In High Court of Judicature at Madras Dated: 09.12.2014 Coram Honourable Mr. JUSTICE R.SUDHAKAR and Honourable Mr.JUSTICE R.KARUPPIAH Tax Case (Appeal) No.273 of 2014 Commissioner of Income Tax Chennai. .... Appellant Vs. M/s.Apex Agencies, Pottipati Plaza, II Floor, No.77, Nungambakkam High Road, Chennai - 600 034. Respondent APPEAL under Section 260A of Income Tax Act against order dated 20.7.2011 made in I.T.A.No.372/Mds/2010 on file of Income Tax Appellate Tribunal, Chennai 'B' Bench. For Appellant : Mr.J.Narayanasamy Standing Counsel for Income Tax For Respondent: Mr.N.V.Balaji 2 JUDGMENT (Delivered by R.SUDHAKAR,J.) This Tax Case (Appeal) is filed by Revenue as against order of Income Tax Appellate Tribunal raising following substantial question of law: Whether on facts and in circumstances of case, Appellate Tribunal was right in merely remitting issue of disallowance of interest and finance charges, back to assessing officer for fresh consideration without considering issue on merits while disposing appeal?" 2. assessment in this case relates to assessment year 2005- 06. appellant is trader in batteries, torch lights and bulbs etc. For assessment year in question, assessee filed returns admitting income of Rs.19,27,960/-. While completing scrutiny assessment, Assessing Officer made addition of Rs.12,86,106/- disallowing interest expenditure as not relating to assessee's business. Aggrieved by said order of Assessing Officer, assessee preferred appeal before Commissioner of Income Tax (Appeals), who after following assessee's own case in respect of previous assessment years, confirmed order of assessment. Aggrieved by said order, assessee once again went before Income Tax Appellate Tribunal. 3 3. Tribunal relying upon its decision in respect of very same assessee for previous assessment years, allowed appeal filed by assessee. For better clarity, relevant portion of order of Tribunal reads as follows: "6. We have perused orders and heard rival contentions. There is no dispute that disallowance of interest on finance charges was confirmed by ld. CIT(Appeals) relying on his predecessor's order in assessee's own case for assessment years 2000-01, 2001-02 and 2003-04. Vide order dated 24th September, 2011 in Miscellaneous Petition Nos.89, 159 & 160/Mds/2010 filed by Revenue, this Tribunal had refused to interfere with its earlier orders quashing assessments done for assessment years 2000-01, 2001-02 and 2003-04. In fact, in order on Miscellaneous Petition mentioned supra, Tribunal has reproduced its earlier order quashing assessments for those years. Learned D.R. agreed that A.O. had relied on his orders of earlier years mentioned above for making disallowance for impugned assessment year also. Therefore, in our opinion, matter requires re-visit by A.O., since earlier orders which were relied on having been quashed. Therefore, we set aside orders of authorities below and remit issue regarding disallowance made on interest debited by assessee in its Profit and Loss account, back to Assessing Officer for fresh consideration in accordance with law. Needless to say, assessee has to be given proper opportunity for explaining its case." 4 4. Aggrieved by this order of Tribunal, Revenue is before this Court. 5. Learned Standing Counsel appearing for Revenue submits that Tribunal following its earlier order in respect of very same assessee for previous assessment years allowed appeal filed by assessee. In that earlier order, Tribunal has not considered issue on merits, but on ground of limitation, Tribunal dismissed appeal filed by Revenue. Hence, order of Tribunal is not sustainable as one covering issue in this appeal. 6. Heard Mr.J.Narayanasamy, learned standing counsel appearing for Revenue and Mr.N.V.Balaji, learned counsel appearing for assessee and perused materials placed before this Court. 7. main issue in this case is whether interest and finance charges are allowable deduction. This issue was already subject matter of appeal before Tribunal. Tribunal in respect of assessment years 2000-01, 2001-02 and 2003-04 dismissed appeals filed by Revenue on ground of limitation and not on merits. In such view of matter, Tribunal has misdirected itself to hold that assessments in respect of previous years were quashed and answered issue in favour of assessee. We therefore, set aside order of Tribunal 5 and remand matter back to Tribunal for deciding matter afresh on merits. In result, this Tax Case (Appeal) is allowed by way of remand. No costs. Index :Yes/No (R.S.,J) (R.K.,J) Internet:Yes/No 09.12.2014 sl To 1. Income Tax Appellate Tribunal, Chennai 'B' Bench. 2. Commissioner of Income Tax (Appeals), XII, Chennai. 3. Assistant Commissioner of Income Tax, Circle XV, Chennai. 6 R.SUDHAKAR,J. AND R.KARUPPIAH,J. Sl Tax Case (Appeal) No.273 of 2014 09.12.2014 Commissioner of Income-tax, Chennai v. M/s. Apex Agencie