Ferro Alloys Corporation Ltd. vs Commissioner of Income Tax

V.A. Mohta, J.—At the instance of the assessee, the following question of law is referred for the opinion of this court u/s 256(1) of the Income Tax Act, 1961 :

"Whether, on the facts and in the circumstances of the case, the claim for deduction levied u/s 220(2) of Rs. 6,03,168 interest levied u/s 215 of Rs. 1,38,506 and interest levied u/s 201(1A) of Rs. 66,590 was rightly rejected as not allowable u/s 37 of the Income Tax Act, 1961, for assessment year 1976-77 ?"

The assessee was required to pay the following amounts as interest.

Rs. 6,03,168 u/s 220(2).

Rs. 1,38,506 u/s 215, and

Rs. 66,590 u/s 201(1A) of the Income Tax Act. These amounts were claimed as business expenditure u/s 37 of the Income Tax Act. The Income Tax Officer, the Commissioner in first appeal and the Tribunal in second appeal, rejected the said claim as not allowable u/s 37 and it is against the above basic undisputed background that the question has been referred.

The point stands concluded against the assessee by the consistent view of this court right from Aruna Mills Ltd. : [1957]31ITR153(Bom) to Commissioner of Income Tax Vs. Ghatkopar Estate and Finance Corporation (P.) Ltd., . The Delhi High Court in the case of Federal Bank Ltd. Vs. Commissioner of Income Tax, , have also taken the same view. Very fairly, Shri Bhide, learned counsel for the assessee, informs us that there is no decision which has taken a contrary view.

The reference has been made only because the SLP against the Delhi High Court decision in Bharat Commerce and Industries Ltd. Vs. The Commissioner of Income Tax, is pending before the Supreme Court. We see no reason for keeping this reference pending indefinitely for that reason.

Under the circumstances, we record the answer in the affirmative. No order as to costs.