Case Law Details
CIT Vs Maharashtra Hybrid Seeds Co. Ltd. (Bombay High Court)
The Bombay High Court allowed the deduction on interest paid on the amount borrowed for the purpose of machinery even if machinery is not actually used in business.
The revenue has raised the issue Whether on the facts and circumstances of the case and in law, the ITAT was justified in allowing the deduction of interest when assessee, M/s. Maharashtra Hybrid Seeds Co. Ltd. failed the tests of interlacing and entering dependencies unity of control and management – conditions necessary for deduction u/s. 36(1)(iii).
The Revenue’s stand was that deduction for interest under Section 36(1)(iii) of the Act was allowable only if the assets acquired out of the borrowed capital had been put to use. The Apex Court in Deputy Commissioner of Income Tax V/s. Core Health Care Ltd. squarely covers this question and the Apex Court has held that such interest is allowable under Section 36(1)(iii).
The Apex Court has held that interest on monies borrowed for the purposes of business is a necessary item of expenditure in a business. For allowance of a claim for deduction of interest under the said section, all that is necessary is that firstly, the money, i.e., capital, must have been borrowed by the assessee; secondly, it must have been borrowed for the purpose of business; and, thirdly, the assessee must have paid interest on the borrowed amount. The Apex Court has also held that all that is germane is : whether the borrowing was, or was not, for the purpose of business.
FULL TEXT OF THE JUDGMENT/ORDER of BOMBAY HIGH COURT
1. On 9th August 2004 this appeal came to be admitted and the following substantial questions of law were framed :
(i) Whether on facts and in the circumstances of the case and in law, the Hon’ble ITAT was justified in allowing the travel expenses of Rs.6.15 crores holding that there is a binding contract under which assessee has undertaken to bear the liability though the actual liability did not accrue during the year?
(ii) Whether on the facts and circumstances of the case and in law, the Hon’ble ITAT was justified in allowing the deduction u/s. 80IA when the assessee had declared loss under the head profits and gain of business and assessee did not involving business of manufacturing but basically purchased raw seeds and sold the same after cleaning and testing and when the assessee operations were integrated and profits of unit can not be drawn artificially?
(iii) Whether on the facts and circumstances of the case and in law, the Hon’ble ITAT was justified in allowing the deduction of interest when assessee failed the tests of interlacing and enter dependences unity of control and management – conditions necessary for deduction u/s. 36(1)(iii)?
2. The subject matter relates to Assessment Year 1996-1997. As regards question no.1, the Assessing Officer had disallowed a sum of Rs. 6,15,40,000/- debited to advertisement and sales promotion being the amount of expenditure incurred towards foreign travel scheme for respondent’s dealers and distributors. Respondent had a wide dealer network throughout the country. On 10th January 1996, respondent had devised a scheme (hereinafter referred to as FTS), whereby the distributors/ dealers would be eligible to travel to foreign country at the expense of respondent. This was announced as a sort of incentive to the dealers/distributors who had achieved a particular turnover in the last three years. On the basis of these details, a provision was made in the books of account in the sum of Rs.6,15,40,000/- and the same was claimed as a liability deductible in the computation of business income. The Assessing Officer and the CIT (A) held that the liability has not crystallized and was only contingent and hence, not deductible. It was against that decision that respondent had preferred an appeal before the ITAT. ITAT reversed the finding of CIT (A) holding that respondent was eligible to claim deduction under Section 80IA and as it was an accrued liability was entitled to allowable deduction under Section 80IA.
3. It has not been disputed before us that respondent had announced such an incentive scheme for its dealers/distributors. Mr. Suresh Kumar submitted that because the amount had not been spent, it was only a contingent liability.
