HIGH COURT OF GUJARAT
Commissioner of Income-tax-IV
Shree Rama Multi Tech Ltd.
TAX APPEAL NO. 235 of 2012
Date of Pronouncement – 18.12.2012
Akil Kureshi, J.
Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal (‘Tribunal’ for short) dated 21.10.2011 raising following questions for our consideration:
“A. Whether the Appellate Tribunal has substantially erred in setting aside the issue of set off of interest income from share application money against public issue expenses?
B. Whether the Appellate Tribunal has substantially erred in setting aside the issue of disallowance u/s.35D of the Act?
C. Whether the Appellate Tribunal has substantially erred in directing to allow the deduction u/s 80IA of the Act on income on account of Exchange rate fluctuation, Excise credit, Kasar/vatav and Excess provision written back of bonus?
D. Whether the Appellate Tribunal has substantially erred ion setting aside the issue of disallowance out of shares and debentures issue expenses?”
2. Considering the issues involved, we have heard learned counsel Ms. Sheth for the Revenue and Senior advocate Shri Soparkar with Shri Bandish Soparkar for the respondent-assessee appearing on caveat who waived notice of final disposal of the appeal.
3. So far as question ‘A’ is concerned, we notice that the Tribunal had in the impugned judgment allowed the benefit of set off of interest income from share application money. The Tribunal followed the decision of this Court in Tax Appeal No.315 of 2010. In the said decision in para 11, this Court had made following observations :
“11. Coming back to the facts of the case, we may reiterate that the assessee was statutorily required to keep share application money in the separate account till the allotment of shares was completed. Interest earned on such separately kept amount was adjusted towards expenditure for raising share capital. We are therefore, of the opinion that interest earned was inextricably linked with requirement of company to raise share capital and was thus adjustable towards the expenditures involved for the share issue. Line of decisions of Apex Court in case of Bokaro Steel Ltd. (supra), Karnal Co-operative Sugar Mills Ltd. (supra) and Bongaigaon Refinary and Petrochemicals Ltd. (supra), would closely match with the facts of the present case. We do not find that tribunal committed any error in confirming the view of CIT(Appeals).”
4. The issue being covered by the said decision, no question of law arises.
5. With respect to question ‘B’, counsel for the Revenue rightly pointed out that the Tribunal remanded the issue for fresh consideration erroneously relying on a remand order passed in Tax Appeal No. 667/05 for the assessment year 2001-02. She pointed out that such issue had reached the Tribunal after a round of remand and full consideration by the Assessing Officer and CIT(Appeals). The Tribunal was, therefore, required to examine the issue on merits and give its decision. Such issue, therefore, shall have to be placed back before the Tribunal for consideration on merits.
6. With respect to question ‘C’, we are of the opinion that the Tribunal has granted certain benefits as claimed by the assessee for deduction under section 80IA of the Act without full discussion. These issues are also placed back before the Tribunal for consideration on merits and disposal by a speaking order. We are informed that while considering the assessee’s claims under section 80IA of the Act, the Tribunal has not given any specific verdict on some of the issues raised at the hands of the assessee in rectification application. We are sure, the Tribunal will consider the same and take steps on such application irrespective of the order in this appeal.
7. With respect to question ‘D’, we notice that the Tribunal has remanded the issue once gain relying on a remand in the case of this very assessee for another year. Here also, the issue had been discussed and decided by the Assessing Officer and the CIT(Appeals) on merits. The Tribunal, therefore, would have to judge issue on merits rather than remanding the issue all over again.
8. Under the circumstances, Tax Appeal is disposed of placing back the issues involved in questions B, C and D before the Tribunal for consideration on merits and disposal afresh in accordance with law. Tax Appeal is disposed of accordingly.