C.I.T. - Central Kolkata - I v. Shaw Wallace & Co. Ltd
[Citation -2015-LL-0205-23]

Citation 2015-LL-0205-23
Appellant Name C.I.T. - Central Kolkata - I
Respondent Name Shaw Wallace & Co. Ltd.
Relevant Act Income-tax
Date of Order 05/02/2015
Judgment View Judgment
Keyword Tags disallowance of interest • repairs and maintenance • service charge • guest house

IN HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax) Original Side Present : Hon ble Justice Girish Chandra Gupta And Hon ble Justice Arindam Sinha 05.02.2015 ITA 129 of 2003 Commissioner of Income Tax-Central Kolkata-I Vs. Shaw Wallace & Co. Ltd. Md.Nizamuddin, Advocate for appellant Mrs. Anupa Banerjee, Advocate for respondent Court :- questions of law proposed by appellant are as follows :- a) Whether on facts and in circumstances of instant case Learned Tribunal was justified in law in allowing amortisation at rate of 1/7th of Service Charges of Rs. 1,60,00,000/- paid to Peerless General Finance and Investment Co. Ltd. on loan of Rs. 11.5 crores taken by assessee, particularly when it is undisputed fact that excess service charge was charged for non- recovery of loan advanced earlier to third party at request of assessee and that no service was, in fact, rendered by M/s. Peerless General Finance & Investment Co. Ltd. ? 2 b) Whether on facts and in circumstances of instant case Learned Tribunal was justified in allowing expenses on repairs and maintenance and allowing depreciation on Guest House amounting to Rs. 2 lacs, particularly in view of specific ban under sub-section (4) of Section 37 of Income Tax Act, 1961 ? c) Whether on facts and in circumstances of instant case, Learned Tribunal was justified in upholding order of Learned Commissioner of Income Tax (Appeals) who deleted disallowance of interest of Rs. 2,91,53,684/- on interest free advances given to subsidiary companies out of interest bearing Inter Corporate Deposit Borrowals, without verifying whether such claim of assessee was genuine or true or whether advancing loan to subsidiary was part of assessee s business ? There is consensus at Bar that question no. (b) is already covered by judgment of Supreme Court in case of Britannia Industries Ltd. vs. C.I.T, W.B., Kolkata reported in (2005) 148 Taxman 468 (SC). Therefore, question no. (b) is answered in negative. With regard to question no.(c ) Mr. Nizamuddin appearing for appellant has not disputed that money lent by assessee to its subsidiary was not interest free loan. Therefore, question does not really call for any answer and is accordingly disposed of. 3 In so far as question no. (a) is concerned it appears that learned Tribunal did not apply its mind to question and merely followed views of CIT (Appeals) without disclosing reasons therefor. In that view of matter appeal is remanded to Tribunal limited to question no. (a). appeal is thus disposed of. (Girish Chandra Gupta, J.) (Arindam Sinha, J.) ANC. C.I.T. - Central Kolkata - I v. Shaw Wallace & Co. Ltd
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