4. Mr. Rai submitted that respondent was following mercantile system of accounting and it is well settled principle of accountancy that where the mercantile system is followed, an expense would be deductible in the year in which it is incurred though not paid. Mr. Rai further submitted that the date of payment is immaterial and whether the payment is made in advance or the payment is kept in abeyance, the amount can be claimed as deduction in computing the taxable profits only in the accounting year in which the liability to pay first arises. In the case of appellant, the scheme was announced in the financial year 1995-1996 relevant to the assessment year 1996-1997 and the liability first arose to appellant at that point of time. Mr. Rai submitted that the said expenditure under no circumstances can be considered as a contingent expenditure because respondent was bound by its announcement which is in the nature of a contract. Thus, an obligation, which, in the perception or the bonafide estimate of the organisation has already been incurred or accepted cannot be regarded as a contingency from the stand point of the organisation. Mr. Rai submitted that the amount has been spent in the subsequent years and the same has not been claimed again as an expenditure. Mr. Rai further submitted that 1268 persons had travelled upto 31st March 1999 and the total amount spent upto 31st March 1999 was Rs.5,51,64,807/-. Mr. Rai relied upon a judgment of the Apex Court in Calcutta Co. Ltd. V/s. Commissioner of Income Tax, West Bengal 1
5. In Calcutta Co. Ltd. (Supra), the Apex Court confirmed the fact that mercantile system of accounting is well known and quoted from another judgment of the Apex Court in Keshav Mills Ltd. V/s. Commissioner of Income Tax2 as to what was this method of mercantile system of accounting. It has been held that, “mercantile system of accounting is that system which brings into credit what is due, immediately it becomes legally due and before it is actually received and it brings into debit expenditure the amount for which a legal liability has been incurred before it is actually disbursed”. Even in Calcutta Co. Ltd. (Supra) the main ground of disallowance by the Revenue was that the expenditure was not actually incurred in the year of account, it was by no means certain what the actual cost would be and that there was as yet no accrued liability but only a contingent liability undertaken by the assessee. Rejecting the stand of the Revenue, the Apex Court held as under :
There is no doubt that the undertaking to carry out the developments within six months from the dates of the deeds of sale was incorporated therein and that undertaking was unconditional, the appellant binding itself absolutely to carry out the same. It was not dependent on any condition being fulfilled or the happening of any event, the only condition being that it was to be carried out within six months which in view of the fact that the time was not of the essence of the contract meant a reasonable time. Whatever may be considered a reasonable time under the circumstances of the case, the setting up of that time limit did not prescribe any condition for the carrying out of that undertaking and the undertaking was absolute in terms. If that undertaking imported any liability on the appellant the liability had already accrued on the dates of the deeds of sale, though that liability was to be discharged at a future date. It was thus an accrued liability and the estimated expenditure which would be incurred in discharging the same could very well be deducted from the profits and gains of the business.
Inasmuch as the liability which had thus accrued during the accounting year was to be discharged at a future date the amount to be expended in the discharge of that liability would have to be estimated in order that under the mercantile system of accounting the amount could be debited before it was actually disbursed.
The difficulty in the estimation thereof again would not convert an accrued liability into a conditional one, because it is always open to the Income-tax authorities concerned to arrive at a proper estimate thereof having regard to all the circumstances of the case.
Turning now to the facts of the present case, we find that the sum of Rs. 24,809 represented the estimated expenditure which had to be incurred by the appellant in discharging a liability which it had already undertaken under the terms of the deeds of sale of the lands in question and was an accrued liability which according to the mercantile system of accounting the appellant was entitled to debit in its books of account for the accounting year as against the receipts of Rs. 43,692-11-9 which represented the sale proceeds of the said lands. Even under s.10(2) of the Income-tax Act, it might. possibly be urged that the word ” expended was capable of being interpreted as ” expendable “or to be expended ” at least in a case where a liability to incur the said expenses had been actually incurred by the assessee who adopted the mercantile system of accounting and the debit of Rs. 24,809 was thus a proper debit in the present case.
6. Therefore, the sum of Rs.6,15,40,000/-, which represented the advertisement and sales promotion expenditure, which had to be incurred by respondent under the scheme announced by respondent to incentivise its dealers and distributors, to discharge a liability which it had already undertaken and in our view was an accrued liability which, according to mercantile system of accounting, respondent was entitled to debit in its books of account for the Assessment Year 1996-1997. We, therefore, find that the view expressed by the ITAT that the moment the scheme was announced there arose a liability on the part of respondent to meet the expenses on the foreign tour of those dealers/distributors who were eligible, having satisfied the condition vis-a-vis achievement of sales targets during the last three years cannot be faulted. The ITAT on facts has also come to a conclusion, and we agree with that conclusion, that there being a binding contract under which respondent has undertaken to bear the liability in respect of the foreign travel expenses of the distributors/dealers under the FTS, the liability is not a contingent liability, but an ascertained or definite one or a liability in praesenti, solvendum in futuro.
