S.K. Sachdeva and Co. vs Commissioner of Income Tax

The following questions of law have been referred for our opinion:- 1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law to hold that the liability amounting to Rs. 19,24,530/- and Rs. 41,06,355/- for assessment years 1980-81 and 81-82 respectively claimed by the assessee on account of interest payable to the Excise authorities was not allowable as a deduction in computing the income of the assessee for the respective assessment years?

Whether on the facts and in the circumstances of the case, the ITAT was right in law in rejecting the alternative contention raised by the assessee that the interest payable to Excise Department was liable to be set off against the interest income in accordance with the provisions contained in Section 57 of the Income Tax Act?

The admitted position is that in view of the decision of the Supreme Court in Mahalaxmi Sugar Mills Co. Vs. Commissioner of Income Tax , Delhi, , the first question is answered in the negative, in favour of the Assesses and against the Revenue. 2. The second question is an alternative question in case the contention of the Assessee is rejected. Under the circumstances, that question does not arise. The reference is disposed of as above.