Delhi High Court
Commissioner Of Income Tax, Large ... vs Indian Railway Finance ... on 23 March, 2015
Author: S.Ravindra Bhat
$~4 to 7
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on 23rd March, 2015
+ ITA 103/2015
+ ITA 105/2015
+ ITA 106/2015
+ ITA 104/2015
COMMISSIONER OF INCOME TAX, LARGE TAX PAYER
UNIT, DELHI
..... Appellant
Through Ms. Suruchi Aggarwal, sr. standing
counsel
versus
INDIAN RAILWAY FINANCE CORPORATION LTD.
..... Respondent
Through Mr. S. Krishnan, Adv.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE R.K.GAUBA
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
CM Nos.2774/2015, 2776/2015 and 2777/2015
Exemption is allowed subject to all just exceptions.
The applications are disposed of.
ITA Nos.103/2015, 105/2015, 106/2015 and 104/2015
1. The revenue is aggrieved by common order of the Income Tax
Appellate Tribunal dated 18.6.2014 in four assessment years i.e. 2006-7,
ITA 103/2015 & conn.
Page 1
2007-08, 2008-09 and 2009-10.
2. Issue sought to be urged is with respect to capital recovery of leased
assets termed as lease equalisation charges. These relate to the rolling stock
of the Indian Railways, which is owned by the assessee and which is on
lease finance basis.
3. The issue in respect of the assessee itself is covered for the previous
assessment year 2001-02, in its favour. The ITAT had followed its previous
order for assessment year 2001-02 in its impugned order. The ITAT's order
for the previous year 2001-02 has been affirmed by a judgment of this Court
in Commissioner of Income, Large Taxpayers Unit V. Indian Railways
Finance Corporation Ltd. 362 ITR 548 (Del.). This position is in fact
conceded by the revenue. Consequently, the appeals do not involve any
substantial question of law. They are dismissed.
4. In ITA 104/2015, an additional issue arises relating to prior interest
expenditure claim on account interest for a prior period. AO had made an
addition of ₹1,10,10,874/-. The assessee had contended that on account of
retrospective revision of rate of interest which occurred in the assessment
year in question i.e. AY 2006-07, it was entitled to claim this as a legitimate
expense. In respect of these, the ITAT's final order noticed its direction for
assessment year 2002-03 which were in the following terms :
"5.3.2. From the facts available on record it is seen that the
similar issue has been decided by the Hon'ble ITAT in ITA no.
1735/del/2006 for assessment year 2002-03 vide their order dated
28-08-2009 wherein the Hon 'ble ITAT has observed as under:
"We have considered the rival submissions. There is no
dispute about the allowability of expenses. Only dispute is
regarding the year of allowability. If the Assessing officer
is of the view that the expenses are pertaining to the prior
ITA 103/2015 & conn.
Page 2
period, the same are required to be considered for the
prior and allowed in that year. If it is found that the
expenses are allowable in this year on the basis of
crystallization of liability, the same may be considered in
the year under appeal. The assessee is therefore, directed
to place necessary evidence in support of claim of
expenses. The Assessing officer on appreciation of
evidence may determine the year of allowability and
allow the same in either of the year."
Following the decision of the Hon'ble ITAT, the Assessing officer
is directed to determine of allowability and allow in the year to
which it pertains."
5. The ITAT in its impugned order reiterated those directions :
"18. We have heard rival contentions and perusal the material
available on record. Respectfully following ITAT's order for
A.Y. 2002-03 herein also we restore the issue back to the file of
assessing officer with same directions."
6. In view of these directions, the Court is of the opinion that no
substantial question of law arises on this aspect for AY 2006-07. All rights
and contentions of the parties are reserved.
7. The appeals of the revenue are consequently dismissed.
S. RAVINDRA BHAT
(JUDGE)
R.K.GAUBA
(JUDGE)
MARCH 23, 2015
vld
ITA 103/2015 & conn.
Page 3
