Cit vs Expo Dealers Finance Ltd.
2006 Latest Caselaw 1256 Del

ORDER

1. The revenue is aggrieved by an order dated 8-4-2005 passed by the Income Tax Appellate Tribunal, Delhi Bench 'F' in ITA No. 2863 (Delhi)/2001 relevant for the assessment year 1994-95.

2. It appears that the assessed filed its return for income for the assessment year 1994-95 claiming a deduction on account of interest payable to M/s. Sterling Foils Ltd. The interest was for the period of November, 1992 to 31-3-1994. The deduction was allowed for the period 1-4-1993 to 31-3-1994. Thereafter, the assessed filed an application under Section 154 of the Income Tax Act claiming deduction for the period from November, 1992 to 31-3-1993 for the assessment year 1993-94. This application was allowed by the assessing officer but the Commissioner of Income-tax in exercise of his powers under Section 263 of the Income Tax Act cancelled the order passed by the assessing officer. Against this order, the assessed filed an appeal which was registered before the Tribunal as ITA No. 2698 (Delhi)/98.

3. In respect of the year 1994-95, since the assessed has claimed the entire interest as deduction from November 1992 to 31-3-1994 and this was not allowed by the assessing officer, the assessed preferred an appeal before the Commissioner (Appeals). When this appeal came up before the Commissioner (Appeals), the assessed pointed out the fact that it had been given the benefit of the deduction for the period from November, 1992 to 31-3-1993 in the assessment year 1993-94 and for the period of 1-4-1993 to 31-3-1994 in the assessment year 1994-95. Thereupon, the Commissioner (Appeals) taking all these facts into consideration accepted the claim of the assessed for deduction from November, 1992 to 31-3-1994 in respect of the computation of total income for the assessment year 1994-95.

4. Feeling aggrieved by this order of the Commissioner (Appeals), the revenue filed an appeal to the Tribunal and that appeal was registered as ITA No. 2863 (Delhi)/01, which is the subject-matter before us.

5. The result of the revenue filing an appeal before the Tribunal was that insofar as interest for the period from November, 1992 to 31-3-1993 was concerned, the assessed was not entitled to deduction either in the assessment year 1993-94 or in the year 1994-95.

6. The Tribunal noted that the stand taken by the department was not only inconsistent but contradictory as well and came to the conclusion that the assessed would be entitled to a deduction for the entire amount in the assessment year 1994-95.

7. On the facts of the case, we are of the view that the assessed would be entitled to a deduction on the interest paid to M/s. Sterling Foils Ltd. The only question is in what assessment year. The Tribunal has taken a view that the assessed was entitled to a deduction in the assessment year 1994-95 and learned counsel for the assessed says that the year hardly matters because in both years the assessed suffered a loss.

8. We are of the view that there is no infirmity in the order was passed by the Tribunal and no substantial question of law arises for our consideration.

Dismissed.