1 IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.10 OF 2019 (@SLP(C) No.37/2019 @Diary No.32695/2018) COMMISSIONER OF INCOME TAX (LARGE TAX PAYER UNIT) APPELLANT(s) VERSUS M/S RELIANCE INDUSTRIES LTD RESPONDENT(s) WITH CIVIL APPEAL NO.11 OF 2019 (@SLP(C) No.35/2019 @Diary No.29863/2018) CIVIL APPEAL NO.12 OF 2019 (@SLP(C) No.38/2019 @Diary No.30030/2018) CIVIL APPEAL NO.13 OF 2019 (@SLP(C) No.39/2019 @ Diary No.36149/2018) ORDER Delay condoned. Exemption from filing certified copy of impugned judgment granted. Leave granted. These appeals have arisen from judgment of Bombay High Court dated 22 & 23 August,2017 for Assessment Years 2003-04, 2004-05, 2005-06 and 2006-07. High Court has passed common order for all Assessment Years. Learned counsel for assessee states that all questions which have been framed do Signature Not Verified not necessarily arise for each Assessment Year. chart Digitally signed by DEEPAK GUGLANI Date: 2019.01.08 14:02:07 IST Reason: has been tendered, explaining position. chart is taken on record. 2 appeals by Revenue raise following questions: 1. Whether High Court is correct in holding that interest amount being interest referable to funds given to subsidiaries is allowable as deduction under Section 36(1)(iii) of Income Tax Act, 1961 (for short Act ) when interest would not have been payable to banks, if funds were not provided to subsidiaries; 2. Whether on facts and in circumstances of case and in law, High Court is correct in upholding Tribunal s view that prior to insertion of Explanation-5 to Section 32 of Act, claim of depreciation was optional and could not be thrust on assessee, if it had not claimed it; 3. Whether on facts and in circumstances of case and in law, High Court is correct in upholding Tribunal s view that pre-operative expenses incurred in connection with creation of plant & machinery in units which have not commenced production, are revenue in nature; 4. Whether on facts and in circumstances of case and in law, High Court is correct in upholding Tribunal s view that expenditure on estimated basis cannot be reduced from dividends for deduction under Section 80M of Act; and 3 5. Whether on facts and in circumstances of case and in law, High Court is correct in upholding Tribunal s view in sustaining deletion of Transfer Pricing adjustment made to consultancy charges, especially when TPO had adopted same mark up in relation to its European associate, what assessee itself had adopted in relation to its USA associate. Insofar as first question is concerned, issue raises pure question of fact. High Court has noted finding of Tribunal that interest free funds available to assessee were sufficient to meet its investment. Hence, it could be presumed that investments were made from interest free funds available with assessee. Tribunal has also followed its own order for Assessment Year 2002-03. In view of above findings, we find no reason to interfere with judgment of High Court in regard to first question. Accordingly, appeals are dismissed in regard to first question. Insofar as second question is concnered, issue, it is common ground, is governed by decision of this Court in Plastiblends India Limited Vs. Additional Commissioner of Income Tax, Mumbai and Another1. 1 (2017) 9 SCC 685 4 High Court has not had benefit of decision of this Court. Hence, we are of view that it would be appropriate to remand issue for fresh decision by High Court bearing in mind law laid down in above case. We keep open all rights and contentions of Revenue and assessee in regard to applicability of provision for relevant Assessment Years. As regards, third question pertaining to pre- operative expenses; fourth question pertaining to deduction under Section 80M of Act; and fifth question pertaining to transfer pricing, High Court has failed to independently evaluate merits of departmental appeals. Hence, we consider it appropriate that aforesaid questions are considered afresh by High Court. In order to facilitate fresh exercise being conducted in relation to aforesaid four questions (Question Nos.2,3,4 and 5), we allow appeals and set aside impugned judgment of High Court. appeals stand restored to file of High Court for that purpose. 5 This Court has been apprised of fact that appeals are pending before High Court against two other questions. Hence, it would be open to parties to apply to High Court for consolidated hearing. These appeals are accordingly disposed of. There shall be no order as to costs. .............................J. (DR. DHANANJAYA Y. CHANDRACHUD) .............................J. (HEMANT GUPTA) NEW DELHI JANUARY 02, 2019 6 ITEM NO.9 COURT NO.11 SECTION IX S U P R E M E C O U R T O F I N D I RECORD OF PROCEEDINGS CIVIL APPEAL NO.10 OF 2019 (@SLP(C) No.37/2019 @Diary No.32695/2018) COMMISSIONER OF INCOME TAX (LARGE TAX PAYER UNIT) APPELLANT(s) VERSUS M/S RELIANCE INDUSTRIES LTD RESPONDENT(s) WITH CIVIL APPEAL NO.11 OF 2019 (@SLP(C) No.35/2019 @Diary No.29863/2018) CIVIL APPEAL NO.12 OF 2019 (@SLP(C) No.38/2019 @Diary No.30030/2018) CIVIL APPEAL NO.13 OF 2019 (@SLP(C) No.39/2019 @ Diary No.36149/2018) Date : 02-01-2019 These appeals were called on for hearing today. CORAM : HON'BLE DR. JUSTICE D.Y. CHANDRACHUD HON'BLE MR. JUSTICE HEMANT GUPTA For Petitioner(s) Mr. Rupesh Kumar, Adv. Mr. D.L. Chidanand, Adv. Mr. Shreyash Bhardwaj, Adv. Mrs. Anil Katiyar, AOR For Respondent(s) Mr. R. Venkatraman, Sr. Adv. Mr. K. R. Sasiprabhu, AOR Mr. Amit K. Mathur, Adv. Mr. Somiran Sharma, Adv. UPON hearing counsel Court made following O R D E R Delay condoned. Exemption from filing certified copy of impugned judgment granted. 7 Leave granted. appeals are disposed of in terms of signed order. Pending application, if any, stands disposed of. (SANJAY KUMAR-I) (SAROJ KUMARI GAUR) AR-CUM-PS COURT MASTER (Signed order is placed on file) Commissioner of Income-tax (Large Tax Payer Unit) v. Reliance Industries Ltd