In the circumstances, the first question is answered in affirmative.
7. As regards the second question, it could be split into two parts – (a) whether respondent was an industrial undertaking to which Section 80IA applies? and (b) whether the total income, as computed, should include profits and gains derived to the business or industry mentioned in the Section?
8. According to respondent, it was an industrial undertaking that began to manufacture during the period beginning on the 1st day of April 1991 and ending on the 31st day of March 1995 and hence, under Clause IV (a) of sub Section 2 of Section 80IA, it was entitled to deduction in respect of profits and gains as prescribed under sub Section 5 of Section 80IA which is 20% of the profits and gains derived from such industrial undertaking.
9. The first step to be entitled to claim a deduction is for respondent to prove that it was an industrial undertaking that manufactured a product.
According to respondent, the activity that it carried on, amounts to manufacture or production of articles or things covered under Section 80IA. Respondent used to procure unprocessed or raw seeds and the final product which comes out is different commodity. According to respondent, the different stages of processing followed is that at the first stage it involves cleaning of raw or unprocessed seeds with the help of a machine called seed pre-cleaner. Thereafter, hybrid cotton seeds are passed through tanks containing concentrated sulfuric acid which dissolves the fuzz, lint and washes off the seed coat. The seeds are neutralized thereafter through lime solution. The second stage involves conveying the seeds through an elevator into the destoner machine to separate unwanted articles such as stones. The third stage involves passing the seeds through fine screens which further removes the fine unwanted particles and also separates the seeds size-wise. At the fourth stage, the seeds are passed through gravity separator to separate them according to weight. The fifth stage involves testing for quality. There are three types of testing : physiological testing, physical testing and genetic testing. These tests indicate the health of the seed. The impact of fungus, spores, virus etc. is checked. Further tests include physical purity test, moisture content test, seed germination test etc. At the sixth stage, the seeds are further treated with fungicides such as Thiram, Monosan, Bavistin etc. In this process, the seeds and the chemicals have to be mixed homogeneously. The seventh and last stage involves packing the seeds after weighment. It will thus be seen that the seeds are to be chemically treated to make them insect-free and tolerant to the climatic variations so that they will achieve better growth.
Relying upon the judgment of the Apex Court in Commissioner of Income Tax V/s. Jalna Seeds Processing and Refrigeration Co. Ltd.3, the ITAT came to a conclusion that a commercially different commodity is obtained after the raw seeds are processed, which was quite different from the raw seeds. Mr. Suresh Kumar submitted that if one examines the various stages through which the raw seeds go and the final product, it is clear that there is no manufacturing process involved in as much as the seeds, even after undergoing the process, remain seeds.
10. In the case at hand also a similar process, which is mentioned in Jalna Seeds Processing and Refrigeration Co. Ltd. (Supra), has been followed. Mr. Rai submitted that the processed seed is altogether a different product than the unprocessed seed and has commercial acceptance and is recognised by farmers as a seed. Seeds marketed as seeds and those marketed as food grains are two different and distinct products. The former cannot be used as food grain, whereas the later can be used as seed. Mr. Rai submitted that commercial seed processing is not as simple as presumed by the Revenue and requires sophisticated plant and machineries, packing machines, cold storage facilities etc. Those processed seeds are the result of a manufacture or production process, which is different from the unprocessed or raw seeds. We concur with the submissions of Mr. Rai. In the present case, on the facts, the various stages indicate that the raw seeds which could be the subject matter of human consumption, after undergoing the various process stages, ceased to be edible and the said seeds could only be used for cultivation. Even applying the commercial test, the ITAT, on the facts, found that even in the market, the said final output was known to be used only for cultivation. In the circumstances, in the present case, on the facts the ITAT was right in coming to the conclusion that a different commodity emerged after the raw seeds underwent the above different stages. We concur with the opinion of ITAT that there is no merit in the stand taken by the Revenue that the activity carried by respondent in its industrial undertakings does not amount to manufacture or production of articles or things.
