. (a) and remand the matter back to the High Court to decide the said question afresh in accordance with law, after affording opportunity of hearing to both the parties. No costs. The Civil Appeal is disposed of accordingly.