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Bombay High CourtIndian Cases

Ferro Alloys Corporation Ltd. vs Commissioner Of Income-Tax on 2 December 1991

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Bombay High Court
Ferro Alloys Corporation Ltd. vs Commissioner Of Income-Tax on 2 December, 1991
Equivalent citations: [1992]196ITR406(BOM)

V.A. Mohta, J.

1. At the instance of the assessee, the following question of law is referred for the opinion of this court under section 256(1) of the Income-tax Act, 1961 :

“Whether, on the facts and in the circumstances of the case, the claim for deduction levied under section 220(2) of Rs. 6,03,168 interest levied under section 215 of Rs. 1,38,506 and interest levied under section 201(1A) of Rs. 66,590 was rightly rejected as not allowable under section 37 of the Income-tax Act, 1961, for assessment year 1976-77 ?”
2. The assessee was required to pay the following amounts as interest.

Rs. 6,03,168 under section 220(2).

Rs. 1,38,506 under section 215, and Rs. 66,590 under section 201(1A) of the Income-tax Act. These amounts were claimed as business expenditure under section 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 under section 37 and it is against the above basic undisputed background that the question has been referred.

3. The point stands concluded against the assessee by the consistent view of this court right from Aruna Mills Ltd. [1957] 31 ITR 153 to CIT v. Ghatkopar Estate and Finance Corporation (P) Ltd. [1989] 177 ITR 222 (Bom). The Delhi High Court in the case of Bharat Commerce Industries Ltd. v. CIT [1989] 180 ITR 37, 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.

4. The reference has been made only because the special leave petition against the Delhi High Court decision in Bharat Commerce Industries Ltd.’s case [1985] 153 ITR 275 is pending before the Supreme Court. We see no reason for keeping this reference pending indefinitely for that reason.

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