11. As regards the second part of the second question, as to whether the ITAT was justified in allowing the deduction under Section 80IA when the assessee had declared loss under the head profits and gain of business, Mr. Rai submitted that the Assessing Officer committed a gross error of law and fact while denying deduction amounting to Rs.2,48,58,215/- under Section 80IA of the Act claimed by respondent in respect of respondent’s two eligible units located at Kallakal and Kamdod.
12. The facts essential to understand this issue is respondent had claimed deduction under Section 80IA out of the gross total income of Rs.4,18,95,352/- which comprised of (-) Rs.10,22,475/- under the head “business”, Rs.4,29,17,827/- as income from other sources and Rs.33,56,738/- as capital gains. Respondent was in the business of manufacturing and marketing of seeds and had nine units. In the course of scrutiny, the Assessing Officer found that respondent had claimed deduction of Rs.2,48,58,215/- under Section 80IA of the Act in respect of the two eligible units only, i.e., Kallakal unit and Kamdod unit by way of apportioning the profit and the expenditure in respect of both these units. The Assessing Officer was of the opinion that in the absence of any profit derived from the business of the industrial undertaking, respondent was not eligible for deduction under Section 80IA of the Act. The Assessing Officer opined that nowhere it has been mentioned in Section 80IA that if there is a loss, even then the assessee is eligible for deduction to the extent of the gross total income. According to the Assessing Officer, Section 80A(2) only mentions about the aggregate amount of deductions and if the assessee is not eligible for deduction, there is no question of carrying the logic of allowing deduction to the extent of gross total income. The Assessing Officer concluded that respondent was not at all eligible for deduction and once it is not eligible for deduction it was not proper for respondent to claim any deduction. In short, the Assessing Officer rejected the claim on the following grounds :
(i) The assessee has claimed a loss of Rs.10,22,475/- under the head “Business”;
(ii) There is no profit from the industrial undertakings;
(iii) There is no “manufacture” of any commodity in the industrial undertakings;
(iv) In any event, if the scientific research expenses are allocated to the two industrial undertakings, as they should be, there is no profit from which any deduction could be CIT (A) upheld this view of the Assessing Officer and Mr. Suresh Kumar also made his submissions on the same lines.
13. Mr. Rai submitted that the object underlying the enactment of Section 80IA and the terms in which it provides relief was to encourage the setting up of industries as provided in Section 80IA. Mr. Rai submitted that for claiming a deduction, it must be (a) a company to which Section 80IA applies, (b) the total income, as computed, should include profits and gains derived to the business or the industry mentioned in the Section and (c) from the profits and gains derived to such business or industry a deduction has to be allowed of an amount equal to 30% of such profits and gains and effect must be given to this deduction when computing the total income of the company. Mr. Rai submitted that if the Court accepts this submission of respondent, then it would amount to shifting the focus from the industry to the assessee. Mr. Rai relied upon the judgment of the Apex Court in Commissioner of Income Tax (Central), Madras V/s. Canara Workshops (P) Ltd.4 and Commissioner Of Income Tax-I V/s. M/s. Reliance Energy Ltd.5.
14. Section 80IA (as it was in force at the relevant time) which deals with deduction in respect of profits and gains from industrial undertakings, etc. in certain cases, reads as under :
80IA : (1) Where the gross total income of an assessee includes any profits and gains derived from any business of an industrial undertaking or a hotel or [operation of a ship (such business being hereinafter referred to as the eligible business)], to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to the percentage specified in sub-section (5) and for such number of assessment years as is specified in sub-section (6).
(2) xxxxxxxxxxx
(iv) (a) in the case of an industrial undertaking not specified in sub-clause 9b) [or sub-clause (c)], it begins to manufacture or produce articles or things or to operate such plant or plants, at any time during the period beginning on the 1st day of April, 1991 and ending on the 31st day of March, 1995, or such further period as the Central Government may, be notification in the Official Gazette, specify with reference to any particular industrial undertaking.
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(5) The amount referred to in sub-section (1) shall be –
(i) (a) in the case of an industrial undertaking referred to in sub-clause (a) [or sub-clause (d)] of clause (iv) of sub-section 92), twenty-five per cent of the profits and gains derived from such industrial undertakings;
(b) in the case of any industrial undertaking referred to in sub-clause (b) [or sub-clause (c)] of clause (iv) of sub-section (2), hundred per cent of the profits and gains derived from such industrial undertaking for the initial five assessment years and thereafter twenty-five per cent of the profits and gains derived from such industrial undertaking;
Provided that where the assessee is a company, the provisions of this clause shall have effect as if for the words “twenty-five per cent”, the words “thirty per cent” had been substituted.
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(7) Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under sub-section (5) for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made.
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Therefore, where the gross total income of an assessee includes any profits and gains derived from any business of an industrial undertaking, there shall be allowed, in computing the total income of the assessee, a deduction from “such profits and gains” of an amount equal to the percentage specified in sub-section (5) and for such number of assessment years specified in sub-section (6). Therefore, it provides for a deduction from “such profits and gains” from any business of an industrial undertaking where the gross total income of an assessee includes any profits and gains derived from any business of an industrial undertaking. It is quite clear that each industry must be or each unit must be considered on its own working only when adjudging its entitlement to the deduction under Section 80IA. It cannot be allowed to suffer because it keeps company with some other industry or unit in the hands of the assessee. In the application of Section 80IA, the profits and gains earned by an industry mentioned in that Section cannot be reduced by the loss suffered by any other industry or industries owned by the assessee. This view is confirmed by clause (i) (a) of sub Section 5 of Section 80IA where it says “the amount referred to in sub-section (1) shall be in the case of an industrial undertaking referred to…………………………………………. 30% of the profits and gains derived from such industrial undertakings”. Sub Section 7 of Section 80IA, a non-obstante provision, makes it more explicit because it says
“Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply shall, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made” (emphasis supplied). The Apex Court in Canara Workshops (P) Ltd. (Supra) has held as under :
It is obvious from the object underlying the enactment of s. 80E and the terms in which it provides relief that the intention of Parliament in enacting the provision was to encourage the setting up of industries concerned with the generation or distribution of electrical and other energy and the construction, manufacture or production of articles or things specified in the list in the Fifth Schedule. The intention goes further. By making a provision for a rebate year after year on the industry making profits and gains during the year, the intention also was to provide an incentive for promoting efficiency in the industry. It is clear that the benefit was directed to the setting up and also the efficient working of the priority industries. How is the benefit to be worked out? First, it must be a company to which s. 80E applies, that is to say a company which satisfies the requirements of sub-s. (2) of s. 80E. Second, the total income, as computed in accordance with the Income- tax Act 1961 without taking into regard the provisions of s. 80E, should include profits and gains attributable to the business or the industry mentioned in the section. Third, from the profits and gains attributable to such business or industry a deduction has to be allowed of an amount equal to eight per cent of such profits and gains and effect must be given to this deduction when computing the total income of the company.
The assessee in this case carries on two industries, both of which find place in the list in the Fifth Schedule and can, therefore, be described as priority industries. It is urged by the learned Additional Soliciter General, appearing for the Revenue, that on a true application of s. 80E the profit in the industry of automobile ancillaries must be reduced by the loss suffered in the manufacture of alloy steel, and reference has been made to a number of cases to which we shall presently refer. After giving the matter careful consideration we do not find it possible to accept the contention. It seems to us that the object in enacting s. 80E is properly served only by confining the application of the provisions of that section to the profits and gains of a single industry. The deduction of eight per cent is intended to be an index of recognition, that a priority industry has been set up and is functioning efficiently. It was never intended that the merit earned by such industry should be lost or’ diminished because of a loss suffered by some other industry. It makes no difference that the other industry is also a priority industry. The coexistence of two industries in common ownership was not intended by Parliament to result in the misfortune of one being visited on the other. The legislative intention was to give to the meritorious its full reward. To construe s. 80E to mean that you must determine the net result of all the priority industries and then apply the benefit of the deduction to the figure so obtained will be, in our opinion, to undermine the object of the section. An example will illustrate this. An industry entitled to the benefit of s. 80E could have its profits wholly wiped out on adjustment against a heavy loss suffered by another industry, and thus be totally denied the relief which should have been its due by virtue of its profits. In our opinion, each industry must be considered on its own working only when adjudging its title to the deduction under
s. 80E. It cannot be allowed to suffer because it keeps company with some other industry in the hands of the assessee. To determine the benefit under s. 80E on the basis of the net result of all the industries owned by the assessee would be, moreover, to shift the focus from the industry to the assessee. We hold that in the application of s. 80E the profits and gains earned by an industry mentioned in that section cannot be reduced by the loss suffered by any other industry or industries owned by the assessee.
15. In the circumstances, we hold that the scope of deduction under Section 80IA of the Act is limited to determination of quantum of deduction by treating eligible business as the only source of income. Therefore, the deduction cannot be denied because the deduction under Section 80IA has to be computed unit wise and not for the business as a whole.
16. Coming to the third question, Mr. Suresh Kumar submitted that the Revenue’s stand was that deduction for interest under Section 36(1) (iii) of the Act was allowable only if the assets acquired out of the borrowed capital has been put to use. Mr. Suresh Kumar in fairness submitted that the judgment of the Apex Court in Deputy Commissioner of Income Tax V/s. Core Health Care Ltd.6 squarely covers this question and the Apex Court has held that such interest is allowable under Section 36(1)(iii). The Apex Court has held that interest on moneys borrowed for the purposes of business is a necessary item of expenditure in a business. For allowance of a claim for deduction of interest under the said section, all that is necessary is that firstly, the money, i.e., capital, must have been borrowed by the assessee; secondly, it must have been borrowed for the purpose of business; and, thirdly, the assessee must have paid interest on the borrowed amount. The Apex Court has also held that all that is germane is : whether the borrowing was, or was not, for the purpose of business. Paragraphs 8 and 9 of the said judgment read as under :
8. Interest on moneys borrowed for the purposes of business is a necessary item of expenditure in a business. For allowance of a claim for deduction of interest under the said section, all that is necessary is that firstly, the money, i.e. capital, must have been borrowed by the assessee; secondly, it must have been borrowed for the purpose of business; and, thirdly, the assessee must have paid interest on the borrowed amount [See: Calico Dyeing & Printing Works v. Commr. Of Income-tax, Bombay City-II (1958) 34 ITR 265]. All that is germane is : whether the borrowing was, or was not, for the purpose of business. The expression “for the purpose of business” occurring in Section 36(1)(iii) indicates that once the test of “for the purpose of business” is satisfied in respect of the capital borrowed, the assessee would be entitled to deduction under Section 36(1)(iii) of the 1961 Act. This provision makes no distinction between money borrowed to acquire a capital asset or a revenue asset. All that the section requires is that the assessee must borrow capital and the purpose of the borrowing must be for business which is carried on by the assessee in the year of account. What subsection (iii) emphasizes is the user of the capital and not the user of the asset which comes into existence as a result of the borrowed capital unlike Section 37 which expressly excludes an expense of a capital nature. The legislature has, therefore, made no distinction in Section 36(1)(iii) between “capital borrowed for a revenue purpose” and “capital borrowed for a capital purpose”. An assessee is entitled to claim interest paid on borrowed capital provided that capital is used for business purpose irrespective of what may be the result of using the capital which the assessee has borrowed. Further, the words “actual cost” do not find place in Section 36(1)(iii) of the 1961 Act which otherwise find place in Sections 32, 32A etc of the 1961 Act. The expression “actual cost” is defined in Section 43(1) of the 1961 Act which is essentially a definition section which is subject to the context to the contrary.
9. In the case of Commissioner of Income-tax v. Associated Fibre and Rubber Industries (P) Ltd. (1999) 236 ITR 471, the Division Bench of this Court held as follows:
“Even though the machinery has not been actually used in the business at the time when the assessment was made, the same has to be treated as a business asset as it was purchased only for business purposes. In the circumstances, the interest paid on the amount borrowed for purpose of such machinery is certainly a deductible amount.”
17. In our view, the Tribunal has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are properly analysed and correct test is applied to decide the issue at hand, then, we do not think that question as pressed raises any substantial question of law.
18. The appeal is devoid of merits and it is dismissed with no order as to costs.
Note:
1. 37 ITR 1 (SC)
2. (1953) 23 I.T.R. 230, 239
3. 246 ITR 156 (Bom.)
4. 161 ITR 320 (SC)
5. 302 ITR 473 (SC)
6. (2008) 167 Taxmann 206 (SC)
